Budgeting for IT Organizational Change Management.

Think differently about your investment in user performance.

Companies continue to invest in technology. Digital, artificial intelligence, and cyber security are all over the headlines. Cloud and ERP also continue to be big. In fact, the global ERP software market is expected to reach $78 billion by 2026.

Most of these investments come with expectations for a large return on investment. Seasoned IT leaders know that the integration of people, process, and technology is what drives ROI. The business case is rarely realized if human behaviors and processes don’t change.

Despite IT’s decades-long focus on change management, budgeting for the “people side of change” is a mystery to many. And it doesn’t help that project budget numbers must be submitted and approved long before all the implications of the change are clear.

The traditional way is to estimate 15-25% of project spend for the people side of change. A quick google search will show firms like Gartner promoting this ratio. While the old school “percentage of IT investment” is a starting point, it can lead to under-budgeting.

Seasoned IT leaders know that the integration of people, process, and technology is what drives ROI.

Why? First, technology has never been cheaper. Sometimes it’s even free. So you’re using a percentage of a shrinking number. People, however, remain consistently expensive and require things like new organization structures, process changes, work changes, training, and communications. Technology cost is irrelevant to what’s required to equip people to support the organization’s success.

Here’s a better way to estimate: