In previous articles I’ve shared some guidelines on how to execute a Lean Six Sigma pilot project, as well as how to capture direct cost estimates from Kaizen event activities. The topic of my article here builds on those concepts by focusing on an important tool: the Change Impact Analysis.
You might have a fancy car, but without fuel, you’re not going to get anywhere. A Change Impact Analysis is the fuel that will propel your project team towards their desired future state in style. A Change Impact Analysis will also form the backbone of your overall change management strategy during periods of process change.
As you create and socialize the Change Impact Analysis with your project team and sponsors, you’ll notice more alignment between your front-line staff and their leadership. Sponsors will have all the information they need at their fingertips to prioritize and execute change. Front-line staff will feel empowered as they see their ideas articulated and shared up and down the organization. The cost/benefit of your efforts will be more clearly understood.
(***Before I proceed, I should clarify that the change management I’m talking about today is different from the change management outlined in the PMBOK. The Change Impact Analysis is not connected at all with Project Integration Management, a Change Control Board, Change Requests, etc. When I mention change management in this article, instead think of the broader discipline of change management such as what you would encounter during a Prosci training).
What is a Change Impact Analysis?
A Change Impact Analysis is a document which line items proposed changes and assesses their impact to the project team and its organizational ecosystem. (PMforToday.com has a free template in the online store). With that template open for your reference, let’s review the different column headings and examine their significance.
Change ID #: Keep track of your changes by assigning a number.
Status: Make sure this section stays up-to-date as your project team begins working towards their future state.
Description: What exactly are you proposing to change in the current process? Stay concise in your wording.
Overall Impact: One (1) being the lowest and three (3) being the highest. Low impact changes might only affect a handful of team members within a team. Moderate changes impact all or most of a team. And High impact changes will ripple throughout the organization, perhaps touching a few different organizational verticals. Working with your executive sponsor, you’ll need to craft an effective strategy that balances low impact and high impact priorities. High impact changes will bring fundamental change in the long-run, but can be costly to implement. Low impact changes will capitalize on low-hanging fruit, but will they achieve the strategic objectives for your process improvement project? These are all considerations you’ll need to take into account as you think about moving to the future state.
Projected Cost of Change: If you’ll need additional training for staff, how long will that take and how much would that cost? How much would new software cost? If you’ve added any process steps which will increase process, wait, or lead time, what will the hourly impact be?
Projected Financial Benefit of Change: Ideally, this should be tied to any projected changes to your process’s wait, process or lead time. You will either need to express this as a cost savings to the overall process (example: reducing lead time by 5 days will result in $5,000 savings for this quarter); or express the savings tied to a production unit (example: reducing lead time will save $5,000 per cloaking device).
Make sure you clearly express your methodology in calculating the benefit, and indicate whether the benefit is a direct or indirect cost savings.
Projected Implementation of Change: Typically, in the early stages of process improvement this should be expressed as a range; for instance, use years or quarters. However, if the project team expresses a hard date as a constraint, be sure to notate that and alert your sponsor. After reviewing the outcomes of your Kaizen events and the Change Impact Analysis, you’ll be able to create a very detailed, straightforward project schedule, if desired.
Owner of Implementation: Who will ultimately answer for the implementation of the change? For cross-functional project efforts, it’s critical that there is consensus and buy-in on who the owner will be and what authority they will have.
Implementation Collaborators: Who will assist the Owner? Who needs to be consulted, informed, etc.?
Resources Affected: What process documents will need to be updated or created? What customer-facing resources (websites, etc.) will need to be changed based on this process change?
Staff Affected: Who will be impacted internally by the process change?
Gap(s) Between Current & Desired Future State: What needs to change in order for the team to have the tools they need to execute the future state?
Communication Plan: How will you communicate the change before, during, and after implementation? Who will create, execute, and oversee these communications? Do you need a separate internal and external communication plan if the change affects customers?
Once you have completed your Change Impact Analysis, you might be tempted to take your foot off of the gas pedal and coast towards your future state. In reality, filling out the template is only half the battle. Don’t fall into the trap of thinking that by virtue of completing the Change Impact Analysis exercise that you’ve secured 100% buy-in from front line staff and senior stakeholders. You will certainly be faced with resistance to your suggested changes, so be prepared to objectively discuss the pros and cons of what you’re suggesting. Form a change communication strategy which outlines the decision-makers you need to build relationships with in order to make change possible. Keep in mind that not all decision-makers will hold formal authority; oftentimes you’ll need to spend time with individuals who wield substantial informal influence over the processes you are analyzing.
Good luck with your adventures in analyzing and managing change, and please share your war stories of process change in the comments section!
Tell me your thoughts in the comments and let’s open a dialog. I would be excited to hear other opinions on this topic.
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Justin Scoville's unique adventures in project management have spanned international volunteer opportunities in Mexico and Israel, complex government grant programs, and more recently education technology implementations in the private sector. Proudly bearing the battle scars of initiatives both small and large, Justin enjoys exploring the frontiers of project management, particularly its intersection with process improvement methodologies, strategic planning, and product management.
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