How to Apply Change Management to Technology Transformation

Technology transformation is necessary for staying ahead. However, moving from legacy systems to more innovative digital solutions is fraught with challenges, from addressing resistance to seamlessly integrating new technologies. 

This is where organizational change management (OCM) becomes indispensable. By focusing on the people side of change, effective OCM helps ensure that technology transformations are implemented and embraced across the organization. Because digital transformation strategies are critical to maintaining competitiveness, OCM is an essential tool for organizations today.

This article explores how applying change management to technology transformations can unlock opportunities for success.

What Is Technology Transformation?

Technology transformation is a strategic initiative that organizations undertake to integrate digital technologies into their operations, fundamentally altering how they function and deliver value. This transformation can involve several types of changes:

Digitalizing processes – This involves using digital technologies and data to transform business operations, models and customer experiences to create new value for owners and users. By digitalizing processes, organizations can streamline operations, reduce costs and increase agility, enabling them to respond swiftly to market changes and opportunities. This transformation also facilitates data-driven decision-making, providing insights that support strategic growth and competitiveness. 

Adopting new technologies – This means bringing on cutting-edge technologies such as Artificial Intelligence (AI), cloud computing, and the Internet of Things (IoT). These technologies enable real-time data analysis, help teams make better decisions faster, and keep these companies up to date in their industry. Adopting new technologies enables them to remain competitive and responsive to market changes.

Shift to digital business models – This change can mean transitioning from product-based to service-based models, such as subscription services, which can open new revenue streams and improve the customer experience. In fact, according to 89% of board directors, digital should be a part of all growth strategies. That’s why embracing digital business models is essential for organizations aiming to offer new value propositions. 

What drives technology transformation?

Technology transformation is fueled by key drivers that push organizations to innovate and evolve. Understanding these forces helps organizations strategically align their change management efforts to stay ahead.

Market competition – Staying competitive requires continuous innovation and adaptation to new technologies. Otherwise, it’s easy to fall behind competitors.

Customer expectations – Modern customers demand seamless, personalized experiences, pushing companies to adopt digital solutions that enhance customer satisfaction.

Operational efficiency – Streamlined processes and reduced operational costs are critical for maintaining profitability and achieving sustainable growth.

By recognizing and leveraging these drivers, organizations can manage their technology transformation more effectively, paving the way to address the challenges they will face.

Challenges in technology transformation

Although technology transformation offers some great opportunities, it also presents significant hurdles that organizations must overcome to succeed. Here are some of the most common challenges organizations face:

Complexity and scope – The breadth and depth of digital transformation initiatives can be daunting, requiring careful planning and execution. 

Lack of digital literacy – Employees' inability to effectively use new technologies can be a significant barrier, sometimes necessitating comprehensive training programs. If your technology transformation involves changing basic components of your technology systems (such as enterprise architecture, application architecture and systems architecture), you’ll only see the benefits if your team knows how to implement and use them.

Resistance to change – Organizational barriers can create resistance and impede transformation efforts, highlighting the need for effective change management strategies.

Integration with existing systems – Ensuring that new technologies seamlessly integrate with legacy systems is a complex but essential task for successful transformation. In fact, 63% of companies have service issues every month (or more frequently) due to application integrations not working.

By addressing these challenges and using new technologies, organizations become more capable and position themselves for long-term success.

The Importance of Organizational Change Management for Technology and Digital Transformation

OCM is a structured approach to managing the people side of change. It ensures that new initiatives are adopted and sustained successfully by focusing on how individuals adapt to changes. OCM helps organizations implement and embrace new technologies effectively.

Because OCM emphasizes the people side of change, it can help your team implement and embrace new technologies across the organization.

Prosci research shows that projects with excellent change management are seven times more likely to succeed. By fostering leadership and sponsorship, developing comprehensive communication strategies, and equipping employees with necessary skills, OCM minimizes disruptions and maximizes the benefits of digital transformation efforts. 

Key Components and Principles of OCM for Digital and Technology Transformation

Digital and technology transformations require a strategic focus on managing the human aspects of change. OCM enables organizations to navigate these human aspects successfully through several key components and principles, including:

Unified methodology and strategy

A unified change management methodology, such as the Prosci Methodology, provides a structured, adaptable and repeatable approach to managing change. It also ensures all change efforts align with the organization’s strategic goals and that employees are prepared and supported throughout the transformation process.

Leadership and sponsorship

Active and visible sponsorship is crucial for driving change and building a coalition of support. Business leaders must articulate their vision for change, align it with organizational goals, and inspire employees to embrace new ways of working. 

Effective sponsorship involves endorsing the change and actively participating in its implementation.

Communication strategy

Clear and consistent communication is essential for building awareness and understanding of the change. A comprehensive communications plan should deliver tailored messages to different audiences, outlining the benefits of the change and addressing potential concerns.

Training and support

For a successful technology transformation, you must equip employees with the knowledge and ability to adapt to new systems and processes. Knowledge involves understanding the necessary information and skills required to navigate changes, while Ability refers to applying these skills in real-world scenarios. These are critical elements of the Prosci ADKAR® Model. 

Training should be tailored to different roles and delivered through various formats, with ongoing support to help employees navigate challenges.

Measurement and evaluation

Tracking progress and outcomes ensures alignment with the organization’s strategic goals and continuous improvement. Your organization should establish key performance indicators (KPIs) to measure the effectiveness of change management efforts and the impact of the transformation. 

Regular evaluations help identify areas for improvement, allowing you to adapt their strategies and actions as needed. By demonstrating the value of change management through data-driven insights, your organization can build credibility and secure ongoing support for future initiatives.

These key components and principles of OCM for digital technology transformation provide a starting point for managing the people side of change. 

The Benefits of OCM in Technology Transformation

Understanding OCM is just the beginning—recognizing its importance is key. By prioritizing the people side of change, OCM facilitates the effective implementation of new technologies and ensures these changes are sustainable over time. Here’s a quick overview of what you can achieve through OCM:

Increase adoption and usage

One of OCM's primary benefits is its ability to drive higher adoption and usage rates of new technologies. By addressing the human aspects of change, OCM helps employees understand the value of new systems and processes, helping to prevent resistance and encourage engagement. 

Research indicates that projects with excellent change management are seven times more likely to achieve their objectives.

Correlation of Change Management Effectiveness With Meeting Project Objectives

An increased likelihood of success often translates to achieving the expected return on investment (ROI), realizing benefits from change faster, minimizing costs and rework, and more.

Reduce resistance to change

Resistance is a natural reaction to change, but it doesn't have to hinder your digital technology transformation. OCM equips your team with strategies and tools to proactively prevent resistance and foster a people-focused approach to change.

By involving employees in the change journey, providing clear communication, and offering robust support and training, OCM helps prevent resistance. This approach equips your people to move through today's changes and digital transformation trends on the horizon.

Improve project outcomes

OCM contributes to improved project outcomes by aligning change efforts with organizational goals and ensuring all those impacted by the change are on board. Integrating change management and project management enables organizations to address both the technical and people sides of change, leading to more comprehensive and effective solutions. 

This alignment helps to avoid common pitfalls such as scope creep, budget overruns and missed deadlines, ultimately enhancing project success.

Increase operational efficiency

Technology transformation often aims to streamline processes and improve operational efficiency. OCM plays a crucial role in achieving these goals by ensuring that employees are prepared, equipped and supported to adopt new ways of working. 

Through targeted training and support, OCM helps employees develop the necessary skills and competencies to leverage new technologies effectively. This increased proficiency leads to more efficient operations and a higher quality of work.

Enable a culture of continuous improvement 

Implementing OCM in technology transformation efforts helps to foster a culture of continuous improvement within the organization. By encouraging employees to embrace change and adapt to new technologies, OCM promotes a mindset of innovation and agility. This cultural shift enables organizations to respond more effectively to future changes and challenges, positioning them for long-term success in a rapidly evolving digital landscape.

Reinforce change capability

One of the long-term benefits of OCM is that it develops change capability within the organization. Building a strong foundation of change management skills and competencies in people equips organizations to manage future transformations effectively. This capability ensures that organizations are better prepared to handle the complexities of change, reducing the reliance on external consultants and enabling more sustainable change efforts.

Strengthen stakeholder relationships

OCM helps to strengthen relationships with key stakeholders by fostering open communication and collaboration. By involving all those impacted in the change process and addressing their concerns, OCM builds trust and ensures alignment with organizational objectives. This collaborative approach enhances commitment and support, which is essential for the success of technology transformation initiatives.

These all sound like appealing benefits. But does OCM actually work with the real-world complexities of technology transformation at scale? Let's look at some case studies to see how things go when organizations put OCM into practice. 

Examples of OCM in Technology Transformation

OCM is a practical way to manage some of the hardest parts of technology transformation. By focusing on the people side of change, OCM ensures smooth transitions and successful outcomes. Here are two case studies that exemplify the power of OCM in technology transformation:

Case study 1: ERP change after merger

Large mergers often bring the potential for chaos, especially when enterprise resource planning (ERP) systems need merging. In one such scenario, the merger threatened to disrupt operations with the daunting task of transferring 56,000 records. However, by leveraging the Prosci Methodology, the organization successfully overcame this challenge.

The change management team employed a structured approach, focusing on clear communication and stakeholder engagement. They conducted thorough impact assessments to understand how the change would affect different parts of the organization. They also created training programs to equip employees with the necessary skills to adapt to the new ERP system.

A key element of their success was their leaders’ active involvement, who provided visible sponsorship and support throughout the transition. By addressing potential resistance early and maintaining open lines of communication, the organization achieved a seamless integration. The result was 56,000 users on the new platform in 45 days and a rapidly growing, successful company.

Case study 2: Migrating to ServiceNow

In another example, Velera migrated to ServiceNow for time tracking. This initiative was part of a broader enterprise-wide transformation to make their internal processes more efficient and transparent.

Velera employed the Prosci Methodology for change management, including tools like the Change Impact Assessment and the Prosci Change Triangle (PCT) Model, to guide their efforts. Identifying impacted stakeholders and developing a comprehensive communications plan ensured that employees were informed and prepared for the change.

Training sessions, Prosci Knowledge Hub articles, and lunch-and-learn events built users' knowledge and ability. The change management team also tracked user adoption metrics to monitor progress and make necessary adjustments.

The migration to ServiceNow was a resounding success, resulting in high adoption rates and significant process improvements. The new system gave leadership valuable data insights, enabling better decision-making and cost efficiencies. This case study underscores the importance of OCM in achieving successful digital transformation initiatives.

Both of these are examples of change done right. However, they wouldn’t have seen the same level of success if they hadn’t followed certain key best practices for applying OCM to their technology transformations.

Best Practices for Using OCM in Technology Transformation

But OCM isn’t a magic bullet. It still requires a lot of smart and hard work. Here are some best practices to ensure your OCM efforts succeed:

Correlation of Sponsor Effectiveness With Meeting or Exceeding Objectives

Engaging leadership

One of the most critical aspects of OCM is engaging leadership to ensure active and visible sponsorship. The 12th edition of our Best Practices in Change Management study revealed that the more effective your sponsor is, the more likely your team will succeed in a change.

It also identified insufficient stakeholder engagement, including leaders and sponsors, as the number one obstacle to change success. Lack of leadership commitment and support was the second greatest obstacle. Conversely, active and visible executive sponsorship is the greatest contributor to successful change initiatives. Building a coalition of support among leaders helps drive change, aligning organizational goals and fostering a unified approach.

Communicating and training effectively

Developing clear communication strategies is essential for building awareness and understanding among employees during a transformation. Effective communication helps convey the vision and benefits of the change, reducing uncertainty and resistance. It is crucial to tailor messages to different audiences to ensure that each person receives relevant and impactful information.

In addition to communication, comprehensive training plays a vital role in equipping employees with the knowledge and ability needed to adapt to new technologies. Training programs should be thoughtfully designed to address the specific skills and competencies required for the transformation. This will ensure that employees are well-prepared to embrace new processes and systems. By offering a mix of workshops, eLearning modules and hands-on practice, organizations can cater to different learning styles and ensure readiness for the change.

Furthermore, establishing regular feedback loops is key to maintaining engagement throughout the transformation journey. By setting up mechanisms for continuous updates and feedback, such as regular check-ins, surveys and interactive forums, employees remain informed and have the opportunity to voice concerns or suggestions. This fosters a sense of involvement and commitment, making the transformation sustainable over time.

Preventing resistance

Resistance is a natural response to change, but proactive strategies can mitigate it. Identifying potential sources of resistance early allows organizations to address concerns before they escalate. 

Developing strategies to address and mitigate resistance involves engaging with employees, listening to their feedback, and providing support throughout the transition. By fostering an open and inclusive environment, organizations can minimize resistance and encourage a positive attitude toward change.

Adopt Technology by Focusing on People

Successful technology transformations require a balanced focus on both the technical and people sides of change. Industry leaders understand that engaging employees and fostering cultural alignment are essential for effective digital transformation.

Ready to elevate your organization's change journey? Partner with Prosci and tap into our deep expertise in managing the people side of change. Together, we can empower your team and drive the transformation your organization needs.