How do Standard Changes Create Value?

As discussed in the change management introduction post, standard changes are low on risk and impact meter. They are routine changes which have been implemented a number of times. The probability of these changes failing is very low, and even if it fails, the probability of it causing a considerable impact is negligible.

All organizations will have a good chunk of potential standard changes in their kitty. In the IT industry, it is widely believed that half the changes implemented may fall under the standard type.

Let’s say that an organization on an average implements about 1000 normal changes in a month. Every single change needs to be documented, various approvals obtained, analyzed and closed, I am only referring to the process activities and not the technicalities of building, testing, implementation and verification. If each change takes about 30 minutes, overall change management effort ranges around 500 man hours monthly. Yearly, it is about 6000 man hours.

Suppose we standardize 30% of the overall changes, conservatively speaking. There is certain effort that goes into standardizing changes, but it is minute as compared to the savings obtained through standard changes. To process every standard change, it takes about 5 minutes. For the 300 standard changes in a month, the overall man hours expended is 25 hours. Plus, there are the remaining 700 normal changes that amount to 350 man hours. Totaling the two gives us 375 man hours monthly. This is a potential saving of 125 man hours in a month, which translates to a yearly saving of 1500 man hours.

Standard changes create value by reducing the operational costs. In the illustration, 1500 man hours amount to 3-4 FTE savings, considering resources work for 40 hrs / week.

The value creation does not end with the potential savings. Standard changes help organizations work in an efficient and agile manner. These changes can generally be implemented at any time, giving the flexibility for the technical and business stakeholders to achieve targets without waiting for the various approvals, documentation and analysis. Having the ability to implement changes on the fly is a powerful arsenal to possess, and standard changes provide the ammunition by bypassing on the lead times and the technical and management approvals.

Leveraging on standard changes is the only way an organization can achieve value through change management. In the next post, I will explain how change management principles are not compromised by waiving the lead time, analysis and approvals.

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