The return on investment generated by most organisational change initiatives is not delivered by the technology, process, or structural change alone—it is unlocked by people adopting and sustaining new ways of working.
People-Dependent ROI refers to the portion of a project’s total expected return that relies on successful human adoption. Understanding and quantifying this figure is one of the most powerful tools available to change managers seeking to justify investment in the people's side of change.
Definition and Distinction
People Dependent ROI refers to the proportion of a change initiative's projected financial benefits that will only be realised if the intended population adopts new behaviours, systems, or processes to the required level and sustains that adoption over time.
This is distinct from total project ROI (which includes benefits from technical efficiency gains independent of adoption), adoption rate projections (which describe expected levels of adoption without quantifying their financial value), and benefits realisation (which is the post-project process of measuring whether projected benefits have been achieved).
For most change initiatives driven by technology implementation, process redesign, or organisational restructuring, the majority of projected benefits are people dependent. A new ERP system delivers no efficiency gain if employees continue to use workarounds. A redesigned process creates no cost saving if teams revert to former methods. Quantifying this dependency makes the financial case for change management investment explicit.
Why People Dependent ROI Matters for Change Management
The ability to express change management's value in financial terms is a significant advantage in securing sponsor commitment, adequate resourcing, and organisational prioritisation. Research by Prosci (2023) consistently demonstrates that projects with excellent change management performance are seven times more likely to meet or exceed their objectives than those with poor change management. People Dependent ROI translates this finding into the specific financial context of the project under assessment.
People Dependent ROI also provides change managers with a logical framework for investment justification: if $8 million of the project's projected $10 million in annual benefits are contingent on adoption, then investment in change management activities that improve adoption from 60% to 90% can be expressed in terms of the incremental benefit unlocked—a far more compelling argument than a general claim that 'change management is important'.
Calculating and Documenting People Dependent ROI
People Dependent ROI is calculated by:
Identifying the project's total projected financial benefits (from the approved business case);
Categorising each benefit as either technical (realised regardless of adoption level) or people dependent (contingent on adoption);
Estimating the proportion of total benefits that are people dependent;
Modelling the financial impact of different adoption scenarios (e.g., 60%, 80%, and 100% adoption rates).
Example of a well-documented People Dependent ROI analysis:
The project's business case projects total annual benefits of $12 million. Of this: $2 million relates to infrastructure cost savings that will be realised upon technical migration, regardless of user adoption. The remaining $10 million relates to productivity gains, error reduction, and reporting speed improvements—all of which require employees to adopt new workflows in the new system. At 60% adoption, People Dependent ROI is $6 million. At 90% adoption, it is $9 million. The $3 million difference represents the financial value of improving adoption from 60% to 90%. Investment of $420,000 in change management activities is therefore projected to generate a return of more than 7:1 on People Dependent ROI alone.
Common Pitfalls and How to Avoid Them
Not distinguishing between technical and people-dependent benefits: Failing to separate these two categories results in an imprecise estimate of what is at risk if adoption is poor. Invest time accurately categorising each benefit from the business case.
Using adoption rate assumptions without evidence: Adoption rate projections should be grounded in evidence from change readiness assessments, stakeholder surveys, or comparable historical projects. Unsubstantiated assumptions undermine the credibility of the ROI analysis.
Not communicating People Dependent ROI to the project sponsor: This metric is most valuable when shared with the executive sponsor as a basis for securing change management investment. Prepare a concise, one-page summary of the People Dependent ROI analysis for sponsor briefings.
Treating People Dependent ROI as a fixed figure: As the project evolves and adoption data from early phases becomes available, the People Dependent ROI analysis should be updated to reflect emerging adoption realities and refine the investment case.
References
Prosci. (2023). The Value of Change Management. https://www.prosci.com/resources/articles/the-value-of-change-management
Hiatt, J. M. (2006). ADKAR: A Model for Change. Prosci. https://www.prosci.com/resources/articles/adkar-model
Creasey, T. (2009). Defining Change Management. Prosci. https://www.prosci.com/resources/articles/defining-change-management