Cloudonomics: The Business Value of Cloud Computing, + Website

Fear of Change

There are hard-dollar costs associated with change. Determining relevant options drives up information costs: bringing in the vendors for technical reviews; clarifying requirements through innumerable business unit meetings; writing requests for information, requests for proposals, and requests for quotes; legal review; evaluating responses; repairing relationships with the vendors who were not selected. Making the change incurs switching costs: contract termination or renovation, training in new processes, computing environment migration, and application rewrites. And, given that all these activities require resources, there are not only the hard costs of engaging in them but the opportunity costs of diminished or delayed progress in other activities on which these resources could be working.

In addition to a rational assessment of the costs of change, a host of complementary psychological, behavioral, and neuroeconomic factors dissuade people from change: Generally, change entails uncertainty, and humans are hardwired to dislike uncertainty. As Paul Strebel, a professor at the International Institute for Management Development said, top managers see change as way to improve the business and for personal development, but for “many employees. . .change is neither sought after nor welcomed. It is disruptive and intrusive. It upsets the balance.”23

Fear of change is intimately tied in with the need for control and the need for certainty. It is not necessarily change ...