DECEMBER 19, 2024
If there is one thing to be expected in today’s business landscape – it’s continuous change. According to Gartner, most organizations have experienced five company-wide changes in the past three years, with this number expected to rise in the future. However, only one-third of these change initiatives are successful.
As a result, organizations are increasingly prioritizing change management to tackle their challenges and enhance agility, as reflected in their planned investments. A recent report from Accenture reveals that 96% of organizations plan to allocate more than 5% of their total revenue to change initiatives over the next three years, a significant increase from just 31% three years ago.
Moreover, at Evanta, a Gartner Company, we recently surveyed over 800 C-level executives, highlighting this trend. The survey shows that 97% of respondents invested in change management initiatives in 2024. Twenty-one percent cite high investment, 45% report moderate investment, 31% indicate low investment, and only 3% are not investing in change management.
The survey also sheds light on trends in the current change management landscape and planned spending in this area. Here, we outline some of the key findings.
Tech Advancements and Mergers & Acquisitions are Driving Change Management
Eighty percent of C-level executives report that they are currently undergoing change management initiatives, with an additional 8% planning to implement them in the future. Only 12% indicated they were not involved in change management at the time of the survey.
Several factors are contributing to the high rate of change management initiatives. In the survey comments, a significant number of respondents identified the adoption of new technologies, such as AI, cloud migration, and digital transformation, as the most critical factor. Additionally, many executives noted that their change management efforts are driven by mergers and acquisitions (M&A) and internal restructuring to align with new strategic goals. There is also a strong emphasis on optimizing business processes, cultural and leadership transitions, and regulatory and compliance requirements as key drivers for change management.
50% of Organizations Rely on External Resources for Change Management
Organizations encounter multifaceted challenges in implementing change management, including leadership buy-in, communication, resource constraints, general resistance to change, and change fatigue. To mitigate these obstacles, many executives are turning to external vendors and consultants for expertise, resources, and strategic guidance.
One executive highlighted the value of external resources, stating, "Employ external resources for bigger volume changes." Another added, “Ensure there are resources (even if outsourced) allocated to the change initiative.”
In the survey, 50% of C-level executives report utilizing or planning to utilize external vendors or consultants for change management initiatives. Among individual C-level roles, CIOs are utilizing vendors and consultants the most, with 57% either already using or planning to in the future.
Vendors and Consultants are Supporting All Facets of Change Management
Executives are leveraging external vendors and consultants for all aspects of their change management initiatives, including strategic guidance and planning, implementation, training, and communication. These external partners provide high-level strategic advice, planning, and execution of change management programs, including designing change management approaches and strategy development.
Vendors are also actively involved in the implementation and execution phases. Many executives mentioned they are using them to “augment their internal teams,” providing additional capacity and specialized skills needed for change management efforts.
As organizations struggle to obtain buy-in from employees, external vendors are engaged in training initiatives, including agile training, process mapping, and developing training programs to build internal capabilities. One executive noted, "Training cohorts to be certified practitioners; help to establish ‘train the trainer’ fundamentals."
Overall, vendors and consultants play a critical role in providing expertise, capacity, and strategic direction to support organizations in their change management efforts. Here are a few more comments from C-level executives in the survey:
Guiding leadership on the critical planning of change leadership initiatives."
Expertise on new processes, technology and project management."
Design and build the technology solutions, technologies, and processes."
We use vendors to supply hardware and cloud-based solutions, and consulting to set up new solutions in an effective, yet secure manner.”
Embracing Change Management for Future Success
As organizations continue to face an ever-increasing pace of change, executives are prioritizing and investing in robust change management practices to be better positioned to adapt and thrive.
If your business has expertise in change management, digital transformation, AI or other innovative enterprise solutions, learn more about sponsoring Evanta C-level communities and programs and how we can help you connect with C-level decision makers from the world’s leading organizations.
