Change Management Archives

New Everest Group Research on Change Management Reveals the Huge Chasm Between ‘We Should’ and ‘We Do’ in Global Business Services Centers

November 30, 2022

Change management viewed as critical by 75% of GBS organizations, but only 16% manage change systemically; Everest Group offers practical 12-step guide to help GBS organizations approach, staff, invest in, and manage change.

DALLAS, November 30, 2022 — When enterprises establish a Global Business Services (GBS) center, the mission of the center is to make and sustain a positive change in business operations; however, despite the fact that change is their raison d’être, one-third of GBS organizations have no change management capability within their organization, according to new research from Everest Group.

In a first-of-its-kind study, Everest Group surveyed 58 leading GBS organizations across the globe, followed by in-depth interviews, to better understand their approaches to change management.

“Our study findings indicate that 75% of GBS organizations see change management as critical, overwhelmingly confirming that it is vital to the success of the model, but this does not align with actual execution, as only 16% of these organizations take a systemic approach to managing change across their scope of initiatives,” said Deborah Kops, executive advisor to Everest Group and a co-author of the report.

“Change management is a work in progress for most GBS organizations and poses significant challenges: there is no one-size-fits-all solution; it’s not a once-and-done task; and it’s difficult to define ‘good’ and ‘best’ when so much of what comprises change management is perceived as ‘soft stuff’—unmeasurable and therefore unknowable,” explained Kops. “This research aims to address these challenges head on by defining the dimensions of change management for GBS organizations to help the industry understand how to approach, staff, invest in and manage change.”

Selected Observations

Strategic or Situational?: Only 16% of respondents manage change as a critical component of GBS initiatives, or what we would consider systemic across all aspects of GBS operations. The normative view of change management is that it is situational, triggered by an event.
Biggest Catalyst is Change in Operations: Today, GBS change management at its most evolved is focused on changes in operations, such as a transition to a new delivery model, or to ease the pain of a transformation project, such as digitization.
A Tool to Diminish Resistance: Change management approaches have been focused primarily on informing and breaking down resistance as opposed to helping enterprises adopt and embrace the changes that an agile GBS model continually makes. Over 50% of respondents see change management a tool to “tell” or diminish resistance to a GBS program.
Maturity and Scale Matters: Maturity and scale of the GBS organization impacts the approach to change management: 45% of GBS organizations with large scale (5,000+ FTEs) tend to approach change management as a strategic transformational tool while the majority of smaller organizations (with a scale of 100-999 FTEs) tend to focus on communications and diminishing resistance to change.
Digital Maturity Correlates with Strategic Change Management Approaches: There is a discernable shift from communications to a more strategic approach as respondent organizations mature their digital operations. Over 70% of those GBS organizations embracing digital initiatives focus their change approaches on strategic transformation.

These findings and more are detailed in Everest Group’s recently published report, “State of Play in GBS Change Management.”

In addition to the findings above, the report explores these key questions:

What is the right time to involve GBS change management teams?
Do change management approaches foster real change?
Is the GBS change management operating model aligned with imperative?
To whom does the GBS change management team report? Do they have a seat at the table?
How do GBS organizations measure the success of change management initiatives?
What are the key priorities for GBS change management teams?
What is the scope of responsibilities of GBS change management teams?
What is the preferred approach to build change management competency?
What is the normative size and skills mix for the change management team?
How are change management teams governed?
What is the formula to fund change management?
How do GBS organizations measure the impact of change management teams?

Examining the responses to these questions, Everest Group was able to identify patterns that define four personas, ranging from organizations who have not yet prioritized an investment in change management (“Headshakers”) to those that embed it into all aspects of GBS operations (“Institutionalists”). Falling in between are “Crawlers”—who are gradually moving toward establishing a GBS change management competency— and “Game Changers,” organizations who see change management as necessary and are aggressively establishing it as a strategic capability.

Everest Group has also used the findings of this research to develop a 12-step program to help GBS organizations advance along the persona continuum and “do change management well.”

“One of the most surprising findings of our research was to see how common it was for GBS organizations to take a piecemeal approach to change management rather than developing it and strengthening it as a strategic muscle that is always in use,” said Rohitashwa Aggarwal, vice president at Everest Group. “Our research findings clearly indicate that ideally the change management team will have a seat at the leadership table from the outset of the GBS journey. The team also needs systemic funding, the scope and authority to succeed, and the right talent and training to adapt to all the needs of the GBS organization over time, because, as we’ve said, change is at the very heart of the GBS mission, every day, all the time.”

***Download a complimentary abstract of “State of Play in GBS Change Management”***

About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at www.everestgrp.com.

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Change Management Programs Often Ineffective In Digital Transformation | Blog

November 13, 2019

Businesses have conducted change management programs for 20-30 years. Even so, change management programs are systematically ineffective in delivering results. Unfortunately, the ineffectiveness is much worse today.

That’s because companies are engaged in digital transformation, where the degree of change is much greater than in the past. What causes the ineffectiveness, and what is the remedy?

Read my blog on Forbes

Digital Transformation: 3 Change Management Mistakes to Avoid | Blog

October 2, 2019

Change can be painful for companies and individuals. But if you are undergoing a digital transformation, there’s simply no getting around it. In fact, the degree of change is greater, and there is a cascading set of consequences for these deep changes, which each require their own change management.

At Everest Group, executives often ask us, “What is the most effective change-management tool or method for driving the necessary change in transformation?” Answering that question, I first point out two hard truths:
Executives cause their own problems with change management – often in three key areas – that make their efforts to drive change ineffective. As a result, they encounter big, expensive problems and passive-aggressive behaviors that delay achieving the objectives or even cause the transformation initiative to fail.

People don’t change unless they want to.

Read my article in The Enterprisers Project

Managing Services: A More Effective Approach | Blog

July 18, 2019

In a recent blog post, I explained that companies need to reconceive their services as an evolving journey and need to rethink how they manage services. That’s because services are becoming more strategic in a digital environment and require ongoing commitment and focus to ensure they deliver on their promise. Their evolving nature makes services a cascading change management challenge that remains as long as the service remains. One of the most difficult aspects that companies struggle with is how to build conviction and sustain momentum that they are successfully moving toward delivering value in the services.

Read my blog in Forbes

How to Reduce the Complexities of Change In Digital Transformation | Blog

June 18, 2019

Why do digital transformations experience more failure and face more peril than companies anticipate? Why do they take far longer than anticipated? With apologies to Einstein, I believe we can understand the answers to these questions by viewing them through the lens of “GUT” – (General Unified Theory) of digital transformation – and how many related factors intertwine to increase complexity and complicate change. I’ll explain those factors in this blog and discuss how to navigate them so your company can minimize the perils of change and end up with a beneficial economic model.

Read my blog on Forbes

STEP into Change Management | Market Insights™

April 29, 2019

STEP into Change Management: strategize, take the lead, enact, performance analysis

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Breakthrough Metrics for Solutioning a Customer Transformation Journey | Sherpas in Blue Shirts

November 12, 2015

There’s no silver bullet for driving change; it’s a challenge in any organization and services providers and their clients struggle with this. In working with providers and buyers on transformation deals over the years, I observed the need for breakthrough metrics to drive the change through the buyer’s organization.

As I mentioned in my previous blog post, transformation needs to start with defining the business outcome goal from the customer perspective and then translating it into issues and organizational implications that the delivery organization can align against. Those issues include metrics that you must clearly articulate at three levels in the buyer’s organization:

C-level vision – Here the highest level of metrics calibrate the benefits and what needs to change in the status quo to accommodate the benefits. In the event you find you can’t get to the goal with what you conceive for the journey, you need to start again and conceive the journey differently.
Direct reports responsible for executing on the vision – These metrics focus on the implications for the delivery organization.
Technical talent – Metrics at this level focus on the tools, talent, and process changes that the goal affects. What are the details that the architects need to understand as they solution the goal?

Having metrics at each level puts business transformation not in light of those who are doing it but, rather, those who are experiencing it.

Service providers need to keep in mind that this shouldn’t be a roadmap with a detailed plan. But people at each level in the client enterprise need assistance in understanding what they are trying to do, how they have to measure themselves against that goal, and what the implications are to technology, talent, policy, process, and sourcing. The metrics can’t be prescriptive.

If you’re an executive, you can break through your organization’s obstacles to change by driving change through the benefit goal and the metrics that allow the organization to understand and configure against the goal. First define the experience you’re looking for. Then ask how to accomplish that. You’ll end up with a set of metrics that defines what you have to do to get to that experience.

As an example, let’s say you want to improve the speed of the employee onboarding process. What are the technologies you have to put in place? What talent issues do you have to think through? What policies and processes do you need to think through? What are the consequences of changes to those technologies, talent, policies, and processes? Now you have the metric and sub-metrics that help guide those implications.

Once the client organization is committed to the transformation journey at each level, the service provider can then engage with them around how that should be done.

Photo credit: Flickr

Technology Is Advancing Quickly; So Why Are Organizations Changing So Slowly? | Sherpas in Blue Shirts

October 22, 2015

The pace of new technology is advancing exponentially. But organizations change so slowly. This is particularly frustrating if you’re a senior executive who sees the opportunity to drive efficiencies or value and by making big changes in your organization, yet you find it’s painful and difficult to drive change and you can only make incremental progress. It’s also frustrating if you’re a service provider trying to sell a new vision to a slow-changing organization. What causes the slowdown?

Incentive

People do what they are incented to do and what is in their best interest. Just because technology makes something possible doesn’t mean that people are prepared to change. And driving change is dependent on relationships with other people; highly dependent technologies also impact change. It’s not that individuals want to thwart change; it’s just that change will be thwarted because people always do what is in their best interests, as they perceive it.

Making a change in technology forces change in policies, processes and relationships; and that requires realignment. Alignment is complicated. It’s a combination of organizational incentives, personal incentives, metrics and what we measure, proximity to people, how we relate to one another and technology.

The tragic mistake that clients and providers so often make is believing that changing one aspect – the technology or perhaps a few people – will drive others to change. But it won’t. Driving change requires realigning the organization and ecosystem.

Complexity

Borrowing from the old adage, human behavior is like water – it flows to the lowest point or takes the easiest path. This is a defining principle about why Apple has been so successful: it makes it easy to operate an iPhone or iPad. When we fail to make those same accommodations and think through technology change thoroughly, we can’t drive the organizational and behavioral change we’re looking for.

Change and adopting new technologies is so simple for the architects and designers. But they fail to view it from the perspective of the people who will be affected by the technology. New technology requires creating new steps or more complexity; therefore, new technology is more difficult to utilize than the old technology people are accustomed to and trained on.

Often the new visions based on a breakthrough or change in technology rarely live up to their potential because the service provider only changes the technology or provide new technology to the aspects of the service for which the provider is responsible. So the remaining organization can’t or won’t change; it’s left with the original interests and metrics, and it won’t readily change to accommodate the new structure.

Bottom line

Unfortunately, service providers’ salespersons attempt to beat competitors’ offers by oversimplifying the nature of the change the client will need to undergo.

To ensure client satisfaction and to ensure the technology lives up to its potential, providers selling a new vision and making promises must be far more realistic around the cost and time it takes to accomplish the change from implementing new technology.

Key HRO Service Provider Differentiators | Market Insights™

September 18, 2015

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Implementation, change management support, relationship management, customization, solution breadth, SMAC capabilities, pricing flexibility