In today’s ROI-focused business environment, enterprises often are maniacally attached to the payback equation. They want to know if and when the business case will bring returns. And for organizations making an investment, overcoming financial hurdles can be the singular focus. But there is another hurdle that often is ignored: internal resistance to change. Resistance to change drives inaction and may even impact the enterprise more profoundly than taking an action with a poor or negative financial return.
What creates resistance to change?
Inaction occurs for any of the following reasons:
- Stagnant workforce: Companies keep employees in the same role for an extended period of time and aren’t proactive in providing opportunities for employees to broaden skills via job rotation and career advancement. A lack of commitment to rotation and career progression creates an environment that is not conducive to change and can keep the enterprise mired in the status quo.
- Poor understanding of the importance of organizational change management (OCM): Organizations that take an unstructured approach to OCM – or do not see it as an investment in their future – lose out on significant opportunities to catalyze and incent a change mentality across the enterprise.
- Lack of investment in vendor management: Organizations that fail to implement a proactive vendor management office (VMO) often end up being reactive in nature and struggle to manage existing relationships and contracts. In these cases, decisions are made in contract-specific silos and fail to take into account the broader implications. Without a longer-term perspective, these organizations struggle to facilitate change and take the necessary actions to holistically support the enterprise.
- Lack of chargeback transparency: Companies that do not rely on an effective chargeback process have suboptimal understanding of the specific IT services that support its end users and the cost of those services. This information provides service owners with valuable data that can help them make smart decisions and drive competitive IT solutions.
Enterprises that default to inaction face tremendous competitive disadvantages in today’s market – a market that values rapid change and disruption.
How does an enterprise overcome the mentality of inaction?
Follow these four important steps:
- Ensure leadership adopts a change-agent mentality, emphasizing and encouraging rotational career paths.
- Increase your commitment to OCM by adding staff and program-based expertise that can help drive behavioral change across the enterprise.
- Invest in a VMO and be proactive in reviewing the contract portfolio so you can anticipate upcoming renewals and support them earlier in the process so you have leverage with providers and enough time to test the market for the most effective solution.
- Implement an effective chargeback methodology starting with Technology Business Management (TBM) that can assist service owners in making decisions to stay competitive.
Many organizations need a partner to overcome the attitude of inaction. ISG can help. Contact us to hear about our insights and approaches for staying ahead of change.
About the authors
Rick Reichardt is a Principal Consultant with over 20 years of experience in the Information Technology Industry, as both a Consultant and also as an IT Executive with extensive leadership of large scale outsourcing delivery organizations. His background spans both the technical and financial components of IT Outsourcing transactions. Rick’s extensive background, combined with his strong analytical, communication and evaluation skills allow him to provide clients with effective leadership, direction and recommendations.
Chuck Walker, ISG Partner and America’s Transaction and Transition Leader, leads the Sourcing Strategy group within the Sourcing Solutions team. Chuck brings more than 25 years’ experience in IT strategy, service delivery, consulting and advisory services including assessments, strategies, transactions, implementations, service management and corporate governance and compliance.