More Chinese enterprises are willing to invest in transformation projects, but lack confidence in their capabilities of managing changes, with only a relatively small proportion of companies having mastered the ability to achieve significant value from change initiatives, according to a new report released by global consultancy Accenture.
The report said that all of the surveyed Chinese companies are planning to invest more than 5 percent of their total revenues in change initiatives over the next three years, while only 20 percent of the interviewed executives have confidence in their change capabilities.
It noted that 68 percent of polled Chinese firms have undergone two or more transformations in the past three years. About 40 percent of surveyed Chinese executives cited high financial costs as a common obstacle in their transformation journey.
As business leaders are increasingly committed to driving reinvention across the enterprise, Accenture's latest report underscores the value of building continuous change capabilities for achieving a more predictable and positive impact across the business.
Chinese companies hold a very positive attitude toward change, but have some concerns and are facing mounting challenges from transformation, said Robert Hah, president of strategy and consulting at Accenture Greater China, adding that they should push ahead with change initiatives with a particular focus on strategy, research and development innovation, operations and information technology over the next three years.
The report also found that 26 percent of surveyed Chinese companies have the awareness of embracing AI, and 32 percent of them have begun to redesign job roles to better adopt the technology. However, the figure is still below the global average level.
In the past four years, technology has become the most prominent factor affecting changes in the business environment, Hah said, adding that the adoption of generative artificial intelligence technology is a key factor driving change and called for efforts to ensure the responsible use of AI and safeguard data security.
According to the report, the key to navigating change successfully lies in embracing six capabilities of continuous change. These capabilities include "foundations", or proven practices known to drive success, as well as "innovations", which refer to areas of new thinking and practice enabled by technology, data and AI that are focused on turning insights into action.
Only 16 percent of the 1,000 organizations surveyed worldwide are implementing all six capabilities of change at scale, suggesting there's more work to be done.
"Companies that embrace reinvention as a strategy, where they drive a step change in performance through the power of technology, data and AI and new ways of working, are outperforming the competition. These organizations have also made change management a core competency," said Jack Azagury, group chief executive of consulting at Accenture. "Change must be built as a capability to continuously reinvent and should be part of the organizational DNA."
Amid radical shifts in ways of working, changes in technology including generative AI and the constant potential for unforeseeable disruption, the ability to effectively navigate and measure change has become a critical competency for business leaders, the report said.
Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association, underscored the significance of developing digital technologies represented by AI, which will inject fresh impetus into the intelligent transformation and upgrading of enterprises.
He said Chinese enterprises have sped up their transformation in their globalization process, with the application of generative AI technology in these enterprises' efforts to expand their footprint in overseas markets becoming increasingly obvious.
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