Abstract:
Despite making significant investments in transformative initiatives, many companies fail to deliver their projected return on investment. Research shows that the primary barrier is not technical in nature, but the absence of effective Organizational Change Management (OCM).
This article examines how Internal Audit (AI) can play a strategic role in protecting ROI by embedding OCM principles into its project assurance methodology. Rather than focusing solely on traditional compliance, budget, and timeline metrics, Internal Audit can proactively identify people-side risks — such as leadership misalignment, stakeholder resistance, and inadequate adoption — that commonly erode or reduce expected financial benefits.
Drawing on a detailed case study from a global telecommunications company, the article demonstrates how Internal Audit applied a new “OCM ROI Assurance” methodology using the LaMarsh Global Managed Change™ framework. This approach enabled the audit team to diagnose root causes of unrealized P&L impact and provide actionable insights that traditional audits typically miss.
As more audit teams adopt artificial intelligence for routine auditing tasks, they gain the capacity to focus on more strategic work. By using the additional bandwidth to incorporate Organizational Change Management into their scope, Internal Audit teams can support senior leaders in protecting the return on investment promised in their change initiatives.
By shifting the audit lens from “Was the system implemented?” to “Is the organization ready and willing to adopt the change?” Internal Audit can significantly improve benefit realization and deliver greater value to the organization.
Introduction
The past is not much different from today as organizations invest large sums of money to transform. The investments could be digital transformation, process reengineering, mergers and acquisitions or new product launches. However, time after time, organizations have struggled to demonstrate timely and measurable financial benefits from their investments. Artificial Intelligence investments are not immune to these challenges, with studies consistently showing that a significant proportion of AI initiatives fail to achieve their intended financial outcomes.
The lack of measurable investment return can be a drain on operating results and future earnings. There is a valuable opportunity for Internal Audit to play an important role in helping improve the odds of business benefit realization. By having IA expand their traditional scope to include reducing the risks to business benefits by adopting Organizational Change Management principles into their assurance frameworks.
The Persistent Project Value Gap
Multiple studies confirm that poor or non-existent change management is one of the leading causes of failed benefit realization. According to McKinsey, only 30% of transformation programs succeed in meeting their objectives. Prosci’s Best Practices in Change Management research consistently shows that projects with excellent change management are six times more likely to meet their objectives than those with poor or no change management. This is regardless of industry, location or size of the company or initiative.
Despite investments in technology, project management, and risk oversight, change adoption remains underfunded or poorly assessed, risking key business benefits. When employees fail to adopt new processes, leadership fails to align, or impacted stakeholders are not properly engaged, even technically flawless projects fail to deliver expected financial results. Additionally, multiple change projects in the same functional area that fail to address the people side often create confusion, leading to minimal implementation.
Internal Audit’s Strategic Role
Traditional internal audit excels at evaluating governance, financial controls, project spend, and technical deliverables. However, historically, little attention has been given to whether the organization is genuinely ready, who must change how they work, or which leaders are aligned. By deliberately embedding OCM into the project audit lifecycle, Internal Audit can identify human and cultural risks early, provide objective assessments, and recommend practical mitigations. This shift transforms IA from a reactive assurance provider into a proactive value protector. By educating the Internal Audit staff in change management, they are then capable of determining the likelihood of success and make actionable recommendations to shore up the gaps and weaknesses before it’s too late or rework is required. This requires a company to engage Internal Audit early in the project lifecycle.
The Adoption Gap – A Real-World Case Study
A large global telecommunications company provides a compelling example. Facing competitive pressure, the company launched dozens of strategic initiatives designed to close a margin gap with its largest rival. Projects included new billing systems, customer experience platforms, process automation, and organizational restructurings. Clear financial targets were set, and substantial capital was allocated.
By year-end, project teams declared most initiatives “complete.” Yet the expected positive impact on the P&L did not materialize. Curious about the disconnect, the CFO engaged Internal Audit to validate which projects had actually delivered their promised financial benefits.
After a detailed review, Internal Audit could substantiate almost none of the projected benefits. When asked to explain why, the IA team developed a new assessment methodology that incorporated analytical and evidence-based elements based on the LaMarsh Global Managed Change™ model.
The audit uncovered that the primary issues were not technical, but human and organizational:
- Lack of engaged sponsorship and leadership changes negatively impacted the ability to achieve outcomes.
- Too many projects were launched targeting the same functional areas without sufficient clarity causing fatigue and confusion.
- Sponsors were not in agreement on the changes that moved across their departments.
- Lack of clear understanding of who must change their ways of working and in what manner.
- Unclear definition of the future state led to long project cycle times.
- Misaligned governance resulted in the lack of authority to drive change.
Such findings demonstrated that the absence of structured change management was the root cause of the unrealized value. As with most audit findings, leadership committed to remediating the risks and began treating OCM as a core competency, and embedded the methodology and deliverables into all initiatives with a path to engage Internal Audit early in the project lifecycle.
Integrating a Change Management Framework into Audit
Internal Audit needed a proven framework to assess change management. After evaluating several methodologies, the Internal Audit team selected LaMarsh Global Managed Change™ framework for several key reasons:
- It is highly data-driven with clear analytical deliverables.
- It has a proven track record across industries, cultures and organizations.
- It is scalable by company size, project size and complexity.
- It integrates well with established audit and risk frameworks such as COSO ERM and COBIT.
- It offers a structured process methodology rather than just a collection of tools.
Once adopted, the framework was embedded into project audit work papers, risk assessments, and reporting templates. Auditors began asking new questions:
- Has a clear sponsor been identified and are they actively engaged?
- Have the true impacts on people been mapped and addressed?
- Is there a structured communication and engagement plan?
- Are resistance risks being actively managed?
As Internal Audit starts to leverage various artificial intelligence tools to improve the productivity and efficiency of their audits, the staff can use the extra bandwidth to develop new skills in OCM. The next step would be adding OCM into the assurance methodologies, providing a new strategic offering for Internal Audit to support senior leaders of their companies.
Tangible Benefits for the Organization
Embedding OCM into Internal Audit delivered measurable advantages:
- Stronger ROI Assurance: Risks to benefit realization are identified and addressed much earlier in the project lifecycle.
- Reduced Project Risk: Fewer last-minute surprises, delays, and costly rework.
- Improved Change Agility: Making future transformations smoother and reducing change fatigue.
- Enhanced Governance: Provides executive leadership with greater confidence in major investment decisions.
Five Actionable Recommendations for Financial Executives and Internal Audit Leaders
- Expand the Audit Scope – Include people-side risk assessment in every significant project audit, leveraging AI tools to identify potential adoption challenges and trends.
- Build OCM Competency – Provide targeted training for audit staff on change management principles, using AI-driven analytics to highlight key risk areas and suggest mitigation strategies.
- Collaborate Early – Engage Internal Audit during project initiation rather than only at the end, incorporating AI insights to anticipate potential bottlenecks.
- Develop Standard OCM Audit Tools – Create templates and checklists based on a proven framework, augmented with AI capabilities to automate risk scoring and trend analysis.
- Report on Adoption Risk – Include benefit realization risk ratings in audit reports to leadership, supported by AI-generated forecasts and scenario modeling.
Conclusion: From Compliance to Value Protection
In an era defined by continuous transformation, the ability to successfully bring people along with change has become a core competitive advantage. Internal Audit is uniquely positioned to safeguard this advantage.
By embedding Organizational Change Management into its core assurance processes, Internal Audit moves beyond traditional compliance and begins auditing the foundation required for success. When people adopt new ways of working, promised efficiencies, cost savings, and revenue growth can be realized.
Financial executives who empower their Internal Audit teams to address the human side of change will significantly increase the likelihood that their major investments deliver the value they were intended to create.
