Companies around the world are finding themselves challenged by an increasingly complex business environment. This was one of the findings of the global “Confronting Complexity” study conducted by KPMG in which 1,400 senior executives from 22 countries participated. The main cause of increasing complexity is regulation followed by information management, government oversight, increased speed of innovation, tax policy, multinational operations and M&A activities as drivers.
Increasing risks – but new opportunities, as well
Increasing complexity creates new risks, increased costs and a need for new skills. It becomes more difficult to compete, implement change programs and make key management decisions while also slowing down deals and transactions.
However the companies surveyed also see opportunities in the increasingly complex business environment: By taking the right actions, they hope to gain a competitive advantage, create new and better strategies, expand into new markets, make their companies more efficient and create new products. Asian and American companies view the opportunities opened up by increasing complexity somewhat more positively than European businesses.
So far actions only moderately effective
The most important actions for positively addressing complexity are improved information management, reorganization, changed approaches to human resources, investing in new countries or geographies, influencing regulation or public policy, M&A and outsourcing – in this order of priority. While the businesses surveyed may not be entirely satisfied with the efficiency of the actions they have taken so far, they still intend to continue following the path they have embarked on.