Confronting Complexity: Managing increasing risk 

A large majority of the businesses polled in this survey feel the effects of increased complexity primarily through an increase in the number of risks they have to manage. As we noted earlier, a common response to identifying a new risk is to create a new program to handle it. It doesn’t take long before the number of programs is itself a new cause of complexity, not least because these programs often overlap and, once in place, it can be very difficult to remove or consolidate them.

This is not just a problem of organization, it can be a major contributor to costs. A survey carried out for KPMG in September 2009 (The Convergence Challenge, KPMG and EIU, 2010) revealed that 50 percent of respondents thought governance, risk and compliance costs account for 5 percent of overall revenues, while for 20 percent they were as high as one-tenth.


These costs might not be a significant problem if they were seen to be providing a good return on investment. But only one-third said they were able to see this as an investment. For the rest, it was simply a (rising) cost of doing business.

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Get a detailed look at the key themes arising from the Confronting Complexity Report.

Confronting Complexity examines the causes and impact of complexity among large companies. The study shows that business is taking significant actions to address complexity but success has been mixed.