Nevertheless, a majority of respondents believe that complexity translates into opportunities for their businesses, focusing on improving existing business strategies, enhancing efficiency, and possibly gaining competitive advantage.
When asked to identify what have been the main causes of complexity over the past two years, one in four Indian respondents identified the impact of increased competition as the leading factor. Other key factors included high customer expectations (16 percent), globalization (13 percent) and changes in regulation (13 percent). Interestingly, less than 10 percent cited the recent economic recession, versus 23 percent globally.
As for the causes of complexity today, a large number of respondents cited information management and the increased speed of innovation. However, when asked to identify the top two factors, more respondents selected regulation (36 percent) and government oversight (32 percent) than any other causes. In fact, Indian respondents unanimously agreed that governments needed to work together to make the global regulatory environment less complex.
Looking ahead, a majority of businesspeople surveyed believe that complexity will increase in India over the next two years, although roughly 30 percent believed that complexity would either decrease or stay the same in that timeframe.
More than 80 percent of Indian businesspeople surveyed expect that increased complexity will impact their cost of doing business. But respondents from India were among the least likely to cite difficulties in making management decisions (36 percent versus a global average of 58 percent) or challenges in making deals and transactions (32 percent as opposed to 58 percent globally) as possible outcomes of increased complexity, which may indicate a growing confidence in dealing with international transactions.
On the other hand, a majority of respondents said that complexity would create new opportunities for their companies in a number of ways. Nine out of 10 suggested they would focus on their existing business strategy; 87 percent expected to find new or more ways to make their company more efficient; 85 percent thought they could gain competitive advantage as a result of complexity; and an equal number expected to find opportunities in creating new and better strategies.
It is also noteworthy that, with the exception of Mexico, Indian respondents were the most likely to expect to find opportunities to expand into new markets as a result of complexity, with 82 percent citing this as a potential outcome.
Respondents in India were also the most likely of all countries surveyed to presuppose a change in the root causes of complexity over the next two years, with almost 70 percent foreseeing change, versus less than 50 percent globally. More than seven in 10 respondents suggested that the increased speed of innovation would create future challenges, and 65 percent cited an increased burden of regulation (other than tax).
In order to respond to complexity in the past, Indian respondents were almost unanimous (94 percent) in saying that their company had improved their use of information management. It should come as no surprise, then, that information management (84 percent) and HR policies (71 percent) topped the list of potential actions that Indian businesspeople expect to take in the future to counteract growing levels of complexity. Additionally, while six out of 10 respondents said they have invested in new geographies in the past as a response to complexity, only 42 percent say they will do this in future. Business reorganization emerges as a more popular strategy, with almost 75 percent believing this to be a potential action for their company going forward.
Overall, the survey results show that, in the majority of business sectors, Indian companies continue to grapple with growing complexity in three key areas: information management – although almost all respondents agreed improvements had been made – regulatory oversight, and human resources. While growth into foreign markets may have been a defining factor for Indian companies in the past, internally-focused strategies are now likely to take center stage over the next two years.
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