According to a study released Wednesday from KPMG, more than 90% of senior executives believe that for their companies to succeed, they must manage complexity well. However, less than half of them believe they are effectively doing so.
The study, titled "Confronting Complexity: How business globally is taking on the challenges and opportunities," showed that 70% of executives point to such factors as regulatory compliance, information management, government oversight, changing operating models, speed of innovation, tax policy, and other matters as causing the business complexity that is responsible for their biggest challenges.
Regulation topped the list, with nearly 75% citing it as creating complexity; it was followed by government oversight, mentioned by 60%. Those two issues coupled together, as global inconsistency of regulation, were cited by 90% of respondents who called for governments to cooperate to make the global regulatory environment less complex.
The study polled executives from 22 countries to determine their views. At least 70% of executives see complexity as a creator of new opportunities, by helping them get a competitive advantage over their peers, create better strategies, move into new markets and improve efficiencies. Less than half, however, believe that they are handling complexity effectively, despite using such effective tactics as improving information management, business reorganization, investing in new countries or geographies, and conducting mergers or acquisitions.
Alan Buckle, global head of advisory for KPMG's network of firms, said in a statement, "Business needs the ability to manage simply, continually streamline, not create internal bureaucracy, and be good at executing. We find that organizations are most successful when they keep their business models simple and don't create more complexity of their own with the actions they are taking."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.