MANY businesses now operate in networks spanning multiple locations and entities. This has made these organisations more complex and thus more difficult to manage.
This was never more evident than during the credit crisis and resulting global recession. As companies grew, so did the complexity in their businesses.
During the last decade, this was hidden by a benign business environment and for many the global recession has exposed the shortcomings of their operating model whilst at the same time increasing the need to respond to strategic challenges.
In the downturn the majority of businesses undertook a combination of strategies; some retrenched focusing on short-term tactical measures to ensure their immediate survival, whilst others looked to reposition themselves through acquisitions and disposals.
As the excitement of those deals fade and the 100-day integration activities are completed, companies are looking to the future and developing plans that will enable them to respond to the opportunities and threats that lie ahead and to leverage more value from what they already own.
Many companies now find themselves with an inefficient business model, for example, with decentralised operations where decisions and processes are duplicated at a business unit or country level, and with fragmented and costly back office support functions. This has inhibited their ability to realise the full value from their business or respond to challenges decisively and swiftly. This is frequently compounded by an overall disconnect between management structures, business information and processes, systems, legal and tax structures.
A key contributing factor in this malaise is clarity of business performance. Companies can struggle to transform their strategies into actionable metrics as they end up grappling with either a lack of insightful information or in some cases information overload. Senior management often find they lack information they can trust at the right levels within the organisation not only to make quick and effective decisions required in the volatile market conditions, but also just for good governance.
We have found that more companies are seeking support and help to tackle the challenges regarding poorly structured master data and re-designing fragmented processes which have led to a lack of visibility and unrealised value. Even those businesses that did invest millions in a new single Enterprise Resource Planning (ERP) system have found that whilst this has helped them roll out standard processes across their multiple locations and entities, it has not necessarily given them the management information with the insight they need to run the business.
In an environment where growth is expected to be slow for some time, businesses wanting to stay ahead will rapidly need to look at all options to become as efficient and effective as possible. To be successful requires a strong approach to defining what needs to change and why including managing the change in processes, technology, people and infrastructure. Robust, timely management information will be essential to meet these requirements and drive the business forward.
:: For more information contact Adrian O’Shea, Director of Regional Consulting on tel: 0191 269 4288 or email: Adrian.email@example.com