Byline: Adrian O'Shea
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. …