What do you do when complexity can’t be avoided?
Agile management teams need new technologies to support smarter and faster decision making, but capitalizing on opportunities to innovate with new technologies is difficult in today’s enterprise environment because of the overwhelming complexity created by generations of previous technology investments.
To confront the costs of complexity, organizations are approaching it in sophisticated new ways. When enterprises successfully manage that complexity, their appetite for innovation through technology investments will accelerate.
More than 75 percent of about 1,400 global CEOs surveyed by PricewaterhouseCoopers in 2006 said the level of complexity in their organization is higher than it was three years earlier. (See Figure 1.) Some level of complexity is an inevitable by-product of doing business today, so the challenge becomes how to keep complexity at a manageable level.
Figure 1: Primary focus areas for CEOs to reduce complexity
Source: PricewaterhouseCoopers survey of 1,400 global CEOs, 2006
What creates this complexity? Expansion into new territories, mergers and acquisitions, and the launch of new products and services have been the primary sources, according to these CEOs. Moreover, complexity creates such a drag on enterprise performance that nearly 80 percent of the CEOs said that reducing unnecessary complexity was a personal priority.
The CEOs’ primary focus areas were information technology (84 percent), organizational structure (79 percent), financial reporting and controls (69 percent), and customer sales and service (69 percent).
For many, it’s no surprise that the IT function is the highest-priority complexity challenge. First, IT echoes business because it is now integral to all business functions. As businesses and business processes have become complex, so has IT. Second, IT complexity occurs not only in the operations, but also in the architectures, applications, and data solutions deployed in the IT environment.
