90% Cos Suffer Due To Unplanned Growth: Study

by CXOtoday News Desk    Mar 16, 2016

unplanned

According to a new research nine out of 10 organizations across the globe were left exposed to significant business dangers in 2015, due to the impact of unplanned growth that happened as a result of a growth surge. The global research, conducted by MORAR Consulting and commissioned by Epicor, outlines the potential pitfalls of business growth, when it is unplanned, by questioning over 1,800 business leaders from 12 countries across the globe, including India.

At the global level, the study found of those surveyed globally, 58 percent of businesses reported growth in 2015 and nearly 70 percent expect to grow in 2016, however only 11 percent experienced growth totally in line with their plans in 2015.

Of the Indian businesses surveyed, 77 percent reported growth in 2015, while 84 percent expect to grow in 2016, however only 20 percent experienced growth totally in line with their plans in 2015.

The business leaders surveyed, specifically in India, admitted they often fear the consequences of growth, citing a number of negative impacts when growth is not planned for effectively. More than half, 63 percent said they worry that business growth puts excessive pressure on operations, damaging quality and customer satisfaction. More than half the businesses (52%) were also concerned that their business IT systems may prove unable to cope with managing a larger, more complex, business model. The top concerns cited by CEOs were the lack of visibility into business operations by management, loss of focus on product direction, disruption of work culture, followed by the perceived loss of customer intimacy that may come about as a result of growth, said the study.

Growth also poses a number of concerns about resource availability as business activities scale. Sixty six percent of business leaders said that as a result of growth, they worry that their business might take on large or complex projects that they lack the skillset and technology to deliver effectively, damaging their brand reputation. They were also concerned that by growing the business, workloads may increase to a level that places too much pressure on staff, prompting key personnel to leave the organisation (59%). 

More than half (60%) of business leaders polled worry they are not personally prepared for the challenges of managing a larger, more diverse business.

Globally, significant levels of unplanned growth were more likely to be experienced by mid-sized businesses with 100-999 employees (37%), than larger enterprises with over 1,000 employees (29%).  Unplanned growth can bring challenges and pitfalls which nearly three quarters of businesses agreed are of at least some concern to them. Growth was most likely to be described as painful (in as many as one in ten cases) by smaller mid-sized businesses (100-249 staff) as they make the difficult transition from small to mid-sized enterprise.

In the light of this it is not surprising that business leaders in India found growth to be difficult as well as rewarding, suggesting businesses in India need to prepare for growth more effectively.  More than half (59%) admitted that they found growth challenging in 2015.

To support business growth, and prepare for its challenges better, 83 percent of businesses believe that an effective and integrated IT infrastructure is essential. “This adoption of new technologies should position organisations to reap the benefits of newfound efficiencies and pave the way for growth,” said Malcolm Fox, vice president, product marketing, Epicor.

“Although the majority of businesses intend to grow in 2016, it’s clear that there are significant concerns with regards to businesses ability to deal with growth,” said Fox. “These concerns are not altogether unfounded, as our research shows even when businesses plan to grow, this growth can still surprise them; putting unexpected pressures on the organization. The proper time to prepare for growth surges is well in advance, as having an information framework to enable an organization to respond and keep pace in the face of growth has never been more vital.”