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Rahi ... principal, Bain & Company’s Middle East office

GCC firms lean on management tools to advance growth

DUBAI, July 13, 2015

A majority of executives in Gulf Cooperation Council (GCC) companies are leaning heavily on management tools to advance their longer-term growth strategies, according to a survey.

Bain & Company’s ‘Management Tools and Trends’ 2015 survey, found that nearly half of the firms surveyed said they are looking for new tools to tackle pressing management challenges, such as increase business complexity, cyber-attacks and waning customer loyalty.

Joe Rahi, principal in the firm’s Middle East officer, said: “Our survey findings are consistent with what we have been hearing in GCC boardrooms.  Executives and directors are cautiously optimistic about the economic outlook in their industries given the latest downward trend in the oil prices, and they are looking to management tools to help grow their business coming out of the downturn.”

While three-quarters of executives in Europe, the Middle East and Africa (EMEA) felt their firm’s financial performance is strong, they cited increased complexity, the threat of cyber-attack, increased IT spending demands and the erosion of customer loyalty as front-burner challenges, said the survey.

Nearly 70 per cent of EMEA executives surveyed believed that increasing complexity will contribute to higher costs that will hinder company growth, while the threat of cyber-attack remained a legitimate concern in EMEA and in the healthcare and financial Services sectors, which collect and utilise sensitive customer data that can be attractive to cyber-criminals.  

About 56 per cent of EMEA executives believed that over the next three years IT spending must increase to keep up with the rapid pace of change and to remain competitive; and 40 per cent felt that current IT infrastructure, which is often burdened with legacy systems, also restrain growth – on par with North America and Latin America, but less concerned than Asia Pacific (57 per cent).

The executives continued to be concerned with customers’ declining brand loyalty, while two-thirds believed that mergers and acquisitions will be a critical growth strategy in their industry.

The survey found that companies deploy a wide and ever-shifting array of management tools to address business challenges and capture business opportunities. However, different segments weight the use and satisfaction of various tools largely based on company size, scope of effort and geography.

Larger companies in EMEA use the greatest number of tools.  Executives also expressed more satisfaction when using tools for major efforts, such as full scale transformations, than programs more limited in scope, it said.

In EMEA, Disruptive Innovation Labs, customer segmentation, strategic planning and employee engagement surveys received the highest satisfaction scores; outsourcing in EMEA was the lowest score across all tools.

Among tool usage across EMEA, customer relationship management, benchmarking, outsourcing and Balanced Scorecard were rated highest; zero-based budgeting and Disruptive Innovation Labs were used least, said the survey.

EMEA executives were slightly more satisfied with the majority of tools than their North American counterparts, but less satisfied than Asia-Pacific executives, suggesting less of a focus in many of Europe’s developed markets on driving aggressive company growth, compared to those in Asia’s emerging markets, it said.

Complexity Management was not a highly used tool even though increasing complexity was identified as one of most pressing business challenges in EMEA, with established market firms continuing to lean toward using more traditional tools such as Benchmarking and Employee Engagement Surveys.

The emerging market firms have been early champions of new tools such as Big Data Analytics, Digital Transformation and Disruptive Innovation Labs, it said.

“With the exception of some sectors, financial performance is currently perceived as improving albeit with some challenges: insufficient insight into consumer needs is still hampering growth in some industries,” said Rahi.

“Meanwhile excessive and growing complexity still affects costs. Adaptability to continuous changes in the business environment will be a key differentiator for sustained value creators, and investment in innovation will drive long-term superior economics,” he said.

The survey also found that the popularity and usage of specific management tools changes over time. Certain tools such as customer relationship management and benchmarking demonstrate consistent staying power in Europe, the Middle East and Africa (EMEA).  

The data, however, showed that others, such as Total Quality Management, are used far less today than they were 20 years ago, suggesting that some tools, follow life cycles similar to many consumer products, it added. - TradeArabia News Service

Tags: Survey | executive | EMEA | trend | tools |

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