Classic Indicators of Business & Organizational Complexity

The major culprit leading to business complexity in most of the contemporary business organizations is absence of coherence among the business processes.

The lack of alignment between Business Functions, their goals, objectives with that of business adds fule into the business complexity issue.Even if there is a common goal, there remains a large disconnect between that goal and the specific actions taken by specific functions at specific points in the process.There are many such indicators of Business & Process Complexity which are described below:

No one has a complete bigger picture of what each group in the organization does. The mistake done by many of the process owners is just adding more resources which often resulting in even more activity and more complexity. It can reach to the chaotic point where no one will have a complete understanding on how all the individual pieces fit together in giving a bigger picture so that the organization will be able to achieve its objectives. No one can see all of the complexity present in the business processes due to the reason they are not being coherent, and when that happens, complexity can easily multiply without giving any visible indicators.

Decisions that should take days started taking weeks,months and information started flowing slowly through multiple organizational layers and silos in the organization. This delay is caused as the result of overly complex organization structure.Because of the gap between decision and actions. Overhead costs include areas that are nobody’s responsibility; simple decisions are deferred. And the net result is long and winding information flows and decision making.

Seeing or managing trade-offs that cross functional boundaries. Numerous functional and decision-making silos make it difficult to see, much less managed. The organization becomes a composite of individual parts, each operating from its own view. Without a centralized controls, issues that span across boundaries are often not recognized and are sometimes ignored. The organization suffers from
unintended consequences and out-of-balance trade-offs.

There is lots of activities happening but not much outcome (e.g., time to market is being excessive, it takes more and more resources to get the same things done, accountability is blurry, and decision rights are unclear).Process/Organization interactions create many invisible activity traps. People are overloaded with “work.” But there is no line of sight to what really matters, no mechanism for evaluating the value of that work against business and customer priorities. And as more and more people do more and more things, work that really matters takes longer to get done (because less important work is clogging the highways). Focus shifts to how much people are doing or how many projects are being worked,rather than what impact is being achieved. Given how difficult it can be to drive projects to closure in this environment, managers are reluctant to stop any initiatives. Rather, they mistakenly take the shotgun approach:the best way to get something done is to do many things. There is no means for prioritization. The volume of activity can begin to grow on itself as more work is needed to manage more and more activity—“fake” work abounds.

Poor customer service levels (the organization is not aligned around satisfying the customer, or processes are so cumbersome that the organization cannot execute them). Numerous handoffs,excessive queues, and work-around loops disrupt process flow significantly lengthening lead times and limiting responsiveness. Often,the burden for process and organizational complexity is inadvertently
shifted to the customer, with poor results for both the customer and the company (for example, consider poor customer service experiences where customers are left to navigate through a complex and frustrating organization, or health insurance application processes where the customer must provide the same information many times).

Poor product availability arises as a result of poor supply chain coordination.Because of poor coordination across supply chain participants,the supply chain struggles with getting the right product in the right place at the right time. It may be able to deliver when things are working well, but when conditions change (in the level or pattern of demand or supply, for instance) it is slow or unable to react. Because the processes and the organizational structures that support them are treated as individual pieces rather than an integrated whole, it is a struggle to balance work across the value chain and achieve high levels of execution.

Poorly implemented or complex use of IT systems weighs down processes and significantly impedes decision making. IT systems are sometimes viewed as the silver bullet to process and organizational complexity. But while IT systems can help well-run organizations operate better, they seldom turn a poor operation around. Rather, poor processes become hardcoded into the IT systems, which just adds to the complexity of an operation.

Organizations should take appropriate corrective & preventive actions in a timely manner to address corporate disasters by looking into the above seen Business & Process Complexity Indicators in a timely manner.

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