The following is a guest blog by Chris Webber, Senior Editor of the Economist Intelligence Unit. He conducted a research study on the role of technology in making business decisions and presented his findings during a session at Progress Revolution Boston 2011.
By: Chris Webber, Senior Editor of the Economist Intelligence Unit
After all, the pace of change businesses are encountering appears to have picked up significantly in the years since de Geus's research was published. New technologies, more competition, the growth of emerging economies and an explosion in the amount of information being generated are all contributing to an increasingly complex economic system. In a new survey, which has been sponsored by Progress Software, the Economist Intelligence Unit has been analyzing the impact of this increase in complexity on corporate decision making.
Unsurprisingly, three quarters of the 490 businesses surveyed think that the pace of change in their operating environment has picked up over the past five years. Added to this, nearly 80% think it's important to respond quickly to the changes that are taking place around them. Again, that's no big surprise given that failure to respond quickly to change implies missing out on growth opportunities or undermining existing sources of competitiveness.
What does seem counter intuitive, however, is that only about a fifth (22%) of those surveyed think their organisation's managed to increase the speed at which it makes decisions over the past five years. In fact, many more say the exact opposite is true, with nearly half (48%) saying the amount of time taken to make key decisions has increased.
Of course, this raises the intriguing question of why businesses are taking longer to make decisions. Reflecting on that puzzle over the past month, one of the key points I've kept returning to is that more information and analysis doesn't necessarily mean less uncertainty for businesses. On the contrary, increasing complexity and interdependence in our economic system could easily mean that businesses are facing more uncertainty than ever before, and that might well explain why executives are taking longer to make decisions than they would like.
This is an important point. With all the data and analytical tools at our disposal in a modern economy there's a temptation to think that we're capable of fully understanding the complexities of the present and that we have a clearer picture of what the future holds.
To some extent those two points might be true. For instance, there are plenty of examples of administrative functions that have been demystified and systematized over the past couple of decades with impressive results for performance.
Judging by our survey results, however, the majority of executives are still plagued by uncertainty and are struggling to make decisions as quickly as they would like. Technology has clearly come a long way and is improving rapidly, but levels of complexity and uncertainty seem to be increasing even more quickly. Technology providers will need to up their game if they really want to help their customers through this set of challenges