Top five challenges faced by execs in the region – Bain

Executives and managers in the Middle East say increased business complexity and cyber-attacks are among the biggest challenges they face at present, according to a new survey conducted by consultancy Bain & Company.

The survey on management tools and trends found that three-quarters of executives in Europe, the Middle East and Africa feel their firm’s financial performance is strong.

But they also cited a number of challenges –

Increasing complexity: Nearly 70 per cent of EMEA executives surveyed said that increasing business complexity will contribute to higher costs that will hinder company growth.

Cyber-attacks: The threat of cyber-attack was specifically of concern in the healthcare and financial services sectors, which collect and utilise sensitive customer data that can be attractive to cybercriminals.

Nearly half of executives were “very concerned,” the same as in 2013, the survey found.

IT spending: Over half – 56 per cent – of EMEA executives believe that IT spending must increase over the next three years to keep up with the rapid pace of change and to remain competitive. Up to 40 per cent also opined that current IT infrastructure, which is often burdened with legacy systems, restrains growth.

Customer loyalty: Two-thirds of the respondents said that customers were less loyal to brands than they used to be.

Growth strategy: Nearly two-thirds of executives in the EMEA region said that mergers and acquisitions will be a critical growth strategy in their industry.

Principal in Bain & Company’s Middle East office Joe Rahi 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.

“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 added.

Going ahead about 45 per cent of EMEA executives surveyed said that over the next three years they will focus more on revenue growth than cost cutting.

This may be one reason for the increasing popularity of tools such as big data analytics, which can help companies more effectively segment and target customers, said the report.

“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,” stated Rahi.