Many companies in many industries find themselves dealing with an over abundance of custom‐designed products, services and IT functions. Such complexity becomes unnecessary and value draining when companies fail to address the trade‐off between customization and complexity – between the costs associated with customization, the value derived from it, and the price that should be charged for it.
The authors show how to build an organization that routinely measures complexity and takes a continuous improvement approach to reducing it. This ensures that complexity is managed and customization that does not contribute to competitive advantage is eliminated.
Good complexity is necessary and adds value for the company and the customer. It is the kind required to customize products and services and help companies increase revenues, profits, and customer loyalty.
Ideally, the initial focus should be on identifying the complexity drivers across the organization and determining where modularization can reduce unnecessary complexity.
The company must obtain an in‐depth understanding of the tradeoffs between customization and complexity, and change its business processes and decision‐making to consider both internal challenges as well as its position in the marketplace. In the end, by weeding out the “bad” complexity, the company should see marked improvement in both its delivery capabilities and bottom‐line performance.
