According to a recent survey conducted by Frost & Sullivan and NetSuite among approximately 1,500 CEOs, CFOs and CIOs employed by European companies in a variety of industries, the following are the five most important challenges to international growth.
- Legal complexity
- Recruiting suitable employees
- IT issues
- Language issues
- Accounting issues
Statutory regulation and accounting high on the list
The greatest challenge is considered to be the complexity of statutory regulation, while accounting issues also figure among the top five concerns. According to the survey, one general trend is for companies to increasingly seek closer contact with their customers as a means of delivering greater value from their products and services. Many consider this to be the crucial factor for successfully competing and developing the business going forward.
Strategy for delivering customer value close to the customer
In order to succeed in this regard, the business must create a clear strategy for moving closer to its customers. Many small growth companies lack the necessary infrastructure and experience to drive international expansion. Large companies that have done this for many years have established procedures and IT solutions that manage many of the challenges described in the survey in the above diagram.
The IT organizations and finance departments in these companies have learned what is required, while smaller businesses that are embarking on a strategy of international growth, or planning to do so, need to raise their level of knowledge. They also need to invest in systems that can effectively handle international financial administration from day one. This means keeping costs manageable during any expansion.
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We have prepared a guide covering various scenarios describing how companies generally avoid problems with international financial administration, as well as the pros and cons of the various solutions. Read more.