What are the challenges that a company might face when applying flexible work arrangements?

Depends on the company's business. Company's that provide services such as technical support or IT works usually don't have the luxury of allowing flexible work hours since the hours chosen by employees could create gaps in which there won't be enough employees to cover for customers and must have fixed hourly schedules in order to be able to cover for all inquiries.

On the other side companies that deal with maintenance or after-sales (such as my previous employers) cannot in many cases control the location of work, since on-site repairs, maintenance and recovery are a daily routine. Which led to us being notified about our next location and the type of service required only the night before.

However. Other companies that do not have to deal with customers often or work on long contracts with deadlines (architecture, software programming, design) might find it easier to implement flexible work arrangement