Surviving this recession has become the number-one topic across the board. The headlines of jobs being cut and companies shutting their doors are no light matter. We are all taking long, hard and sharply pessimistic outlooks on our business decisions these days.
But what if we skew our perspective just a bit and look at these challenges as an opportunity to do better with what we may have let slack in the last few years? Could it make a difference in the outcome?
Historically, recessions have been times of change. The winners have been those companies which shifted the paradigm and took up the chance to improve their market shares while their competition pulled in the reins and shut down all spending. So dare to be different: To succeed in a recession, you need a singular vision and the courage to make that vision a reality.
According to a recent McKinsey Report, organizations will do well to realize that “downturns give companies a chance to buck conventional wisdom and increase their IT investments. From our experience, targeted investments can generate efficiencies and revenue growth that surpass the savings from straight cost reductions.”
How do you help your organization improve its tech health?
Investigate the revenue streams. Take a good, solid look at what fuels them and what stalls them. Does the organization have technological bottlenecks in getting projects in the door? Do communications systems help or hinder sales talent? Staying connected with customers is more important than ever, because in this market, a customer’s desire for cost containment may override their loyalty. Make sure to stay on top of customer communications. It is in the turnaround speed, not only of the communications systems an organization is using, but of the communications system that its customers prefer. Pay attention to how your customers are contacting you. Make it as easy to do business as possible.
Consider revamping current technology. Is your technology (phone system, data network) being used to its ultimate utilization, or are you only using three of its nine applications? Many times we find new clients have systems and technology in place that could empower their goals, but simply don’t know how to utilize them correctly. Sometimes modifications or clean-ups are all that are needed, but system improvements make for vast cost savings and help pump up revenue generation.
Get more “bang for your buck.” Are your employees slowed down by manual processes, or processes that haven’t changed with the technology available? Is their work hindered by sluggish computers or servers? Are you hearing frustrations that they have lost work due to systems going down or locking up? Those moments are costing you more in lost revenue than what the investment in upgrading could be.
If your current technology is a detriment to your revenue, do NOT run out and replace it through a capital purchase. Technology is the last place a company should put its capital. Why? Because it changes too rapidly to be a good investment, and companies often do not fully fathom the total cost of ownership.
Understand that when you purchase technology, your investment does not end with your checkout receipt. In fact, according to a study by Wilkofsky, Gruen and Associates, the amount of acquisition ends up being less than half of your total cost. Make sure you are factoring software upgrades, training, add-ons, insurance and maintenance into your costs. Those far outweigh your initial purchase price.
Keep your capital purchases for those which will last and pay your organization back. Strengthening company image and brand identity, keeping the lights on, fueling critical business revenue-generating activities, retaining top talent and fulfilling customers’ needs are where organizational capital should be focused during these times. Put the money where you are going to make money.
Look only into technologies which will help to:
- Create a new business model and tap latent business opportunities
- Help to reach new markets and create stronger relationships
- Address the need for efficiency and innovation.
Seek out managed service offerings. Managed services will be the lifesaver when it comes to this recession. They offer the opportunity to address technology needs without exposing the company to the risks and responsibilities of capital purchases. Issues of upgrades, training, add-ons, insurance and maintenance become the focus of the provider, leaving your organization the ability to focus on your key business—revenue generation. Managed services also keep your capital focused by turning large expenditures into manageable fixed line-item expenses. They can be applied to every aspect of technology, from communications systems to IT infrastructure, and cover as much or as little as an organization needs to keep healthy and thriving.
As mentioned above, standard managed service plans include maintenance and upkeep costs. These programs also relieve the workload of your current IT and operations staff, allowing them to focus and complete projects relating wholly to your core business. One of the most positive aspects of utilizing managed services for technology purchases is that you are not stuck with machinery that will be obsolete sooner rather than later. The exceptionally good managed service plan will include some type of refresh program, allowing you to update your systems at little to no change in monthly cost. One word of caution, though: seek managed service offerings from technology professionals who keep the whole of your business as their focus. Choosing those partnerships wisely will be critical to your success.
I think Sam Palminsano, chairman and CEO of IBM, said it best in the November 22nd edition of The Economist: “Win, not by surviving the storm, but by changing the game.” iBi