Seeking Answers in a Down Economy
Although the long-term goal of successful businesses is to maintain a positive trajectory over the long-term (through increased revenues, market share and profitability), sometimes macro-economic forces require a downward sloping trajectory in the short-term – cost-cutting, layoffs, and other measures in an effort to “do more with less”. A thorough analysis of your business in a down economy is in many ways more important than in a robust economy,not only to see your way through the down cycle but to position your business for success as the economy begins to recover. Successful firms find ways to invest in their businesses in a down-cycle, whether through more effective sales and marketing, business process re-engineering, or taking the initiative in investing in new opportunities, technologies or ideas whose adoption is likely to be accelerated by a recession.
An example of the latter is the move to managed or hosted IT services (aka “cloud computing” or “software-as-a-service”). Currently, companies are postponing or canceling outright large IT initiatives due to budget concerns or cutbacks in staff. Traditional IT projects involve significant up-front licensing and services costs for new technologies that also require a significant investment in staff training and new hires to manage the systems going forward. Managed or hosted solutions allow a company to contract with third parties to either manage or host their IT solutions, usually at significantly less up-front implementation costs and with a fixed monthly or annual expense. Additional benefits of these services include seamless updates and upgrades and the ability to cancel the services more easily if they are not meeting the business objectives. The current recession will drive more companies to adopt these technologies and solutions faster as a way to streamline operations at a known, more manageable cost in order to drive productivity and efficiency.
