The change journey

No company is immune from economic shifts, but impacts can be lessened

No company is immune from economic shifts. It's been a big talking point over the past few months; concerns about economic conditions and their impact on IT budgets have led some leading analysts to predict downturns in the purchasing of computers, software, and services.

At the same time productivity in the economy has grown and there is a growing consensus among our economists and business leaders that this increase has been directly linked to IT investment! Nevertheless, IT executives are under pressure to prove and measure the worth of their departments while the naysayers will continue to challenge the costs and returns associated with IT.

On the other hand if the IT organisation is not operationally productive and operationally superb, all the bets are off and the IT leadership gets decapitated or outsourced or both. In this brave new world some might see it as the beginning of economic recovery where the ICT industry must face new marketplace challenges as it attempts to regain previous momentum.

According to Gartner, the current slowdown will accelerate the offshoring of IT services and clients will consider having an increasing portion of their labour in lower-cost locations. In the current taking-stock scenario, many companies could also hold back on capital investments to mitigate their risks. On-demand services on a pay-as-you-go basis are becoming more and more available for organisations seeking greater cost controls and flexibility at lower costs.

Established vendors that take a sudden change of tack or broaden their portfolios to take in new areas can also influence the rest of the market and cause other vendors to follow suit. Acquisitions, too, will influence markets as well as customer purchasing patterns. Suppliers to enterprises will need to prove their green credentials via an audited process to retain preferred supplier status. Vendors with strong brands are starting to forge a wave of green sourcing policies and initiatives.

Customers are the lifeblood in any economic climate, in a downturn they are what keeps one in business.

Time is critical; it is important to listen to clients to hear what they like and do not like about the services and/or the products you offer. Long-term deals can also add to vendors' security.

Alliances with closely-aligned products are always a good way to strengthen one's customer base; with the right alliance you can reach a broader spectrum of possible customers and you have more to offer each potential customer.

Certain segments will weather the current climate better than others. Most industry analysts and participants are viewing virtualisation, software investments, consulting, and unified communications not only as technology trends but also as business trends. The buyer focus will be strictly on business problems that matter and deliver real economic benefit.

Economic downturns are also scary times for employees. Companies often cut personnel and then add to the workload of the remaining staff. Employees need to be involved in any cost-cutting activities. If they are perceived as an active part of the solution they may be able to identify sources of savings and opportunities that never occurred before. One of the key reasons people react negatively to change is that they do not have all the information they need to support and implement it. Misinformation can fuel a grapevine that frequently can damage one's best efforts.

Len Rust is publisher of The Rust Report.

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