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When the going gets tough, the tough stick to their IT strategy

June 25, 2009 • Features

Many companies tend to panic in an economic downturn, pushing cost cutting straight to the top of the agenda. A box which is very likely to receive a tick when the bosses sit down to trim the fat is the IT department. But is it a good idea to cut chunks out of an IT strategy during a difficult economy? Ivan Epstein, CEO, Softline, doesn’t necessarily think so. He believes good spending in tough times does exist.

Business efficiency is an important consideration in a difficult economic climate, but it is often pushed aside as cost cutting needs to take priority, Epstein says. Generating income is the fundamental requirement of any business, and managers can cut costs as much as they like, but without effective sales and marketing activities, the business is treading on thin ice. Those that realise this will also know that their sales and marketing divisions are reliant on information and communication and, as such, will continue to benefit from the effective use of systems.

“In many companies the boss will recently have decided to carry on as usual because money is tight, so those much-anticipated software upgrades staff have been hinting for have not arrived – and aren’t likely to in the near future. I understand this view; times are indeed tougher. However, the reality is that times could get a lot tougher if you’re missing opportunities and losing staff.”

Technology allows businesses, of all sizes, to operate efficiently and assist in driving revenue growth. However, it may put a strain on finances as managers find themselves having to consider replacing obsolete technology faster than expected. SMEs in particular need to see that every cent they’re putting towards IT is delivering some value. And while it may not seem like anything needs fixing, businesses should be very mindful of totally stifling their requirements.

Epstein offers this advice to those in an upgrade or replace dilemma:

  • Understand which technology investments help to increase productivity and better assist in serving clients.
  • Continue to fund strategic technologies if possible during an economic downturn.
  • Your target markets will also be feeling the recession so you need to make sure their relationship with your company continues by providing efficient, affordable, and high-level products and services.
  • Shelve non-critical upgrades until the economy picks up.
  • Try not cut back on your line-of-business applications. This means continuing to support technologies such as time and billing software and assists in your business efficiencies.

“It shouldn’t just be all about cutting costs during an economic downswing, but more about controlling costs,” Epstein concludes.

Ivan Epstein,

CEO, Softline

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