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Where To Invest In IT During The Recession

As the UK enters the worst economic downturn in many decades, all IT directors are rapidly evaluating how they can keep IT going with a tighter budget and lower operational risk. There are several areas of IT that are being reduced or shelved, such as hardware & software upgrades, application development & investments in infrastructure.

We see three key themes emerging as being critical during the recession:
- Business Intelligence deployment. Concentrate on developing a centralised structured data platform that provide the business with an accurate business decision making platform.
- Invest in CRM capabilities that enable your business to identify, develop and retain profitable clients.
- Offshoring IT Services: Undertake operational savings initiatives with a strong ROI within the financial year, but be cautious of the initiatives that impact long term business flexibility that may ultimately restrict options when the economy recovers.

Business Intelligence Solution
In such turbulent times, leadership teams are beginning to doubt the relevance of their historical data and question the excel sheets that are provided to them. Business leaders are demanding a rapid and accurate view of key metrics such as cost, profit, risk and impact, based upon improved, real-time data. When investing in a BI solution ensure the following principles are followed:


- Standardise data definitions to ensure company communicates in one language.
- Clearly define data collection processes that can meet the requirements for speed, accuracy and flexibility
- Select a well articulated & chosen data model to allow for flexibility on data collection & reporting
- Invest time up front to define reporting needs for the different stakeholders
- Retire redundant Access databases or Excel spreadsheets to drive adoption of the new platform
- Set up a steering committee that regularly reviews data quality, definitions and metrics

When a consolidated structured data set is integrated with flexible business intelligence tools, the business leaders can make decisions with the confidence and accuracy necessary during these trying times.

CRM
Many industry studies have estimated the cost of attracting new customers as being three to four times higher than retaining a current customer (Inside CRM Blog), so it is paramount to have the right processes, policies, and CRM guidelines in place. During difficult economic times brand loyalty can be shown the door as customers search for cheaper deals elsewhere. Your organisation should quickly establish the value of a customer and decide what it requires to keep them. Many organisations have evolved their IT systems through acquisition, non-central planning and firefighting, resulting in standalone systems with many hand-offs and manual workarounds - this seriously limits their capability to understand the customer requirements. A relatively cheap investment in an ASP-delivered system, such as Salesforce.com or SugarCRM, companies can bring a globally-accessible CRM system online in very short order. It is an opportunity for IT to provide a set of tools that Sales/Marketing can use on a daily basis to improve customer acquisition, client retention, identify new customer segments, and increase sales through up-selling & cross-selling.

Offshoring IT Services
Another opportunity for reducing costs which is more direct is to move IT support offshore. A slowing job market has helped offshore locations maintain, on average, 70% lower resource costs. Of course, when you consider the overhead of managing offshore teams and processes, the net savings will end up to 20 to 40% - still a significant saving for any organisation. Companies in an uncertain market may be scared of making mistakes, and offshoring still has the perception of being a risky business. Yet it is during times of crisis that organisations need to make radical changes to survive, which ultimately trumps the operational risks. Many of the offshore vendors will be able to drive consolidation, standardisation and eliminate duplicate platforms as they have been doing this type of work for Fortune 500 business for a decade, and the mid-market looks ready to gain from this expertise.

Organisations looking for where to invest next in IT will review their commodity platforms such as email, portal and communication technologies and look for options to increase variable costs to help liquidity. Whether it is part of a large consolidation or an opportunity to reduce the existing investment in commodity systems, new cloud hosting options offer a way to offload the support and maintenance costs of managing services in-house. The successful CIO will be the leader who manages to balance investments in project's that generate revenue and focusing on reducing costs elsewhere.

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