Thriving in a downturn
No one really knows whether or when the current economic slide will turn around. My own view is that this is an inflection point, a serious break from the past, a wake-up call from old illusions.
For well-managed companies, this downturn offers the chance to re-examine fundamental value propositions and develop new strategies. Here are seven key strategies not just to survive, but to thrive, in the current business environment:
1. Upgrade human capital: Look around your organisation. Who is rising to the current challenges? Look for leaders and support them.
2. Conserve cash: Reduce and restructure debt, preserve cash.
3. Invest in innovation: Re-direct your best people to innovation projects. Move early to anticipate emerging needs.
4. Acquire innovative start-ups: Look for attractive sources of future growth. Do NOT acquire ailing competitors just to consolidate.
5. Focus on customers: Double the amount of communication with existing good customers. Do not acquire your competitors’ cast-offs. Rebalance your customer portfolio.
6. Do not stop advertising: Sign longer-term contracts with good media that is anxious to serve winners. Refine your advertising bang-for-the-buck, specifically with performance-based pricing.
7. Do not cut prices: Do not try to match low-cost competitors - they will eliminate themselves. Work your sales relationships to keep price-conscious customers loyal.
Developing a positive mindset is crucial. It is important to keep asking, 'What is the opportunity?' as opposed to, 'How am I going to survive?' If you keep your eyes focused on opportunity, you can see it and create it. Remain agile; be poised to grow. You can not only ride out shaky economic times, but emerge stronger and more successful.
For positive individuals at levels below top management, I have simple advice: Do not wait to be riffed, laid-off or whatever the expression. Look for good, complementary partners, and start your own company. This is a GOOD time to DO something different.
Software as a service – cloud computing
Over a decade ago 'The network is the Computer' was Sun Microsystems’ slogan. Now the concept is emerging with a new wave of explosive growth.
Cloud computing is the metaphor for the complex infrastructure available as a service via the Internet. Software as a service (SaaS, pronounced 'sass') typically delivers applications through the browser. This could be just one application (Salesforce.com is by far the best-known example among enterprise applications) but that is being extended to several desktop applications, and SaaS is also becoming common for HR and ERP and others.
Utility computing is a form of cloud computing, already available from Amazon.com, Sun, IBM, Google, Yahoo and others. The original offerings were storage and virtual servers on demand. But now, they are replacing complete data-centres, enabling users to stitch together memory, I/O, storage, and computational capacity as virtualised resource pools available over the Internet.
In the ‘old’ days, huge hunks of software were installed on individual computers as though they were isolated lumps of hardware. ‘End User License Agreements’ (EULA) required users to have a fully paid licence per computer. Installation processes, plus regular updates and bug-fixes, were a pain. How many terabytes of packaged software remain dormant on how many computers?
SaaS applications are licensed for use on demand, removing the cost and burden of installed software on every computer. This greatly reduces the ongoing maintenance required for conventional ‘full’ installations, and facilitates central control of all updates and upgrades.
SaaS shifts the burden of installation and keeping an application up-and-running from the user to the supplier. Users can leverage rapidly with very little support. Customers benefit from the vendor’s latest technological features, without the disruptions and costs associated with software updates and upgrades.
SaaS-delivered software enables end-users to deploy more quickly at a much lower cost – typically two to four times better than fully installed EULA alternatives.
SaaS and cloud-computing are being adopted by many small and large enterprises, including General Electric, and Procter & Gamble. SaaS is here, and it is the wave of the future.
Jim Pinto is an industry analyst and commentator, writer, technology futurist and angel investor. His popular e-mail newsletter, JimPinto.com eNews, is widely read (with direct circulation of about 7000 and web-readership of two to three times that number). His areas of interest are technology futures, marketing and business strategies for a fast-changing environment, and industrial automation with a slant towards technology trends.
© Technews Publishing (Pty) Ltd | All Rights Reserved
printer friendly version