Rely on IT to beat the credit crunch

With all eyes on the high profile losers in this worldwide economic crisis, the question on everyone’s lips is where did it all go wrong? Because in the answer to that question surely lies the blueprint for future prosperity. Would Woolworths, Whittard or Waterford Wedgewood have fared better with better customer insight, tighter cost control, a more ruthless market strategy? It’s debatable. With bolder innovation? It’s quite likely.

Meadows believes that surviving in this environment is about being brave and being on the attack. When businesses are under pressure either to drastically economise or to grow against all odds, it’s actually good news for IT. Because innovation is at the heart of reducing overheads and expanding revenues. And IT is at the heart of innovation.

Cost reduction and revenue expansion strategies both require technology advantage, and the kind of brilliant intelligence that is the absolute realm of IT. From IT’s unique vantage point as probably the only corporate function to engage with absolutely every other area of the organisation, there is no one better placed to guide the organisation to prosper in a difficult economic environment.

Innovate to reduce costs

Technology has a unique ability to unleash value if not revenue. The vast majority of systems are specifically designed for the very purpose of achieving efficiencies. Now is the time to drive through all the savings and efficiencies promised in a project or system’s business plan. It’s not time to dump unfinished systems: IT professionals need to focus more than ever on delivering projects on time, to budget, balancing flexibility and responsiveness with tight control and focus on the detail.

There are hundreds, if not thousands, of examples to show how innovative use of IT can significantly reduce costs. Use the web to reduce your cost of sale. Cut out the cost of business travel with internet telephony and teleconferencing. Increase internal cooperation and creativity with online collaboration and meeting tools. Find your own innovative ways of cutting costs through technology.

Innovate to release revenue

Surviving a recession doesn’t have to be purely about contraction, it can also be a great time to think about expansion. Investing in R&D at such a sensitive time requires a brave combination of trust and belief, but there are plenty of enduring examples of successful innovation to follow from the Great Depression in the 1930s.

During the last significant recession, American company DuPont boosted R&D spending and invented Nylon and Neoprene (which has become one of the twentieth century’s major innovations). Household names like Hewlett-Packard, Polaroid and Clairol began as entrepreneurial start ups (the rest is history). Sears prospered with developments like low-cost refrigerators and mail-order automobile insurance and by doubling the number of its stores. And at a time when Wall Street was despised, Merrill Lynch recognised that there was an opportunity for honest brokers.

In summary

The credit crunch doesn’t have to be all doom and gloom. Someone has to prosper and it could be you. According to McKinsey & Company deep downturns have the upside of destroying underperforming organisations, releasing capital from dying sectors into new industries and promoting the movement of highly skilled workers toward stronger employers.

As in times of war, recession involves hardship and fear and puts everyone to the test. But ultimately there will be those who come out stronger than ever before. And those who emerge from the battle victorious must be ready and poised for the next challenge...

Meadows’ checklist for innovation through IT

• Take a good look at yourself to see where the business/IT truly excels.
• Enjoy the unique vantage point IT has over the business and ask: where can we apply our skills to innovate and reduce overhead or add value?
• Seize the opportunity to change what you currently do, make a difference, play a different role.

This article was written on behalf of Trevor Meadows. To discuss ways of releasing innovation in your team or organisation please contact Trevor Meadows on 01647 221360.