MT Expert: IT - Technology in the recession

Auridian's Ade McCormack on how investing in IT can help you thrive in a volatile market...

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Last Updated: 31 Aug 2010

The markets are volatile and very few organisations are operating in a ‘business as usual' mode. Many are focusing on survival, but a few are focusing on growth. The former are endeavouring to run a scaled down version of their existing business model; their focus being to ‘bring costs into line with revenues'. The latter are either fortunate enough to have an offering that benefits from a downturn or are simply immune, or have changed their business to reflect the new opportunities that a down market offers.

A question to ask is whether we are experiencing a recession or whether this is the ‘new normal'? A new normal brought about by globalisation. I think that there is at least an element of this at play.

If so then endeavouring to maintain a scaled-down business-as-normal approach will be unsustainable. A better approach would be to have a more flexible business model that adapts to the volatility of the market.

Business agility requires investment in new technologies. Does your IT infrastructure enable you to morph your business model? If not then now is the time to invest in IT. This would appear counter-intuitive - most organisations have taken a scythe to their IT budget.

In a global market, competing against more nimble players will require a high degree of business process automation. However, if your IT infrastructure is poorly designed, with high interdependencies between the applications, then it will be difficult to swap them in and out as your business model changes.

A more agile business requires an agile technology infrastructure. This requires investment. Some would argue that the move towards software as a service makes the technology infrastructure the supplier's problem. And that is true if only one vendor provides all your applications. However this is a dangerous move, putting your eggs in one basket, so to speak. I would advocate a best of breed approach and this requires consideration of how these applications will interoperate. Ultimately you need to have an enterprise information model that ensures the data provided by your disparate applications provides a coherent picture of your business as a whole.

What I am prescribing may sound inconvenient and even expensive. Perhaps simply pressing your IT function to cut their budget is simply an easier management decision to make?

But if you do make the investment then you will be well placed for the upturn and better still be well placed for any market movement. Knowing that your technology infrastructure will support your advances into new markets rather than obstruct them will ultimately increase the chances of your business thriving whether the market is up or down.

Ade McCormack is an author, speker and advisor to business leaders and CIOs. Visit his blog at www.auridian.com.

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