Use a scalpel, not a machete, to chop corporate costs.
By Ross O. Storey
20 Jan 2009
Yes, the economic downturn, credit crunch, the financial fallout – whatever you like to call it - is prompting many major enterprises to take a much more conservative view of their information technology. But, necessity is the mother of invention, and from other industry research and feedback recently, it seems that so-called leading edge approaches, such as Web 2.0 and social networking, may actually enjoy an upsurge in these troubled times.
This year US human resources firm CedarCrestone, with the support of Oracle Corporation, did its very first Asia Pacific HR Systems Survey, which made some fascinating findings. The one that stood out for me stated that:
“Web 2.0 is at the innovator stage among APAC respondents, but early adopters worldwide are achieving early positive advantage of double the sales growth of those without these technologies.”
So, enterprises using Web 2.0 are doubling their sales growth. I bet that grabs the attention of any senior IT executive reading this. The mantra of cut costs, cut costs, cut costs, must be keeping them awake at night. If Web 2.0 could double their sales in today’s gloom and doom, I bet they would reconsider their apparent reluctance to ‘embrace new technologies’. The enterprise adoption of the web’s relatively new interactive persona, may be at the ‘innovative’ stage in the Asia Pacific, but, if the CedarCrestone research is to be believed, it seems a valuable way to go.
A comment that Egon Zehnder’s head of technology & communications practice, Asia Pacific, Nick Chia, made to me for the MIS Asia magazine IT recruitment Jan-Feb 2009 cover story, supported this.
Nick said that large corporations were now looking at ways to streamline their operations, and so much of that relates to IT, either relating to automation or in finding different ways of serving customers.
“For instance, some of our clients are using Web 2.0 tools to enable end users to help themselves, thus reducing the cost of supporting them,” he said.
It seems that implementing Web 2.0 systems can provide ‘self service’ features for customers, and when they are serving themselves, it means an enterprise has less pressure on its staff.
There’s no doubt that cost cutting is today’s priority, but as Accenture executives told me in a teleconference last week, the key to success is ‘sustainable’ cost cutting, that does not damage an enterprise’s core capabilities. Cuts should be done with a scalpel, not a machete, to ensure that it’s only fat – not muscle – that is being chopped. IT executives would be well advised to cut with care, or they could seriously harm their enterprise’s ability to compete when the economic pendulum swings towards the bull market.
Ross O. Storey, currently the Managing Editor of Fairfax Business Media Asia, is responsible for the editorial content and production of MIS Asia, CIO Asia, Computerworld Singapore and Computerworld Malaysia magazines.
