Irrespective of what department you work for, IT (especially enterprise systems) is probably an important success factor. If you are worried about the market downturn, this actually may be an opportunity to improve your Enterprise IT ROI. Your organization is probably shackled by budgetary constraints but that does not mean that you cannot exploit the situation to your advantage.  Contrary to popular belief, simply cutting head count does not save a company much money (unless yours is one of those bloated organizations where people have no idea what/how they are contributing).  Why not take the opportunity to exploit the time freed up by production cutbacks to improve your process efficiency. Use the downtime to educate you workforce about your systems and processes. Kick off a re-engineering program and get the people involved in something that will lead to both process improvements and innovations.

Most organizations today have multiple enterprise applications such as ERP/CRM/WMS/SCM/ECM etc.  This applications landscape may or maynot be integrated.  Irrespective of integration issues, the people who use these systems are the ones who can drive the value offered by these applications. Sadly, these very users are often the weakest link in the value stream and most often due to no fault of theirs. Poor management practices lead to silos in organizations which runs contrary to the philosophy of having an integrated IT applications backbone. Lack of proper training and the absence of a forum to participate in process discussions compunds the problem. A market slowdown allows for the time which is often not available to be spent on learning projects.

Re-engineering processes is starkly different from continuous improvement programs. Even though they are all the rage, continuous improvement can fall into a rut of trying to continuously tinker with a process that has no potential for innovation. Try to use the free time to foster process innovation. Imagine that the group is starting with a blank slate and open up the forum to as wide a group as possible. See what ideas bubble up. You may as well end up with a radically different process that copes with future growth opportunities in a much better way.

Identify the growth plan that your company/department needs to support and build the solutions to support that. Often software enhancements are not well thought out and the final users hardly get to provide any inputs. This may be the time to take another look at the current and future solutions with a critical eye. Ensure that your business apps (ERP/ECM etc) enable these new processes and facilitate in contolling/managing the processes. Use this review to also create or supplement the documentation. If job-aids and tutorials are not available, take the time to put them in place. Setup online training processes and institue a continuous learning program. Ensure the learning program is relevant to your company’s business.

The organizations that take the time to shape up with overhauled process to meet market imperatives will be the ones that outperform their competitors. Growth is the product of innovation powered by market insight, combined with good processes. The lines of communication opened up by the above efforts will drive the innovation.

If you have some thoughts on the subject, feel free to share your opinion via a comment. We routinely help organizations with their Re-engineering efforts. If you would like to discuss this directly with us, please use the “contact us” link for our site.

The business climate is getting gloomier by the day. Expansion plans for most companies have been shelved as credit is getting harder to come by. The sudden frost in the credit markets though of grave concern, it is not what most companies are getting worried about. Companies are getting jittery about the climbing cost of doing business. As demand for products slows down, the spread between the net profits and the opportunity costs is shrinking. Companies loose value when they are unable to grow revenues and are unable to improve their profitability. What are companies to do in recession?

The answer to that question will depend on the industry you are in. However, in most cases, it is simply to continue improving your return on invested capital (ROIC) and gear for organic growth so that your are ready when the demand picks up again. There are several steps companies can take to improve their performance.

1) Get cash wise : Cash is king and the companies with strong cash flows and decent cash reserves will be in a very strong position to weather the downturn. This period can bring lucrative M&A options when a competing or supplementary business may be in need of a bailout. Focusing on cash flow will also identify all the major cash-drains in the company. Assess all major projects that are underway or in the pipeline for approval for their value in contributing to organic growth. Shorten the cash-to-cash cycle by working with your customers and suppliers.

2) Innovation : In the frenzy to conserve cash, do not stifle innovation. Make sure your R&D dollars are spent on programs to develop or extend products or services that your customers will appreciate. Support the effort to innovate because that is the most important factor for organic growth. Facilitate innovation by providing a organizational culture that eschews silos and promotes organization wide collaboration.

3) Supply Chain optimization : Ensure that your material and information flow is smooth and snag free. Having demand for you product is no good if you are not able to fulfill that demand. Keep a close eye on cost because that will ultimately make a difference in your cash flow.

4 ) Customer relationships : Know your customer. Be it your website, price structure or delivery performance, customers reward companies that are consistent and easy to transact with. As your customers evolve with their operating environment, so should your product offerings. This especially true in a downturn. Understanding what can help your customers in the current business environment can be the differentiator that enables a successful business to surge ahead of its competition.

5) Stock up on talent : People are the greatest asset for any business. Having the right people is key to the success of a business. Unfortunately the best people often move on if a company does not offer enough of a challenge or appreciation. A downturn is a ideal time to scout for talented people because a fair number of them loose their jobs due to market pressures. Take the time to evaluate your staff and supplement the team with the right people in order to support your growth.

All of points discussed above are things that most companies should be doing in their normal course of business. They simply take on added significance in a downturn.