Economic news, for the most part, has been dismal in 2001. The stock market, especially in the information technology (IT) sector, has remained down. Investors are wary. Technology companies continue to miss earnings forecasts as overcapacity creates continued downward pricing pressure, and new sales are hard to come by. Business spending has decreased and, in some sectors, dropped off dramatically. In July 2001, Gartner reported a steady growth in IT spending, despite news to the contrary in equity analyst reports and daily newspapers everywhere. One could argue that people answered the Gartner survey based on IT budgets that were "set" last year, rather than on the realities of paying the company's bills each month. Nonetheless, questions are bandied about in the press as to whether the U.S. economy has "bottomed out," whether we're in a position for recession or rebound, and whether IT spending will increase or decrease. I'm not an economist, so you won't find me predicting a turnaround! However, many others will cover the subject. Time will tell.
Anecdotal evidence would suggest that most companies are feeling a lot of pain. Company cutbacks continue in the quest to reduce expenses. Cutbacks take the form of layoffs as well as reductions in spending for equipment and software. Companies are concerned with cost savings; in fact, they are almost obsessed with obtaining near-term bottom-line benefits through cost cutting. Projects that don't directly impact near-term profits are being stopped or put on the back burner. There is little or no available money for strategic projects or those with a longer-term payback. It's, "Pay me now I'll worry later about those projects where the benefits fall into the 'soft' category." The fear is that stockholder value will suffer if expenses are even marginally above what it takes to maintain the status quo. Maybe next year we can attempt some of those projects.
To many, it is all gloom and doom. We cannot see a time when plans may be more strategically focused. However, consider the idea that in this economic downturn, there may be an ability for companies that have the fortitude to benefit by focusing on what's needed to achieve success. This may be a time for tough decisions. It may be a great time to spend some money to achieve something that other companies are afraid to pursue. It is guaranteed to be tough to stop those projects that your company has in the pipeline which have questionable value- add potential, and it's even tougher to continue that customer relationship management (CRM) project that has more elusive (but potentially greater) benefits.
Think about those CRM or business intelligence (BI) projects that have the potential to create long-term benefits, even competitive advantage. Isn't now the time to commit to them? We all need to act on collected information (we know there is much collected information!) to improve results and lower costs. Efforts to personalize information, especially offers, are well-placed because most consumers indicate they don't mind being solicited if the solicitation is pertinent to their needs. Customers want the ability to serve themselves; therefore, projects involving customer self- service can actually answer customer needs and cut costs as well. Moving customer service to a less expensive channel can contribute significantly to the bottom line. Real-time clickstream analysis has proven to be extremely valuable to the few companies brave enough to attempt it.
It's not going to be easy. It means bucking the current thinking, going out on a limb and seeking executive commitment to a project where the benefits may not manifest themselves on the bottom line in the next three months. It means convincing business leaders that pursuing a strategic CRM or BI project is the right thing to do, that the company will be better in the long run, that more satisfied customers will translate over time into hard-dollar benefits. The pain in initiating or continuing a CRM or BI project can be greater than the pain of stopping or not starting a project. Your pain may be personal as well as professional.
We would all be well- advised to remember the old saying, "No pain, no gain." No guts, no glory. Those who are unwilling to take a risk and attempt the strategic CRM or BI project will not achieve the gain and glory to be expected from those who do. When corporate efforts are directed toward saving money at all costs, it's difficult to buck the trend and suggest one that has the potential to significantly change (for the better) how customers view the company, as well as improve the company's bottom line longer term. CRM and BI can lead to competitive advantage whether the economy is good or bad. In fact, that project could be a company's saving grace. Having the guts to believe that fact may mean the difference between a company being a mediocre "also-ran" and having the glory associated with being a long-term leader. Which do you want to be?
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