Making good investments is as important as it ever has been. Times of economic contraction demand investments that reduce costs, improve productivity, and enhance relationships with customers. In addition to the drag of slow or negative growth in the market as a whole, businesses that abstain or are unable to make these investments will also suffer loss of market share.
Reducing costs by consolidating redundant systems is a good investment. Redundant systems spring up in times of rapid growth, when increasing capacity to satisfy an expanding market dominates other considerations. Now is the time to reel-in those redundant deployments and reduce indirect cost per unit of output. Consolidate before market growth returns, because once market growth returns, the focus will again be on expanding capacity and there won’t be time to consolidate.
Improving productivity is a good investment. As experience accumulates and technologies evolve, opportunities arise to do things more efficiently. Now is the time to harvest the benefits of experience and technology developed while markets were growing. Increase productivity now, before market growth returns, because once market growth returns, the accelerating pace of business will make it more difficult to adopt productivity enhancing practices.
Improving relationships with customers is a good investment. If customers are spending less, it’s all the more reason to retain existing customers and attract new ones. If the competition is in disarray resulting from changing financial circumstance, now is the time to strengthen customer relationships. Traditional “pounding the pavement” approaches to customer acquisition have been outpaced by web and e-marketing approaches. Don’t wait for the competition to regain its footing. Work quickly to strengthen the loyalty of existing customers and reach out to new customers via web and e-marketing.
For each of the good investments, one question that remains is how to get most benefit per dollar of investment. For more information on the use of information technology to get the best return, visit the resources below.
- The use of extract, transform, and load technology for consolidation is in “The Critical Role of Extract Transform and Load Solutions for Enterprise Content Management”
- Further perspective on business process management and the related productivity gains is in Mark Travers’ KM World article, "Business Process Management: A Strategic Imperative for a Down Economy"
- A web and e-Marketing approach to strengthening customer relationships is outlines in my previous blog post, "The Foundation for WAM Solutions: Speed and More..."
Consolidation, productivity, and customer relationships are all good investments and should be pursued urgently during this phase of the economic cycle. Any one of these good investments gets even better to the extent that multiple objectives are addressed with one initiative. There are many ways that these investments can be made to address cost reduction, productivity enhancement, and customer relationships all at once. My colleagues and I at Crown are eager to identify and realize exactly those investments with you. That's making a good investment great.
