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Peak Season (I)
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Peak Season (I)

Times of crisis are good times for IT efficiency programs



The economic crisis has arrived. Sales are declining, and customer orders are few and far between. While the German economy is ailing, restructurers, cost-reducers, and process re-engineers are enjoying a boom these days. Every company must think and save in full awareness of costs and increase internal efficiency.

All the talk going on during today‘s crisis has led to restored significance on a broad scale for the topic of IT cost optimization. There is every reason to believe that this development will only accelerate as the effects of the economic crisis become visible. The drivers behind this trend can be discerned in the weakening of the recovery which has already becoming apparent and the rise in unemployment, the relatively high prices, despite recent declines, for raw materials and energy, and the cost pressure from global competition which have long been tangible.´

These factors do not per se affect the so-called support or indirect areas immediately, but on the whole they exert pressure in the direction of cost optimization. Customer satisfaction in the indirect areas is substantially lower with respect to transparency and manageability of the costs than in direct areas.

Acting instead of reacting

The share of indirect costs and the related priority given to cost optimization of indirect areas rises proportionately to the size of the company. The people in charge of IT do not have an enviable position in their companies during times of crisis; every request for larger expenditures is subject to close scrutiny. Above all, the CFO seizes more and more of the CIO‘s responsibilities. Moreover, the IT unit frequently discovers that its influence on strategy weakens during economic crisis.

In many cases, the strategy during a crisis falls in the ­category of “saving according to time-honored methods,” including ­measures like staff reductions, restructuring, consolidation, and a halt to recruiting. But are these time-honored measures still in keeping with the modern world? More and more experts have recently come to the conclusion that the effects of such ­measures are only short-term at best. Successful companies orient their actions to the long term and can act rather than react during crises. Observers frequently note anti-cyclical behavior: while everyone else is reducing personnel expenses, successful companies re-engineer their service processes despite the crisis and hire qualified personnel, generating a contribution to more growth and laying a secure competitive foundation for the future.

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