Ignore the advice; don’t cut back on IT

I recently attended the 2009 Gartner technology briefing, along with some of Melbourne’s leading CIOs from IBM, Telstra, ANZ and other big organisations. The dominating topic was on the cutbacks in IT spending that we should expect in 2009. The presenter was telling us that in 2009 we should see companies looking to maintain profits by cutting back on IT spending. He went on to explain that in the last recession, companies invested in systems that improved productivity and reduced operational costs.

Over the past years, companies have been spending money on IT systems such as CRM applications and ERP solutions that permit EDI and business process automation as well as reporting that permits faster reaction and better decision making. The incremental improvements available today do not justify additional work during this downturn.

His advice was to review all IT projects and close down all possible projects swiftly – now is the time for cutbacks and bare-bones maintenance.

This prompted me to ask a question: “Can you define the market place you suggest this strategy for, and comment on the relevance of this statement for the SME sector?”

Boy, had I asked the right question. The speaker stated quite clearly that his comments focused on the corporate and government sectors, and absolutely did not apply to the SME sector, which had really only installed computers since the last recession and are now desperately in need of the productivity tools the corporate sector have been using for years.

I was very pleased with this response as it reflected my own experience and observations.

Many of our country’s smaller businesses, which employ the bulk of our population, are behind in their business process automation and are in need of help. This is hardly a revelation, but our SMEs are too busy fighting for survival to heed the message.

So the very important message for Australia’s SME community is that the way to stay strong in this downturn is to invest in IT systems. Yes, I have a vested interest in this, because I set my business up to service this growing demand in the SME sector back in 2002. But the need is real.

The good news for the SME sector is that since Microsoft released Windows Small Business Server in 2003, there have been some solid solutions for the SME sector developed by many of the corporate software makers such as SAP, Microsoft and Oracle among a host of others.

Many SME business owners have implemented the infrastructure and are ready to go to the next level of automation and reporting. Many of those solutions are now being hosted in the cloud as well giving us a wide range of choice for productivity increases.

In 2009 it is time to look at this issue and seek the latest solutions for your business. This is the year to keep the money coming in and reduce your labor costs. If you can grow the top line as well, you will be truly ready for the impending upturn.


David Markus is the founder of Melbourne’s IT services company Combo. His focus is on big picture thinking to create value in IT systems for the SME sector.

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