10 Strategies for Doing Business in a downturn

I was having a conversation with Michael Counsel (Senior Director, APAC Solution Engineering) regarding what advice he would give organisations in the current economic down turn. The view was first and foremost that organisations need to “stay in business”, but what he highlighted was 10 key areas that every organisation should evaluate in this difficult and uncertain economic climate:

1. Acquire Market Share - The number one strategy is making sure you continue to not only maintain and grow market share in your revenue generating business areas or revenue centres, but look for opportunities to acquire market share in new markets during the downturn. Get more customers and in wider markets provided you can sustain supply costs.
2. Look for Acquisition Opportunities - The downturn will drive some companies to the wall. Many become bargain priced for acquisition. If you have the means, this can be an outstanding strategy which can turn medium to large players into corporate giants when the market rebounds.
3. Opportunity to Fix Business Process - Loaded processes are hard to change in confident times and less efficient pieces are hidden in the profit margin and good revenue you enjoyed. This is an ideal opportunity to take what you knew needing fixing in a business process…and fix it. You will not only profit from the operational savings in the downturn, but the increased margin when the market rebounds.
4. Automate the Commodity Operations - Convert commodity operations which require human labour into automated business processes and services. You will need to be careful not to inadvertently wrapper a differentiating or competitive advantage process inside a commodity automation initiative.
5. Offload High Cost/Risk Customers – Analyse and understand your customer base and work out which customers are costing you money. Off load these to your competition
6. Double Investment in Innovation - The worst mistake you can make is cutting innovation in your business. Work out what differentiated you before the downturn and will still be in effect when the market picks up. Harness creative talent in your organisation to adjust and adapt quickly at the next upturn. Organisations that increase their competitive advantage and differentiation have been proven to get earlier and more rapid revenue growth in the next upswing.
7. Watch Your Suppliers - Remember in downturn, your key suppliers may go out of business and Supply chain response time can be deadly on the recovery if you are looking to rapidly get product to market. This time may present an opportunity to vertically integrate and make sure you can meet production levels on the way out of recession. Which in turn build that platform for greater profits
8. Re-platform your IT Operations - Use the opportunity to re-platform IT infrastructure to lower cost platforms and commodity computing. Take an inventory of existing applications and decommission, consolidate and virtualise where possible. Take the opportunity to rebuild and modernise key pieces of infrastructure which creates long term resilience and connectivity, while also improving functionality. Organisations should be vigilant on maintaining software and hardware currency by upgrading disks, servers and software on regular timeframes - not doing this can have disastrous medium to long term impact as outlook improves.
9. Adopt a Shared Services Strategy - Find ways to lower the cost of operations for commodity or corporate services that help you run your business, eg ERP/Back office processing. These are generally not the core business/revenue generating systems. You should attempt to share these operations with other business units or functions in your organisation.
10. Insource Your Key Systems - Outsourcing and Managed Services are good when you want to trade risk for premium pricing and is especially valuable in confident markets in equilibrium. Invest in the future of the business by insourcing the key (revenue) system operations so you can inject knowledge into the future talent pool and have creativity inhouse. Having the revenue systems under your control means rapid response without waiting for a third party.

Whilst some of these seem obvious, the key to success is the leadership and strength to pass the microscope over the organisation and take the opportunity to evaluate the current situation, and develop a plan that provides short-term operations cost savings whist laying the foundation and roadmap to prosperity when the market rebounds

Mike Counsel can be contacted michael.counsel@oracle.com

Actionable Architecture

I read following blog Architecture as diagrams is an anti-pattern where the it is positioned that the creation of diagrams an only a visualisation or representation of architecture.

I could not agree more that the key for successful architecture as to assist in the implementation of strategy. As mentioned in the blog,

It is the misguided belief that the creation of diagrams is architecture. They are a representation of architecture. For architecture to be useful it must be actionable. A diagram is not actionable, it is a visualization. The specification relating to the blob on the diagram is actionable - you can build it, deploy it, assess it, review it. A colored blob on a diagram is next to useless.

I have seen too many examples of organisations that focus on creating artifacts relating to current and future states, but under invest in the development of the roadmaps to make the transition. This step of making the architecture actionable is the difference between using visio and driving buisness change and transformation.