Succeeding in the New Economic Environment

IBM Global Business Services View

There are more forces pushing on businesses than just the economy.  Businesses are facing more difficult credit issues; the explosion of information; globalization of suppliers and customers; and new customer demands.

Cost Management will not be enough, they will need to:

1) Focus on Value

Do more with less –
Focus on Core Competencies –
Re-align Relationships for Efficiency – Partner extensively and enter new markets

2) Exploit Opportunities

Capture Market Share –
Build Future Capabilities –
Change Your Industry – Double down in growth markets

3) Act with Speed

Risk and Transparency – Make use of business analytics to make decisions
Leadership –
Manage Change – Set targets and measure your success

It is all about Smarter Business Outcomes – Reduced Costs; Increased Revenues; and Improved Customer Relationships.

My Thoughts…

This appears to be IBM’s answer to ‘Never Waste a Good Crisis.’

They are using different words to address cutting costs, increasing revenues, and improving customer service [the Triple Crown].  They have put forward elements of a plan and we all need a plan.  This may be a good place to start in building your own plan.

They do make some important points…

Focus on Core Competencies – all too often, companies will spend efforts that are not among their core competencies.  In the past, Sun, HP and IBM all made their own microprocessors [building chips and writing software to run on them] and today they are all moving to Intel.  A bank will have their IT departments write software when there are commercially off the shelf solutions available.  Companies really need to focus on their core competencies and farm out the ‘noise’.

Change Your Industry – they suggest to ‘double down’ in growth markets.  Now is the time to attack growth markets.  This is an example of the all too obvious:  Find out what people want and give it to them.

The common thread through the entire plan is efficiency.  The goal of six sigma programs and lean manufacturing is efficiency.  Your biggest gains in efficiency will be made through business process management.  Process improvements, if done right, can have a big impact on cutting costs.  Process improvements with customer focus can have a big impact on increasing revenues and improving customer service.

The current economy will create some losers, some middle of the road companies and it will create some winners.  The challenge – Companies need a plan to become one of the winners.  They need to throw some innovation at the problem.  And, they need to start becoming that winner.  The sooner the better…

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