HDX Article
19 CVSN INSIDER May 2009 When Business Booms Again... When sales are down, it only seems logical to cut costs to improve your bottom line. The question you might want to ask is How can I cut costs now in ways that will make us stron-ger not weaker when business conditions improve? The answer may be in technology. During the last business boom for our indus-try, it was easy for distributors and parts man-ufacturers alike to overlook the little things in the business like information technology that could help improve the bottom line. The most common excuse overheard was We're too busy to implement that project. It seemed ironic to hear someone say they don't have the time to find ways to improve their operational efficiency, or more simply stated, to save time. Now, the excuse seems to have shifted slightly. Instead of being too busy, people are saying they don't have the money to start new cost-savings projects. Again, the vicious fangs of irony drip. Looking around the industry, it's not hard to spot the companies who have successfully broken away from the downward spiral. The companies that invested in improving their internal processes still show positive sales growth, even in today's weak economy. They have smarter inventory levels and automated processes, which in turn, gives them more time and money to re-invest in their business. They continue to increase locations without increas-ing support staff. If you find your company a few steps behind on the technology curve, maybe it's time to take some sage advice from other industries. In a February article in the Wall Street Journal, Catherine Brune, senior vice president and chief information officer for insurance giant Allstate Corp. stated, People want to hunker down and not spend money on anything. But we're going to come out of this, and as a busi-ness you have to be poised to take advantage of that. While the dollars to invest in technology aren't as abundant as before, the value of these proj-ects remains as high as ever. In what areas are companies investing? CIO Insight, a leading on-line and print resource for top IT execu-tives, recently surveyed over 200 executives on their 2009 IT priorities. The top four (in order) were: improving business processes, deliver-ing better customer service, cutting costs, and generating more business from new and cur-rent customers. Right now, your competitors are finding new ways to cut unnecessary time out of their op-erations. Your competitors are using point of sale data to better understand their customer base. Your competitors are investing in tools that connect them to their customer's systems to provide improved service and value through closer collaboration. And yes, this is all taking place while we're in an economic downturn. As Jonathan Byrnes, a senior lecturer at MIT, states in his column on managing profitability The Bottom Line, it becomes essential to en-hance profitability for both sides of a trading partner relationship. Today, customers and suppliers are desperate for improvements in their own profitability and cash flow. In these tough times, they will be unusually receptive HDX Services Edward Kuo Executive Director HDX ARTIClE