Staying ahead in an economic downturn
Tuesday, February 10, 2009
With the current change in climate, many companies are responding to the effects of a tough economy by expanding their use of existing outsourcing agreements and looking at new contract arrangements. Recent TPI data has revealed the strongest half year performance in outsourcing in 10 years. Gartner’s latest report also predicts a growth in the reliance of outsourcing. So, to ensure best practice and competitive advantage, robust Resource Planning should be conducted throughout the lifecycle of an outsourcing project. This should include the early decision making stage, through procurement, vendor selection, contract negotiation and enforcement, to the service delivery and management of the relationship. This requires planning when and where, specific human talent and resources are to be deployed to guarantee efficient and effective commercial management.
Although there is a perception, with redundancies hitting the National Press on a daily basis, that it is currently an employer’s market. Actually, there is a stronger need than before to retain key personnel. A company can use lock in bonus schemes to mitigate the risk of losing key personnel. They can also maintain their competitive edge by offering training initiatives, not only to enhance their own skill pool, but also to make them an employer of choice. However, even with the most competitive and innovative schemes in place, there will always be some natural and welcome attrition and a need to source new leadership talent. Usual methods of advertising and recruitment data-base searches are less likely to bear fruit in recessionary times and often do not entice the best in class, as many good candidates go to ground during periods of uncertainty and instability. A pro-active methodology is best applied to map the market and approach a targeted and gifted pool and then manage the process through to successful hire.
The credit crunch is also likely to hasten organizations seeking to cut the amount paid to vendors by negotiating lower rates with suppliers and creating additional competitive advantage. This will also increase the dependency on offshore suppliers.
In a downturn, Mergers & Acquisitions are sometimes more of a necessity than part of a longer term strategy. As a result the press has been alive with M & A news in recent weeks, not least the Lloyds TSB and HBOS merger. The transitional stage following a merger is always a critical time for companies and this is amplified even more during more unstable economic times. Aligning systems after a merger is always challenging – often organizations are left with a legacy of systems that are incompatible (and in a worst case scenario the internal politics can impinge the best outcome being achieved). This creates an increased demand for technology professionals specializing in IT architecture. In particular we are seeing a demand for skills around migrating applications, communication systems and data and process integration.
An efficient Project and Programme Management Office responsive to a leaner business delivery model is an essential requirement in challenging times. Many companies are seeing significant savings by operating a centralized robust project management office. There has been, and will continue to be, an exceptional demand for good programme and project managers with excellent business engagement and stakeholder management skills, particularly where technology is being used to drive fundamental business change within complex organizations.
A recession forces all businesses to re-examine their strategic vision. Beyond the immediate agenda, for business to thrive during a period of global instability, this should be quickly followed by a bold and aggressively delivered strategy. Without doubt this will mean there will be a continued demand for professionals with a strong track record of driving business innovation and technology change with cost reductions - cheaper, faster, smarter.