Thriving in turbulent times

By Alex Kayle for SAP
Johannesburg, 03 Jun 2009

Cash-strapped companies trying to stay afloat in the economic storm are unwisely slashing away at costs and embarking on mass layoffs. However, this is not the solution, says Jeff Word, SAP VP of product strategy.

He addressed the two-day SAP World Tour 2009, which kicked off yesterday, in Midrand. The theme for this year's conference is surviving and thriving in the economic crisis.

“There are three major trends converging in the world right now. Number one is the global business network. Nobody is isolated from the financial crisis, it has touched everyone,” he noted.

“The global banks are rather a symptom of the financial crisis than a reason behind it. Combine this with global environmental challenges, and there are serious issues that all businesses need to take into consideration.

“Thirdly, people are working in a different way from 10 years ago. In places like the US and Europe, people expect to be instantly connected to everything all the time. Marry those three things and there are a lot of challenges that the business leaders face today.”

Smarten up

According to Word, companies need to think smarter, become leaner and spend wisely, and should avoid hack-and-slash policies. Businesses should align their focus to retaining customers, and also redefine their customer relationship strategy and look to attract new customers.

“One of my favourite quotes for crisis in Chinese is a combination of two things - danger and opportunity. And that crystallises the situation that we are now in. There's going to be a massive power shift in the world as a result of this. Companies that invest strategically and aim to increase market share rather than shut off all investments will come out on top.”

Word pointed out that IT has more responsibility than ever to act as a business enabler and to drive clarity into business processes. “Managing cash and getting clarity on a minute-by-minute basis is a strategic weapon. There's a fundamental shift in how companies will have to report on their sustainability efforts due to new government regulations.”

Word urged companies to not lose sight of the long-term goals because the upturn, when it does come, will bring with it financial rewards to those businesses that have planned for it. “Companies need to use IT to develop business processes and drive value for their customers, or their competitors will take the advantage. It's not about just having better products and better prices anymore. Companies are not only going to have to retain their best talent, but also give them the tools to become more productive.”