IT systems still pack business punch

It is always exciting when the IT guys come through the door with software upgrades in hand. The reality, however, is that times continue to be tougher than before and many CIOs haven taken a cautious stance, preferring to hold off on those long-awaited upgrades just a little longer.

So, in many companies, the IT guys are not banging down the doors with upgrades in hand and while I understand why, it is important to remember that cutting back on systems that add value to your business is not necessarily the way to approach a challenging economy.

It is easy for pessimism and negativity to find their way into business today, and easier still to believe the only way to wait out the storm is to batten down the hatches. As a result, a box which is very likely to receive a tick when the bosses sit down to trim the fat is the IT department. Depending on the extent to which the fat is trimmed, it could be detrimental to business efficiency - something which is in fact crucial when times are tougher.

Being cost conscious is always wise, but tougher times call for innovative thinkers; go-getters who are prepared to ferret out good opportunities and exploit these. This is where technology is a proven catalyst. It allows businesses, of all sizes, to operate more efficiently and drive revenue growth.

Unfortunately, the truth is that technology may put a strain on finances as managers find themselves having to consider replacing obsolete software and computer systems faster than expected. SMEs are particularly vulnerable to return on investment and therefore need to see that every cent they're putting towards IT is delivering some value.

My advice is to not focus on shutting IT requirements down in favour of cost-cutting, but rather to focus on making strategic IT investments. Without technology as an enabler, there is the risk of missing out on opportunities and even losing staff to more technology-savvy companies as they seek improved job satisfaction and career prospects.

Generating income is the fundamental requirement of any business, and while costs can be cut as much as a company likes, without effective sales and marketing activities, businesses are treading on thin ice. Those that realise this will also know that their sales and marketing divisions are reliant on information and communication and, as such, will continue to benefit from the use of software systems.

So, while it may not seem like anything needs fixing, companies should be mindful of totally stifling their IT requirements. Every business owner needs the same thing from IT - the optimisation of the processes that support their business. Most, including SMEs, understand they need to embrace technology in some form in order to stay competitive. But SMEs, as others, are sensitive to price and returns on money spent and although they view technology as a driver for increasing efficiencies and competitiveness, its role as a strategic business tool can be undervalued.

It is important to remember that cutting back on systems that add value to your business is not necessarily the way to approach a challenging economy

Ivan Epstein is CEO of Softline.

SMEs have a lower turnover and smaller workforce than their larger competitors, but often have the same business processes and are just as complex. This is why they need to embrace the solutions available to them with a larger corporate mindset, looking at the advantage an application will offer them well into the future.

They also need to do away with their 'island' mentality when purchasing solutions - as opposed to buying a product merely to fulfil a single function like inventory. For example, they should rather look at how this system links to other operations and processes and buy an application that addresses these holistically. In this way SMEs can turn their software applications into strategic investments that enable their businesses.

I believe the following suggestions provide a good guideline for those companies that find themselves in an upgrade or replace dilemma:

* Take note of and understand which technology investments help to increase productivity and better serve clients.
* Continue to fund strategic technologies, even during an economic downturn.
* Bear in mind that target markets will also be feeling the economic slowdown so make sure the relationship with them continues by providing efficient, affordable, and high-level products and services.
* By all means, shelve non-critical upgrades until the economy picks up.
* Don't cut back on line-of-business applications. This means continuing to support technologies such as time and billing software that make business more efficient.

Whatever businesses' IT strategy may be at this time, I don't advise that they cut it. Good spending does exist and it comes in the form of IT investments that will add to a company's productivity and bottom line. It shouldn't just be all about cutting costs, but more about controlling costs.

* Ivan Epstein is CEO of Softline.