Recession Proof Initiative -- August 18, 2006
Now here is an unwelcome thought -- recession. I believe the current indicators demonstrate that the US economy is just in the early stages of contraction driven by a "hard-landing" of home sales and prices, unprecedented consumer debt levels, skyrocketing energy prices, and growing credit tightening. Additionally, we have witnessed a lackluster stock market with little sustained direction and world conditions that could easily send our economic virtues into long-term liabilities.
For organizations trying to steer through the morass of macroeconomic conditions, transient workforces, and an uncertain political climate, the decisions made today on where to innovate or invest for future profits has been made all the more challenging. For example, traditional measurements surrounding ROI, IRR, and NPV are no longer sufficient when examining new "Web 2.0" or social networking customer service and market approaches. These nascent solutions lack a proven track record and return thereby creating a high-degree of uncertainty and risk for organizational decision makers.
For progressive organizations, we must reexamine history and go back to understanding some fundamentals -- core offerings, profit centers, market segments, and stepwise deployment of RELEVANT innovation (including process enhancements). Strategies such as outsourcing have become mature and in some cases liabilities when dealing with the landscape of global conflict not seen during the last quarter century. Areas such as BPO, HRO, and ITO are no longer just cost efficiencies, as they must be examined holistically in terms of risks, regulations, and operating viability.
As the global economy makes its third major shift since the early 1990's, enterprises must review and accept changes to their operating model that meets these demographic, fear, and political realities. As a result, information integration needs will be paramount in dealing with restrictions in travel, joint ventures, and third-party production. Methods, tools, and techniques that can aid with this "generic" goal will survive and flourish even in the face of turmoil. No longer just about enterprise or legacy applications, we are now talking of virtual collaboration, RSS feeds of enterprise information, ubiquitous and prevalent XML, and hierarchical integration of "streams" regardless of origination or format.
For executives, profits will reside with the ability to quickly adapt and make decisions. Consequently, tremendous investments will be made in these offerings by-passing traditional financial limitations and constraints. Ask yourself why $15 billion has already been invested by private equity and VC organizations in this area during the last several months?
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