Economic Crisis - How can I.T. help

Amidst an environment of Economic Crisis (global or Greek!), the modern Enterprise faces a number of challenges. It also faces some pressing questions about its mission and objectives: should it turn its sights to new ventures? How is its mission statement affected by the crisis? What are the alternative revenue sources that can be used to enhance the financial position of it?

In this post I shall not deal with such issues (which are mainly in the agenda of the CEO or the President). Instead, I shall focus on “trivial” problems that the Enterprise faces in its everyday operation (ones that are amplified, though, in an Economic Crisis situation) and how Information Technology can assist in tackling them. In the end, I intend to show that I.T. must be utilized (“mobilized”, if you will) in a time of Crisis and that I.T. is a valuable ally in the “war against the Crisis”. I will approach this goal by identifying some of the problems that are enhanced during an Economic Crisis Situation.

  • The Crisis hits your customers, too
    In a time of crisis you are not the only one that is affected. Your customers are, too. And this has a direct impact on your revenue. Do you know which are the customers with an open balance? Yeah, sure, you have that old-fashioned “customer balance” report. But I bet that it can’t provide you with qualitative information like: how old are these balances? How often customer A leaves an open balance of X dollars for Y days? Have you ever contacted them to close these balances? When? Who? What was the outcome of those contacts?
    Also, is your infrastructure (software, accounting, automated email systems, CRM, you name it) giving you “early warning” buzzes for those problematic cases?
    And which employee has undertaken the task of communicating with each of these customers? When?
    The list goes on and on…

  • Minimize your warehouse inventory
    This is a lesson that any and every warehouse manager knows. Still, I bet that there a lot of you out there with warehouse systems that do not help in that direction. In fact, I know that there are a lot of you that have warehouse accounting systems (balance tracking, price lists, ordering subsystems etc.) – and they work fine – but don’t have a WMS (Warehouse Management System) and don’t apply forecasting algorithms for the replenishment of your warehouse.
    So, how can you reach the goal of minimizing your warehouse inventory, if you are managing some thousands of warehouse codes, with your brain?...

  • Expanding you customer base
    If your customers face economic problems, then now is the most pressing time for you to seek new customers. If you achieve this, then you should go through the crisis “tunnel”, almost untouched.
    How is your current I.T. infrastructure helping you identify your best selling products? Yeah, right, this is a standard report in the Sales Module of your ERP. OK, but what products sell to which customer profile. Do you actually maintain customer profiles in your marketing department? And how are they mapped to actual product sales?

  • Maintain and increasing customer loyalty
    It is very probable that prices will go down in your product range because you and every competitor of yours are being pressed. So, your customers will grab the opportunity and make new market research for themselves, to find lower prices. When not in an Economic Crisis situation, customer loyalty is – by definition – higher. The market is stabilized, prices and relationships are too. It is in a crisis situation that almost all customers will initiate a new cycle of market research. How do you keep your existing customers?
    Does your system allow you to create and maintain discount campaigns?
    Have you deployed Predictive Analytics to identify which customers are most likely to leave you? For what reason? How do you tackle these cases? How can you make a direct emailing campaign? Does your 90’s ERP support such functions? Do you own a CRM system?

  • Increase customer service
    In order to keep the customer happy, it is not enough to offer the lowest selling price. Customer will also appreciate some more distinguishing “virtues” that you display. And one of them is Customer Service.
    When a customer comes in, do you recognize them immediately? Do you have a complete image of his personal data? More important, do you have a complete image of the previous transactions that you have done with them? And what about issues and problem tickets? Have you registered them? Do you know that they were satisfied at the end? These are issues that your traditional accounting system (or even ERP) cannot help you with. You need something more. Call it CRM, Data warehouse, Customer Base, Document Management, whatever.
    Imagine that you were a customer and walked in a shop and a smiling employee immediately approached you and said:
    - Hello, Mr. Smith, how is your new SUV 3.0 GTX running? And what about that gorgeous BLUE color?
    - Hello, Mr. Smith, how’s your wife and child doing. It’s been 3 months since we last talked on the phone? And I know that the problem you had was solved by our certified technicians.
    Hello, Mr. Smith, thanks for stopping by. I saw that you responded to our recent email campaign. I guess that you came over to see our new product line, right?
    All of the above intense-font words, are data pulled through the system when you punched in “Last Name: Smith”.

  • Budgeting and forecasting
    Do you have a budgeting and forecasting system? Let me rephrase: do you actually know the impact of the Crisis to your business so far? Do you have any idea of what is going to happen until the Crisis is over? (Some say “it’s going to get uglier before it becomes prettier”)

    I think that the above is just a small collection of urgent issues that the “line” manager must face in a time of Economic Crisis. And to do that, they need extra support from their I.T. resources. I think that I have proved that and I hope I have also proved that the information cannot be delivered to the manager just by printed “reports”. But more on that, in a future post. Until, then, go on and identify the most pressing issues of your department. Take them to the CEO and the CIO and see what happens…
  • Comments

    1. Tasso,
      One more issue to drive IT impact during crisis:

      Predictive analytics: is an area of statistical analysis that deals with extracting information from data and using it to predict future trends and behavior patterns. The core of predictive analytics relies on capturing relationships between explanatory variables and the predicted variables from past occurrences, and exploiting it to predict future outcomes.
      If PA is important in normal times, is even more crucial in crisis tempest times.
      Thanks
      Costas Louropoulos

      ReplyDelete
    2. it's good to see this information in your post, i was looking the same but there was not any proper resource, thanx now i have the link which i was looking for my research.

      Accounting Dissertation Proposal

      ReplyDelete

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