One positive effect  of the current recession is that it has produced some constructive thinking about money management. According to Ernst & Young’s Opportunities in adversity study, 82% of businesses say that “cash is now an issue.”  CIOs, like their counterparts across the organization, are seeking ways to conserve cash, and perhaps this crisis intervention orientation will be the start of some longer-term shifts in attitudes, behaviors and trends.  As the old adage goes, “Necessity is the mother of invention.” Recessions are very natural times for new attitudes, behaviors and trends to take hold, because “business as usual” is no longer working.  They are times to reflect on lessons learned.

The recession is raising consciousness, for example, about just how much money is being spent on IT maintenance and support.  As the role of IT has expanded within organizations, starting with pure data management, then moving on to information management, and then strategic knowledge management, maintenance and support costs have also expanded to consume a staggering 70% to 80% of IT budgets, according to Forrester Research.  It’s not uncommon for companies to own a multitude of data centers and hundreds of servers. 

One way to look at this problem is to simply acknowledge that this is the inevitable trend. But, the other way to look at it is that the cost-saving opportunity here is huge.  There is no question about the fact that adopting a managed services approach can save the organization significant amounts of money, because you are giving over day-to-day maintenance and support responsibilities to a firm that can take advantage of the economies of scale that come with being in the business of managing technology for a multitude of organizations.

The transition to managed services has been understandably difficult for many organizations to embrace.  First of all, it is big change, and change brings up the very natural and appropriate attention to risks.  Are there security or privacy risks, for example?   

As it goes with technology, however, continuous improvements have been made to ensure that the organization is not putting itself at risk with the transfer of IT maintenance and support to an outside partner.  The solutions have been baked in to ensure that your data is perhaps even more secure with an outside vendor that provides managed services for a living.  The risks have been addressed…and managed services should enable you to provide even more proactive and preventive support than can be provided internally.  This is because, to be a player in the managed services business, a vendor must have state-of-the-art equipment, processes and practices, all across the board.

And think what you could do with the budget freed up for more strategic work.  Your organization definitely needs to make the best use of the “I” in your “T,” but it does not need to have the “T” maintained and supported internally, at a cost that, almost invariably, far surpasses what can be provided by an external vendor. It’s the 21st century, and you now have a higher strategic calling.  Your organization needs you to free up dollars to invest in strategic innovations that improve the financial position of your organization, better serve your customers and, if yours is a commercial enterprise, give you a differential advantage.

We’ve heard it before, change is the only constant. Change comes in waves and in many forms – big, small, congenial and risky – causing you to evaluate your current state and wonder if the decisions you make will bring you to a safe harbor of continuity and growth or into a rocky reef of maintenance-laden, disparate application interfaces.

The Oracle Solutions Fair took place on January 29. As we were headlong into what was projected to be a very long-term recession, the question in both the customer’s and vendor‘s mind was: Why should I spend money or resources on Oracle products?

Mark Stevens, Vice President of Industry Strategy & Insight from Oracle, gave an excellent opening presentation, Building the Business Case for the New Technology Stack, arguing on that very subject. Several well-documented studies have made compelling arguments about the importance of making the right investment decisions during a recession (e.g., cash investments vs. cash hoarding and IT budget cuts vs.other departmental cuts).

Stevens indicated that the longer a recession lasts, the greater the post-recession growth prospects – and companies that invest during the recession are far better positioned to take advantage of that growth…a ray of hope during these dark financial times. Stevens cited Wal-Mart, Abbott Laboratories, Walgreens and Arrow Electronics as companies that are continuing to invest and execute growth strategies as we move deeper into recession, which should serve them very well when we come out on the other side.

Synch-Solutions reps attending the event looked at the following Oracle solutions:
Identity Management – a security manager to control all application security
Business Intelligence – the collected information from a data warehouse that enables informed decision-making
SOA (Service Oriented Architecture) – Web-enabled connections creating a kind of 21st-century EDI (Electronic Data Interchange)
Beehive – a collaborative software similar to the Facebook model

Any organization considering these products must answer to the question: How can these products help our business? In order to answer this question properly, the organization must first answer another question: How do we want to achieve our business goals?

In general, the application of technology as a speculative investment, rather than a strategic investment as part of a unified overall plan, produces the same results as a bad stock pick. Case in point: there are no mass-produced 5-wheeled cars out there, or GPS wedding rings!

But an investment in technology that improves a task, fulfills a goal or rolls up to a mission statement is a wise choice in any economic climate.