I'm sick of that phrase, aren't you? It's become the justification for all kinds of negative economic actions. There's no question that the nation's economy impacts everyone and every organization to some degree. The shock waves are felt beyond our borders, since so many world markets depend on the U.S. economy. The news headlines are filled with massive layoffs, Chapter 11 filings, and, of course, government "bailouts." If history is any indication (and it usually is), these are all signs of fundamental change and re-structuring. Those companies
(and nations, and individuals) who survive generally emerge stronger. How we react to "these economic times" can be the key to survival and prosperity, or the path to failure; and therein lies the challenge.
The mantra in organizations of all types and sizes in every industry is "cost cutting." The problem is that indiscriminate cost cutting can also reduce revenues. The net result can be zero change to the bottom line and, once the storm has passed, can create a potentially vulnerable position relative to your competition, who simultaneously cut costs and built their revenue machine.
Cut costs and build revenue? Has my wife been right all these years? Can you really save money by spending it? Maybe - and despite extreme across-the-board cutbacks in technology spending by most U.S. organizations - technology spending may actually be one of the few ways to realize this apparent paradox.
Two examples immediately come to mind - videoconferencing systems and digital signage. Just prior to the third quarter economic meltdown, videoconferencing vendors began making great strides in reducing costs and enhancing performance. Videoconferencing is not only truly affordable now, it's also finally a decent experience. Most relevantly, it's a viable alternative to expensive corporate travel. This may actually be the optimal time to invest on videoconferencing systems. The ROI benefits are clear and unequivocal; check most vendors' websites for ROI calculators. The cost savings from such investments are substantial.
The same holds true for networked digital signage. The technology is maturing, and reliable ROI case studies are being published that reveal not only substantial cost savings, but also true revenue creation, depending on the application. Digital signage has been proven to cut costs for corporation communications and training. In retail applications, these networks have increased in-store sales while also creating a valuable advertising medium.
So "in these economic times," cost cutting should be tempered with intelligent investing for the future. No organization wants to be like the Black Knight in the 1974 comedy classic, Monty Python and the Holy Grail. "Just a flesh wound," cajoles the Black Knight, after King Arthur severs his limbs, one by one. Too much cutting leaves one incapable of fighting future battles.