Is it time to cut back or invest in Technology?

During times like these, it's always difficult to decide. It seems that this is true of many companies. And many times we view it from two perspectives. We often say "Do as I say, not as I do", and this is true of SAP, the software giant that says they can help you run their business better.

In a recent BLOG on the Australian CIO site, Thomas Waigum comments on what SAP tells their customers versus how they act internally. In October, they issued an internal memo saying "stop all spending on Technology hardware and Software". This month, they recommended that their customers should take this time to upgrade their business by buying SAP.

We all have this conflict. While I am not a believer in across the board statements like "decrease expenses by 20% everywhere" or "stop all spending", during these times it makes sense to look at what you are spending on. During peak volume business, it is very hard to focus on where you are wasting money. You are too busy reacting to customer needs. During weak periods, it is often easiest to cut back on everything. Large companies often cut to the bone and end up weaker after the recovery sets in. If you focus your attention on the areas of waste, you reduce costs in the short term and come out stronger in the recovery.

So the answer to the question is "It Depends". If the investment produces a return, then it is a great time to invest. If not, don't do it. The questions are: "how confident are you that it will produce a return?" and "do you understand how it will produce a return?".

However, now is the time to do it. When volumes are low, your people have more time: Time to look for improvement opportunities, reducing waste, improving productivity. One place to start is the software you already have. Most software is underutilized and has many more capabilities than are used. Getting better use of such an asset will position you for the recovery.

Click here for the blog article that was referenced.

http://www.cio.com.au/article/270919/blog_surprise_surprise_sap_promotes_enterprise_software_investment?eid=-154