Unlike many, I've never actually believed that this recession was just another minor 'bleep' on the never-ending spiral of growth. IT companies in particular continue to feel the heat, and because they are providing services that are vital for enabling business activity, their performance remains a strong weather vein in gauging the health of modern economies.
US economist Peter Schiff explains the overall situation lucidly. He was also one of the only voices to predict the current situation back 4 or even 5 years ago.
What does this mean for businesses then? According to Schiff, the solution is to encourage savings and production (not something that's happening either in the US or UK at the moment by the way). It's also a difficult task to achieve when taken together. And as a result, individual businesses are going to continue feeling the squeeze in the coming months and perhaps years unless they act wisely now.
But those that do act now, will survive to reap the profits later. The need for products and services will never go away. A recession is simply the market's way of correcting over-spending, unjustified investment and overconfidence (brings to mind the Enron story!), otherwise known as a 'bubble'. But it also sorts the wheat from the chaff. Only the smarter, stronger companies survive. But as we saw with the Dot Com clear-out, those companies will a real, competitive offering, not only have a better chance of surviving, but go on to thrive.
This means looking for smarter ways to ensure productivity - now. For IT this means changing corporate habits and adopting a new set of rules:
- Use solutions that allow you to get more value and productivity from existing technologies (code-free integration tools are a good step in the right direction).
- Acquire only solutions that are future-proof (metadata solutions will ensure easy adaptation to future technology platforms and new business requirements).
- Look for ways to combine skill sets and technologies (such as adopting an end-to-end application platform to build RIA and SaaS rather than a Microsoft or Adobe front-end product that then requires you to buy back-end solutions and resources separately).
- Ensure that business goals are the top priority in every corporate function, including IT (a metadata platform helps because it's simple enough for business decision makers to follow the IT process - and it enables faster and more effective application prototyping).
- Remain open to different technologies - don't be fooled by some big-spend vendors who pour millions into making their technology look convincing - and look out for hidden costs that aren't mentioned in the sales pitch.