Invest in ICT to Survive Downturn

Media release

Gen-i’s Quin Predicts Companies that Invest in ICT for Transformation and Innovation are Best Equipped to Survive Downturn

AUCKLAND, New Zealand, 24 February 2008 – The global credit crunch and economic downturn is forcing many businesses to look at new ways to protect their bottom line. The dilemma they face, with more urgency and intensity than ever before, is how to reduce costs while keeping up the quality and delivery of their product or service. Those companies that regard their ICT as a tool for competitive advantage will be better equipped to survive, and even thrive, over the next year.

This is the view of Chris Quin, CEO of Gen-i, a speaker at the CFO Symposium held in Auckland last week to discuss the issues facing businesses today.

“There are two fundamentally different approaches to investment in technology – companies either view their ICT as a competitive weapon, or they see it as just a cost of doing business,” says Quin. “However, many business leaders don’t even know which approach their organisation has taken, nor have they made it a deliberate choice.”

“Those companies that continue to invest wisely in ICT during a downturn, can improve the quality of their offering and strengthen their long-term future.”

Quin recommends that two-thirds of the cost of ICT should be used for running the business. The remaining one-third should be used to improve the business.

“You don’t want to dedicate all of your ICT budget to BAU activities – you need to make innovation and improvement a continuous and ongoing process. It’s needed now more than ever.”

“The danger is that, in a downturn, companies take the easy route by making cuts to their business improvement budget. They might manage to stay afloat, but their competitors could gain the advantage by finding innovative ways to create new value for customers.

“You can’t edge your way slowly out of this, you must transform. Remember that in past recessions, it’s the innovators that have emerged in best shape.”

Quin leads one of Australasia’s fastest-growing and innovative ICT services businesses, with 28% growth in IT services revenue over the last quarter, and pole positions in both marketshare and mindshare (according to IDC).

“Our strong partnerships with our clients give us great insights into what is on the minds of CEOs and business leaders. The key challenges they face include the need to improve their bottom line, get closer to customers and increase the effectiveness of people, through to meeting sustainability, compliance and business continuity objectives.

Once companies are clear about their approach to ICT, says Quin, they can start to make the hard decisions about where to focus their investment.

“Even if you just view your ICT as a cost of doing business, there are numerous ways you can invest in technology to achieve widespread benefits for the business, including cost savings, massive efficiency gains and improved customer satisfaction.”

Your competitive weapon
When ICT is a competitive weapon, it’s important that companies have a strong business case to justify the investment says Quin.

“Business-led business cases allow you to make the trade-offs and hard decisions on where to rationalise and where to increase investment. In addition, you need to make sure you are measuring the true total cost of ownership (TCO), and are very clear on your programme of investments, with benefits allocated to the targets of key managers.”

Part of that process will involve making capital trade-offs and simplifying the products and channels to market. It’s an understanding of the real value drivers for customers that distinguishes the successful companies from their competitors.

“Our own organisation, as part of the Telecom Group, is transforming its business this year, with several major programmes of investment to offer new and innovative services to customers. That includes a new WCDMA mobile network, new fibre rollout and investments in technologies, such as CRM, unified communications, telepresence and mobile applications to improve the efficiency of the business.”

Make the right choices
Gen-i is providing its clients with consultancy, services and solutions in key areas of ICT designed to deliver cost transformations, such as consolidation and commoditisation, data management and business intelligence (BI), contact centres, hosted services, and unified communications and collaboration.

Quin also recommends companies review their mix of permanent people and contractors, and look further than just the ICT budget. By making investments in technology to automate key capabilities, companies can make substantial cost savings elsewhere in the business.

“For example, Gen-i has invested in telepresence – a new videoconferencing technology that does manage to fool the brain into thinking participants are in the room with you,” said Quin. “We cut 20 per cent out of our travel budget and diverted 12 per cent of that into telepresence, building six suites in Auckland, Wellington, Christchurch, Hamilton, Sydney and Melbourne. That has not only reduced our overall costs, it has also enhanced our productivity by reducing the amount of travel for our people, particularly trans-Tasman. And, later this year, we’ll offer it as a service for our clients.”

“Your investment in ICT offers a real opportunity to give your business a competitive advantage,” Quin concluded. “It’s one of the biggest decisions facing business leaders this year, and is all about being ready for the next challenge, not just the current one.”

ENDS

About Gen-i
Gen-i is at the forefront of helping customers take advantage of the convergence of technology and telecommunications, and the new opportunities this makes possible. Gen-i works alongside its 3,300 corporate, government and business customers to deliver seamless and integrated ICT solutions. A member of the Telecom New Zealand Group, Gen-i achieves this with the support of over 3,000 highly skilled people in 17 locations across New Zealand and Australia. For more information on Gen-i, visit www.gen-i.co.nz

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