When sales drop, it’s hard to
justify outlay on information technology, says consultant Nic
Evans.
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Although there has not yet been a marked
revival in orders for software, vendors have been active in
releasing new versions of existing products as they seek to remain
competitive in a market with fewer potential clients.
Consolidation in the market includes
Cassiopae’s acquisition of InfoParc, a Paris-based fleet management
software provider, and White Clarke’s acquisition of Nexus Business
Solutions.
Nic Evans, independent business finance
technology consultant, said that the need to define requirements
clearly and make sure new business processes are properly piloted
is imperative as finance organisations evaluate new systems and
providers vie for their business.
Although there have been several announcements
of systems upgrades in the past few months Evans does not seen this
as a sign of a “V-shaped revival. It is a coincidence of the
completion of some larger projects commissioned before the crunch
set in, with the arrival of some smaller tactical and critical
projects. In times of growth it is easier to justify systems
investment. If you attribute 1% of 20% annual growth to your new
front-end system you will soon achieve payback.”
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By GlobalDataThe difficulty is proving a direct link
between system and sales, and this justification for investment in
systems will fail if sales fall.
“You are left with increased expenses from a
white elephant system. Even if your sales system opens new
channels, this could be at the expense of sales in other channels,”
he said.
The most significant justification for
investment in new systems is efficiency.
“In times of growth, a system can be justified
by reducing headcount to support increased business. But in a
contracting market, ironically, it becomes more expensive to reduce
headcount. You can no longer rely on not replacing leavers,” Evans
said.
The best way to ensure success with IT
projects is to keep them short and focused, he added: “The bottom
line is that your systems vendor will deliver the technology. But
it’s up to the business to make the change.”
