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CIO: How to cut your costs without compromising service Print E-mail
Written by Dan Hawker   
Research from Forrester reveals that 43% of large global companies have cut IT budgets this year, with almost 30% of respondents intending to “Assess projects more thoroughly” (the second most popular response after “Already cut IT budget”). If SAP is a core part of your IT strategy, Bluefin can help you cut your spending without compromising the quality of service to your internal customers

August 2007 saw the tipping point in a global financial crisis that has developed into what we now know as the Credit Crunch. Huge turmoil in the Financial Services industry in late 2007 and early 2008 spilled over into the “real economy” during 2008. At the same time, effects which were largely constrained to the US and other western economies, became more and more global. Global companies – including our customers to varying degrees – are feeling in particular 3 key effects:

  1. An increased cost of capital. Credit is harder to come by, and customers are worse at paying because they are trying to conserve their own cash. This makes capital investment more expensive.
  2. An increase in input costs, coupled with an increase in the volatility of these costs. Raw materials are suffering inflation in several key areas – some areas such as food for the first time in many years, prompting some companies to fundamentally alter the way they buy these materials, bringing in hedging experts and new systems. And of course oil prices soared over the first half of 2008, before falling rapidly as demand slackened, and speculators left the market.
  3. A decrease in demand. The global economy is weakening across the board, which means that customers are buying less, and being more choosy in what they buy.
In summary, not a great time to be spending money on nice-to-haves, and most people are focusing on ‘make do & mend’.  However, there is a category of project that falls in between – these are projects that have a clear business case, with mostly tangible benefits, and a payback of under 2 years. Most of these projects will be based on cost-cutting, but some may be based on capturing market share at a time when weaker competitors are vulnerable.

Case Study: a Bluefin customer who supplies to the building trade is therefore in an industry that is under severe pressure, with many companies going under, or making losses. This customer is scaling back on capital investment in non-essential areas, like its peers. However, it has chosen to invest in SAP CRM in order to engage more effectively with its customers. It is also choosing to maintain a focus on quality, even though cost pressures on raw materials are causing its peers to cut corners on quality to maintain margins. In this way, our customer hopes to capture market share by maintaining a quality product, and increasing the quality of its service, at a time when its competitors are vulnerable.

There is an issue here, though, which many of our customers face. Even if SAP is a core part of your strategy, it will no doubt form only a part – if a large part – of your function’s scope. With pressure on costs, there is usually not a place for maintaining a large, in-house practice of SAP experts in all areas. But without that in-depth expertise in SAP, how can you build – or better still, identify – the robust business cases that will allow your organisation to rise above its peers? In the words of the Forrester research, how will you “assess projects more thoroughly”?

This is where Bluefin can help. As a leading SAP specialist, we have a dedicated team of people whose sole purpose in life is to advise on, implement and support SAP solutions that solve a wide range of business issues. Our Client Partners are adept at identifying opportunities for SAP to add value to your business. Our Project Managers are ruthless in ensuring your proposed projects deliver on their promises. And our consultants are expert in understanding what the real business issues are, and applying SAP intelligently to address them. But these are things you’ll only find out by working with us.

On a more tangible level, our Business Case service is a quick, effective way of giving you access to the a library of many hundreds of business cases – some that stacked up, and some that didn’t – in order to allow you to be sure that what you’re presenting to the board for approval will stand up to scrutiny (or withering attack, depending on how ruthless your FD is feeling right now)!

We agree with Forrester’s research – there’s never been a more compelling time to assess your projects more thoroughly, and if those projects involve SAP, and the more difficult areas such as CRM, BI and HR in particular, then you need to talk to Bluefin. Or risk spending more time reworking business cases for projects, than you do actually delivering them.
 

SAP HR/BI WORKSHOP January 29, 2009 , Liverpool

Empowering Your Managers and Employees - Using Human Resource Data Intelligently

How to get more from your HR IT system for reporting and information. Find out how SAP-HCM and SAP-BI come together to provide a world class delivery of HR information. More

SAP UKI User Group HR SIG, February 3, 2009

Bluefin is sponsoring and hosting this event at the Bluefin office in Liverpool. More.