Stephen Smith's Blog

Musings on Machine Learning…

The Economy and Selling ERP Solutions

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With the economy all over the place. With perennially strong companies like Microsoft, IBM and Intel having large layoffs and reporting bad earnings, what’s the prospects for companies like Sage that sell ERP solutions. A long time ago I read a book on the history of IBM. One thing that stuck with me from that book was how IBM transformed from being a small company to a huge corporation during the great depression in the 1930s. Basically IBM was in the business of selling giant desk sized mechanical calculators. During the depression these started to really sell. This was because companies were really concerned with controlling costs and investing in technology to help them control costs considered a huge benefit.

I think we are in the same situation again today. Companies can’t just look to grow out of their problems. They have to really address controlling costs and maximizing the use of their money. Companies are looking for technology to really help them control their business processes. To really understand how their business’s work, where all the money is going. How to do things more efficiently.

If an ERP vendor can really present a vision to help companies do this (which all strive to do), then they have a real competitive advantage and their customers have a real competitive advantage. This kind of win-win relationship can really fuel growth, and allow companies to do well even in really tough economic times.

Another thing that helps is strong leadership. Look at the results of Google and Apple which have done exceptionally well even in the current economy. I think this can to a large degree be attributed to strong innovative leadership.

Written by smist08

January 24, 2009 at 4:59 am

Posted in Business

One Response

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  1. The other side of the equation is the revenue generation side. Technology that can help companies manage and build their revenues will also likely be in high demand during a prolonged recession. It’ll be harder and harder for businesses to maintain their share of the customer’s “wallet”, and having tools to get their sales force closer to their customers will be very important. CRM tools, particularly web based ones, can help companies manage customer relationships like they’ve never been able to before.

    Of course, technology companies that can help manage both costs and revenues may do fairly well as the economy falters.

    Jim Smith

    February 3, 2009 at 8:07 pm

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