Business Software In A Recession

The Money Squeeze

Software Investment When Money is Being Squeezed

It will not have escaped your notice that the western world is and has been in the grip of a recession for some time now and most commentators are suggesting that it won't be over for some time yet. The 'credit crunch' or recession or whatever you want to call it causes headaches for businesses looking to move forward in a tough economic climate. Lying low and standing still is not always an option and as customers and clients are also feeling the pinch and harder to find then there has to be better ways to increase margins and cut costs. Whenever we are trying to boost profits and reduce spending we look to outsourcing as a solution for some non productive business processes and software solutions to cut in house costs, none of these solutions are free of cost so can we really justify making such moves at a time like this.

Outsourcing Can Help

Yes it can indeed help but it is not without flaws, outsourcing can work out more expensive than doing it in house especially on a per job basis.  This can be overcome by having an ongoing arrangement where a particular process is outsourced for an annual fee regardless how many times it is used, of course this can work in reverse as well with the annual fee making it very expensive if your demand for the service decreases.  Careful planning and a full understanding of the costs and savings needs to be in place for outsourcing business processes to be successful in reducing your costs and increasing your margins.

Why Software Is Sensible

Software to deal with back office functions or other business processes can be better value for money and can really make a difference to your bottom line in tough times.  The initial investment may make some a little hesitant to agree, but even with any annual licensing fees it tends to be much cheaper than an employee and the costs are fixed.  The resultant increase in people working on core activities producing more sales and profit make the return on investment swift and positive.  Not only does software work efficiently, it also works tirelessly, constantly and is completely impartial to the actual process meaning your clients and customers get consistency of service.  Not sure if it really can save you money, read my personal experience below.

Business Software

Software Investment Case Study

It was the 1990's in the UK, a time of terrible recession with businesses collapsing pretty much constantly. The business I was involved with was a recruitment agency, fortunately 2 large contracts were keeping us alive without allowing much for growth and we were treading water hoping the recession would end and we could be growing again. In common with other businesses we were riding it out or so we felt, the large clients were a national bank and a betting shop chain, both household names so we figured we would be ok, we were wrong. The betting shop contract was not renewed, a sense of panic overcame the company, one thing I new was we did not want to sack people but we couldn't continue as we were with just one client and we didn't have enough people to make the sales team more efficient.

What was happening was we were using a database application to manage all our resume's and potential placements and matching people with posts available at our clients, It seemed the only way and at the time seemed efficient but everything was pretty time consuming, we approached a specialist software company who specialised in recruitment software and were surprised at how inefficient our processes were. An investment in the software was made and let me tell you we wondered if we were doing the right thing.

After the learning curve was over we suddenly had bodies we could use in our core activities of gaining clients for all the job prospectors we had. Within a short period of time we had secured our businesses future due to the software, why the software you ask? well it was the software that freed up our people to work on our core activity, it was the software that meant we could handle more clients efficiently using less staff to service them, it was down to that decision to invest in software (and some experience in the sector) that the largest chain of betting shops in the country as well as 2 more well known ones became our clients, another bank followed and our experience grew into many other financial services sectors including insurance. I can tell you without hesitation that the recruitment agency software we invested in made our company, the company still runs today and is a major player in the financial services industry for recruitment and maintains all of the 3 betting shop clients it has had since my day.

Sounds like a return on investment to me.

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