April 11, 2008, 2:24 PM — Running a business is no fun. So now that the economy appears to be going south, what's an integrator to do?
There's the business that planned for tough times by cutting its inventory 10 percent. Sure enough sales were down. And they did the same the next year, and the year after. Sure enough, in just a few years sales had dwindled beyond the point of no return. Not a good business model.
There's the tactic used by the IBM of old, in the mainframe era, before PCs had even been dreamed up. When MIS (we didn't call it IT back then) spending declined, the company put more salespeople on the street, not fewer.
How smaller integrators and solutions providers handle times like these varies widely, based on my informal conversations.
In an effort to avoid layoffs, it seems most are following in the steps of that old IBM strategy. They've hauled out the Rolodex and started calling dormant and then former accounts. Dormant accounts are still yours, at least until you're shown the door. And why did that account go dormant in the first place? Perhaps it was too small to bother with in good times. Maybe the IT director you dealt with left. It could be that your account reps were focused on bringing in new accounts, neglecting some existing ones. In any event, it's the time when you want to step up your marketing efforts.
Whatever the reason, opportunities within these smaller firms may exist. They are the companies less likely to have up-to-date security in place. The data backup products you installed two years ago might be underpowered now. Or the procedures aren't being followed. Computers and other hardware bought more recently may not be protected against voltage spikes or blackouts by a UPS. Their printers may no longer be fast enough. You get the idea.
Curiously, it is in tough economic times when your staff becomes most stable. With your competitors in the same boat, there's no place else for your best people to jump. Even corporate IT departments are cutting staff. So they stay put, perhaps even eager to crank up their productivity a notch or two in the hopes that if you do need to trim the roster, they won't be among those taking the hit. But when productivity goes up and the opportunities are stagnant or, worse, contracting, a layoff may be inevitable.
If it's your clients' IT departments that are taking the hit, the possibility of them outsourcing certain aspects of IT operations may actually grow more attractive. Network administration, fleet management, and certain equipment repair could be seen as opportunities. And if new business or requests for bids come your way, be prepared to cut your already thin margins even thinner; a portion of something is far better than 100 percent of nothing.
One integrator friend I talked to was considering chasing new avenues of opportunity. Home automation, home theater, and home networking topped his list. The thinking is that these are not difficult technologies for an experienced networking techie to master, and would not require much of an investment. That may be true, but as consumer spending plummets in the face of skyrocketing food and gasoline prices, it's not going to be pretty. It's not that he wants to expand the business, it's an effort to provide the staff with enough work to keep them gainfully employed. After all, no one enjoys being the angel of death who has to face an employee and tell them you're sorry, but he or she has to go.
In the past, I worked for some companies that maintained a lean staff. So lean, we rank-and-filers, often overburdened with work, wished they'd hire more people so we could stick to a regular workweek. There was a method to what we thought was management madness; these were the last companies to lay off anyone when business slowed.
Alas, no magic answers exist. It's tough all over. I'm driving less and using the phone more.
