Looking back to 2008 - Can the past teach us anything?
I’ve been having conversations about the current state of the economy, uncertainties about inflation, and the impact of both on information management spending. I went back to a post in 2008 on the cusp of the last significant recession, both as a check on my predictive capabilities (always a scary proposition) and perhaps also to help us think through which trends might appear over the course of 2023.
So here goes. From 2008. Be kind.
From my 2008 blog — 7 things to watch for in the coming recession
Like many of you, I am right now trying to figure out the impact of the mess of the past month on my budget plans for AIIM for next year.
I’ve spoken to a number of executives in the industry and we’ve also done a quick survey of some end users and suppliers, and I thought I would share my observations from these.
Alert readers should be cautioned that I am known among our friends as one of the worst stock market prognosticators ever. I very seldom change my 401-k allocations, but on the rare opportunities that I do, I have been encouraged by friends to send out an alert so that they may immediately do exactly the opposite.
So here are my 7 things to watch for in the coming recession.
#1 – Process automation (especially designed to replace lost workers) sells well during a recession. Our industry has the tools to help end users do more with less. Even with this, 25% of end users (N=108) see spending on document, content, records, and business process technologies decreasing next year. New initiatives are particularly at risk. Suppliers still seem optimistic, with 65% (N=60) still forecasting increased revenues for 2009. Gartner has cut back forecast for 2009 IT spending growth from 5.8% to 2.3%.
#2 – Quick and hard-edged ROI is king. For 42% of end users, hard dollar savings are “more important” or “much more important” than 12 months ago. In this environment, massive implementations won’t get done. Nimbleness and quick implementations will be the order of the day.
#3 – Customer loyalty trumps customer satisfaction. Most everyone measures some form of customer satisfaction. In the coming environment, that won’t be enough to get projects through. The suppliers that will come through these challenging times intact will be those whose customers are zealots for them.
#4 – Industries are not homogenous. Even within an industry as troubled as banking and financial services, there will be a lot of variation when it comes to IT spending. Consider a credit union that may have come through the past month relatively intact. Their approach to new IT spending in 2009 is likely to be very different from a “government-owned” bank that has acquired a variety on unstable properties with disparate IT systems that must now be rationalized.
#5 – Good news/bad news for the channel. First the good news. In the environment described in #2, applications and vertical domain expertise are also king. Read this as good news for system integrators and VARs who have their act together and have used the last few years of good time to finely hone their focus. There is also potential good news for service bureaus and outsourcers in the coming tight times. Tight times mean staff is scarce which spells outsourcing opportunities.
#6 – Good news/bad news for the channel. Now the bad news. Go to almost any partner conference in our industry and you will hear that 20% of their channel delivers 80% of their sales for just about any supplier. Recessions are when marginal resellers and integrators are squeezed, and this one will be no exception. What will be different this time is that marginal companies will not only be squeezed on the top line – revenues – they will also be squeezed by their creditors. All that fine print in loan and contractual terms will become bold print and actionable.
#7 – High ticket items likely to be postponed. Among end users with 100 or more employees, there does seem to be a tightening in anticipated spending for high ticket items relative to last year. While the samples are not exactly the same (the sample for my “spot” 2009 vs. 2008 survey was drawn from those who responded to the previous 2008 vs. 2007 survey), the demographics are very similar.
Learning Opportunities:
Feb 21: Webinar — Don’t Lift & Shift, Lift and Sift! AKA: How to Migrate Correctly. Join this session with two of the industry’s standout leaders who will discuss best practices for large-scale, complex data migrations. We will touch on the evolution of digital migration, examine what those efforts look like today, describe the tools and methods to use, and share some real-world examples of organizations that got it right.
Feb 23: Webinar — Clean Up Files Shares Defensibly. 80% of enterprise data is ROT, yet companies struggle cleaning it up from their file shares. Clean-up projects usually fail because no one knows what’s in there and it hasn’t been actively managed for a long time. In this webinar, we highlight a twofold approach to cleaning up file shares. This methodology was developed with a top 5 bank and a large retail chain to be cost effective and defensible, while being successfully implemented across 50,000 file shares and 5 petabytes of data.
Mar 7: Webinar — Can Automatic Updates to Your Records Schedule Create Compliance Risk? Automatically updating your records retention schedule would appear to drive better compliance in a world of ever-changing legal and regulatory requirements. Done incorrectly, these updates actually create compliance and legal risks. Join Contoural for this advanced webinar in which we review key elements of updating a records retention schedule that help – not hurt – compliance.
May 22-24: Have you booked your registration for MER yet? Do it NOW. MER is back in Chicago on May 22-24. Details and speaker line-up HERE.