By
Sam Sliman
President,
Optimal Solutions Integration, Inc.
Even
the most dour economists agree that the present economic downturn will
eventually end. The more pressing and difficult questions are when will it end
and how long will it take for businesses to return to sustainable growth?
Part
Two of this article focused on how SAP helps companies with the early
detection, rapid response and creative adaptability to the abrupt and
unexpected economic contraction we’ve recently experienced. In this third and
final installment, we’ll look at the role SAP will play in helping companies
worldwide return to sustainable growth in record time.
SAP customers will return to
sustainable growth in record time
According
to the latest Federal Reserve reports, the recession we’ve been in since
December 2007 is the longest U.S.
recession in more than 25 years. On a global scale, according to Fed Chairman
Ben Bernanke, ''the world is suffering through the worst financial crisis since
the 1930s.''
On
a more upbeat note, during a “60 Minutes” interview this past Sunday, Bernanke
predicted, fairly confidently, that the recession will end this year. On the
question of recovery, however, Bernanke was less definitive with his timing,
stating only that he expects that the recovery will begin next year and “will
pick up steam over time.”
Obviously,
a recovery of any magnitude hinges heavily on getting the financial system
stabilized and working normally. Our financial system meltdown is
unprecedented. The drastic means being employed to get it back on track are
also unprecedented. Ironclad predictions about the future of our financial
system are best left to accredited prophets. But measured optimism should not
be ruled out, and businesses that have taken measures to prepare for a return
to growth will have a significant competitive advantage in the years ahead.
In
the past, recovery from an economic recession for many Fortune 1000 companies
was an arduous and protracted process. Lacking accurate, real-time visibility
across global supply chains and the IT infrastructure needed to make fast
operational adjustments, retailers, manufacturers and producers of all kinds
found themselves stuck with too much inventory when an abrupt drop off in
consumer spending struck.
Because
of this, instead of being positioned to capitalize when consumer spending
picked up, these often-bloated companies found themselves still mired in the
process of making the profit-squeezing price cuts and painful size adjustments
needed to clear their shelves of stockpiles and get their organizations
right-sized.
Today
is a different story because today 80% of Fortune 1000 companies run SAP
software. A sizable portion of these companies, as well as many other large
companies worldwide, are in the final stages of implementing SAP ERP systems
and SAP Business Suite applications. This is a major difference. Drawing on the
full benefits of SAP, today’s businesses are equipped to return to sustainable
growth at a pace much quicker than that which was possible during previous
economic downturns.
Part
Two of this article explored how SAP systems played a central role in
helping companies detect and rapidly respond to deteriorating economic
conditions. In stark contrast to past capabilities, businesses with SAP
deployed quickly adjusted cost structures to volume fluctuations, identified
and eliminated inefficiencies, and made operational adaptations that bolstered
their ability to weather the economic storm.
To
be sure, getting right-sized was painful for many businesses, but it is also
true that for many companies the responsiveness and adaptability made possible
by their SAP systems spelled the difference between survival and insolvency.
That
adaptability will serve organizations well when conditions improve. The same
ability that allowed SAP customers to respond quickly to declining demand will
also serve to help them sense upticks in activity. SAP customers will be able
to capitalize on the opportunities by immediately activating their supply
chains, producing new product, hiring more employees and delivering the goods –
all in record time. We now know this works and the upturn will again affirm
that the investments made in SAP were more than worth it.
Viewing
accurate information and monitoring critical KPIs through an array of
performance management dashboards and reliable BI reports, businesses with SAP
will instantly see the extra orders and deftly make the adjustments needed to
facilitate the sharp increase in demand that will surge through their global
supply chains.
As
right-sized, highly responsive organizations closely attuned to dynamic market
conditions, SAP customers worldwide will reap the rewards of continual
business-process innovations that distance them from their less nimble
competitors and accelerate their record-breaking return to sustainable growth.
What
impact will this have on the overall economic recovery? It’s hard to say. But
when one considers SAP’s expansive global reach, 80 thousand plus customers,
multi-industry penetration and proven capabilities (See Part One), a safe bet
would be to assume that businesses relying on SAP to resume rapid and
sustainable growth will constitute much of the ‘steam’ Bernanke is counting on
to lift the global economy.
Optimal Solutions
Integration Inc. is a premier SAP consulting firm and authorised SAP channel
partner. Article first published March 2009. http://optimalsol.com/
