Recession Reality Check

Will Spending Cuts Today Bite Us Even Deeper Tomorrow?
NEW YORK--(Business Wire)--
The following is an opinion editorial provided by Daniel DiSano, president and
CEO of Axispoint, Inc.

"Glimmers of hope" or not, tough economic times mean businesses are weighing
deeper spending cuts now while hoping for a broad recovery next year.

While the target list for spending cuts stretches long, each of us must
demonstrate a more balanced approach when evaluating spending during a down
market.

Technology is certainly one item on that list - and an expensive one at that,
which makes it an obvious target for cuts. Yet from a practical standpoint,
technology is an enabler that helps ensure smooth, efficient operations
regardless of the prevailing economic conditions. It can also help reduce costs
in other areas, yielding a net gain for the organization.

Though information technology leaders are faced with budgetary pressures just
like everyone else, companies need to remember that technology is an
underpinning that helps drive efficiency and growth. As such, those
organizations need to measure any short-term line item cuts against the needs of
the business, both now and in the future.

This worrisome lack of a balanced approach to determining spending cuts compels
me to address something even more alarming: Among organizations everywhere, I
see two recession-spawned mistakes being made.

Mistake No. 1 (By executives from "stable" companies):

These executives wait too long to reduce costs while also fail to properly
invest in order to achieve better efficiencies with their current investments.
Instead of always being cost conscious, they`ve waited until a recession has set
in to make cuts involving less-critical, "good-to-have" cost centers. These have
been the areas benefiting too few users or a far too limited sector of the
business. Managers there hunker down, reduce costs and watch their flanks.

If these firms were being managed properly, each would have been improving
efficiencies years ago. That includes reducing less-critical assets. By reacting
too late, they`re placing their firms in jeopardy.

Mistake No. 2 (By executives of companies whose history includes upheavals):

Others often overreact and cut too much when a recession hits, making broad
expense reductions in line with some near-term, often poorly-conceived recession
strategy. They don`t really gain anything because theirs is a plan that hasn`t
taken the long view.

My concern is when the market improves, they`ll be in an awkward position and
forced to spend themselves back to normalcy. They too put their companies in
jeopardy because their bounce-back strategy is to overspend next year to get
back to the status quo, costing them more (in dollars and market position) in
the long run.

During a tough 2009 and beyond:

1)Scaling back wholesale on vital sectors such as technology isn`t going to
solve anything. unless you`re already in trouble.

2)Strengthening your core and staying close to customers are what count the most
today. Be there. They`re counting on you.

3)If your market sector is down 10 percent but you are growing, you could be
enjoying the Holy Grail because you`re already better positioned for the coming
upturn; your competitors who`ve scaled back must re-spend to catch up.

4)Keep your focus on business needs, on reducing costs involving your
"good-to-haves," on boosting efficiencies. You`ll fare better.

5)Continually re-budget and consistently reconsider all assets regardless of
whether we`re in a recession.

6)IT support and "S.W.A.T.-like" IT consultants which stay sticky will be the
ones having agility, those helping solve true business challenges and those
consistently delivering on the must-haves.

7)When it comes to technology, view it as an enabler for growth and to help
reduce overall costs of your organization through automation, better
efficiencies and optimization.

The recession is real, and difficult. However, every business leader can achieve
a brighter future not through a "one project and done" mindset, or with short
term gains but by continuing to construct the building blocks leading to their
long-term objectives.

It`s how I lead our company and how I see the future of American business.

Daniel DiSano is president and chief executive officer of Axispoint, a
full-service technology solutions provider and a Cisco Silver Certified Partner.
Axispoint specializes in providing: technology and business process consulting;
application development; network infrastructure; wireless solutions; and IP
Telephony/Convergence to a wide range of industries and clients. Axispoint works
in close partnership with its clients to provide the right customized solutions
that add real economic value. The marriage of strong network capability with
software expertise and technology management enables Axispoint to offer its
clients a total integrated solution.

Axispoint
Siobhan Walsh, swalsh@axispoint.com
212-920-2615

Copyright Business Wire 2009