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December 24, 2008

Adapt, Evolve, Overcome

Change is part of life, unfortunately sometimes it takes a dramatic crisis like this one to hammer that point home. The hard times will get worse before they get better, this much is obvious. Your clients will either adapt and evolve, or they will cease to exist.

The media industry is a sad example of this effect. As the tide goes out it will drag a lot of the industry with it, and the high rocks that remain will be those hat have been able to adapt.

They will have worked out how to leverage their relationships with their readers and how to tap into the new ways of information transfer.

As your clients evolve you are faced with either a gigantic opportunity - or the end of the road for your own business.

Who's winning so far?

Some interesting figures out this quarter. KPMG reported a 14.5%  increase in revenues for the quarter to September 30, and Accenture reported a profit increase of 27%.

On the enterprise software side of things Oracle managed a 5% increase in revenue , but missed analysts expectations, posting revenue of $5.6 billion against expectations of $5.84 billion. While Societe General has issued warnings on SAP stock , expecting them to issue a warning in January in response to hardening financial times.

SaaS leader, however, reported a whopping 43% revenue increase compared to last year. A record quarterly revenue for them.

What's going on? Some of the giants are faltering, others are surging, and some upstarts are starting to shame the business software industry standard bearers. Aren't we supposed to be in a recession?

"What's happening" isn't the right question, the right question is: How can consultants tap into this?

Trends for 2009

Credit is dry, demand is shrinking, and our clients are desperately looking for ways to sustain their return on assets. They have two options, swimming upstream to capture markets in faltering conditions, or reducing spending.

And I think we all agree that reducing spending is the key for at least the next twelve months. We have spoken here before about ways to rapidly reduce costs , but there is a strategic angle here also.

Companies are moving rapidly away from high cost, kill-all projects, this is a trend that is only going to continue as the crisis deepens further.

US bed manufacturer Sleep Comfort recently put a stop to all work on an SAP project as part of its moves to dramatically slash costs. Similarly, anybody involved in expansion projects, like the entire Oil Sands  industry of Canada, are feeling the same contractions.

The message is clear, expansion is out, kill all gigantic projects are out - and the time honored tactic of consultant "jobbing" is back in.

High volumes of small jobs that add high value. This means a change in focus and energy of the sales teams, a change in delivery models, and possibly different consultants. SaaS is surging, why? It is cheap, reliable and fast to implement.

All the elements of a consulting "job" as opposed to the arcane arts of the technology project. They are focused and the results appear in months or weeks, not years after the problems have surfaced.

Another strategic shift is to look for sectors that actually benefit from a faltering economy. Accenture CEO recently said
"There's not a board of directors out there who isn't asking the management, have you considered sourcing alternatives?"
I am no technology guru, but I am sure that Accenture is not the benchmark for cost effective outsourcing, and I am sure that technology will provide somebody out there (maybe you) with the means of cutting into this market somehow.

You have two choices. Continue to pitch what you were pitching in the belief that the market will come around to your way of seeing the world; or you can adapt to the way the world really is.

You can continue to sell large scale technological solutions, or you can cut them down into bite sized chunks that can add immediate value to your clients.

The thing you fear is what you should become.

Don't wait for somebody to enter your market with a 10% value in 30 days offer - you should invent it first!

Don't hope that your clients never switch to SaaS - introduce them to it.

Don't fear smaller, more agile competitors offering niche services underneath your brand umbrella - beat them to it!

You can adapt, evolve and overcome (As IBM did) - or you can become a cautionary tale.