It is well accepted today that many of the global economies are facing a slowdown. The combined effect of the mortgage crisis, energy prices and consequent meltdown of Wall Street have taken their toll as well as the resilient economies like China and India. The financial services industry is worst hit, while other sectors including IT, auto and retail are on the downturn.
To beat a recession, companies must manage through it with minimal injury, usually through cost-cutting. However, it is also a time to emerge stronger, growing into new markets, strengthening supply chains and developing innovative business models. Whatever companies’ strategic objectives, communications technologies and services can play a critical role in helping corporations navigate through the uncertain times as well as prepare them for tomorrow.
Conserve
Traditionally, businesses have focused on cost reduction during a recession. Global expansion and collaboration do add new administrative and marketing costs and create a situation where businesses have to find new avenues for improving profitability. There is also a need to be increasingly conscious of the impact of business activities on the environment. Conserving energy and carbon emissions, along with costs, is the primary mantra in current times. The emergence of hosted or managed services for communications services and applications enables businesses to expand their capabilities without many of the associated costs and overheads.
Enterprise applications including enterprise resource planning (ERP), messaging and security offered by service providers, ensures that all stakeholders can have a seamless experience, irrespective of location and access mechanism. Managed services, such as messaging and security, not only reduce operating costs but also free up valuable capital resources. The managed services model creates greater focus on core, market-facing business strategies and processes by letting specialist service providers manage the non-core activities. Similarly, data centre consolidation and outsourcing can provide major savings through scale of real-estate, power and management. Furthermore, virtualisation provides ‘multiplier’ savings in terms of capex utilisation, flexibility, power efficiency, disaster recovery efficiency, and so on.
Collaborate
Developing countries, growing at more than 8.6 per cent per annum over the next five years, provide significant new market opportunities for large corporations that face demand saturation in the developed countries. This rapid growth, in addition to the fact that 80 per cent of the global population will be in emerging economies, makes these markets a “must-enter” for most multinationals. Global expansion will result in globally distributed teams based on the availability of best resources to run global businesses. It is critical that companies create real-time collaboration mechanisms across the extended organisation for the creation of new products and services, taking them to market ahead of competition.
Global virtual private networks (VPN) using MPLS and global ethernet solutions enable the creation of secure, multi-location wide area networks with high levels of scalability and flexibility. Bringing new offices online or increasing bandwidth between them or implementing a new application globally has become almost as simple as installing a plug- and-play device. Additionally, businesses can choose from a variety of platforms, including Telepresence, next-generation content delivery networks and converged services, to engage more effectively and in real-time with their stakeholders.
Innovate
It took the telephone nearly 100 years to become a globally adopted and mainstream product. Today, new services and products are launched in days and reach the peak of their life-cycle in just months. The rapid shortening of the consumer adoption cycles creates new opportunities and challenges. The willingness of customers to try and accept new products (and providers) enables companies to enter new markets and challenge incumbents. On the flip side, companies now have very short time-windows to launch services and recoup their investments, before an alternate product comes along or consumer preferences change.
High bandwidth backbone, access networks and huge, cost-effective storage are providing the impetus for digitisation and online distribution of most forms of content and information. Education can now be disseminated in a highly interactive and customised manner, across multiple locations using Internet protocol-based training and conferencing solutions. Content providers can reach their customers much faster. For instance, an online gaming company with an appropriate CDN solution can deliver new games four times to 10 times faster than without.
Voice and basic data communication enabled the first wave of outsourcing – contact centres and transaction processing. With advanced video communications facilities, business process outsourcing can now be done for activities that require intense, face-to-face interaction and collaborative knowledge sharing. Wireless and mobile technologies have also helped expand the reach of services to markets that were earlier out of bounds. Banks, particularly in emerging markets, can now use mobile ATMs with wireless connectivity to open up whole new, untapped rural markets for financial services.
Businesses have a variety of choices, in terms of both services and service providers. A communications service provider can be more than just a vendor.
The world has seen more changes in this decade than it has ever seen in the past. Given that telecom is still a reasonably regulated industry in most countries and that scale, infrastructure ownership and domestic presence have a crucial impact on service delivery capabilities, IT managers will need to make the trade-off between global coverage and in-depth, local presence in key markets / destinations. In these times of uncertainty, it is important for IT managers to partner with service providers that are financially robust and offer a truly global presence.
Collaboration and innovation are the heartbeats that will drive this new-networked world.
Srinivasa Addepalli is senior vice president, corporate strategy, Tata Communications.
