In times of economic crisis… don’t stick your head in the sand but HEAD FOR THE CLOUD!

It has become apparent to me that Australia is still very much the lucky country. Yes we like to complain about the economic situation and the fact that the interest rates are around the 8% at the moment but overall I think we’re still going strong!

Why am I saying this? Well, I have spent the last 4 days in Hawaii and have experienced firsthand that the situation in the US is much worse than what is happening in Australia. And it is not getting better either… it will get much worse!

The resorts on the Big Island are at approx. 15% capacity, where 60% is needed to break even; many restaurants, bars and resorts have already shut their doors and the big story on the news this week is that most of the commercial rents will double – if not triple- in the next few months. This will have a major impact on the overall of the state, after all: it’s main source of income is tourism…

Australia is fairly sheltered, we have a lot of resources in the ground and there is always somebody who finds it… last week in the BRW young rich list the number 1 person is 32 years of age, came from nowhere and has now accumulated approx. 440 million dollars in personal wealth in the last 12-18 months. How? By finding coal (I think it was coal, but really – it could have been anything) and selling it to China… nice little ‘backyard operation’ which will result in a nice income tax bill no doubt… which means more money in the government account to support the country etc.

 

So, what does this have to do with ? Well, not a lot at first glance and everything when you think about it.

I run my  with my husband and this morning over breakfast  (CEO council 🙂 ) we were discussing how to prepare the company for things to come; the importance of cash in the bank at the moment and the ability to change gears and directions very quickly. It also brought to light the importance of a ‘lean’ business model: outsourcing your non-core activities and avoid purchasing assets that don’t actively create revenue (example: IT systems and solutions). When we focus on the IT solutions: we still want it to be scalable and have the ability to support the company’s business processes – no matter where the business will take us!

This led us to discuss cloud computing and Software as a Service solutions. When offered professionally, solutions are probably the way to go in the near future. They offer IT products on a ‘pay per use’ basis without the upfront expenditure (and depreciation) of purchasing expensive software and IT assets.

However, before doing this you will need understand WHY you need the IT solution in the first place and you need answers to the following questions:

1.     What is it supposed to do?

2.     Which business process is it supposed to support?

3.     How many people use this system and is the subscription per user or per concurrent user?

4.     What is the maximum number of users they support?

5.     What IT infrastructure is expected to be present in your offices to make the SaaS solution work best?

6.     What IT knowledge is expected to be available in your office.

7.     What type of support does the provider offer?

8.     What happens if the software doesn’t work, or doesn’t do what you expect it to do?

All in all, I don’t think these are difficult questions to answer and it sure beats having a lot of your cash tied up in purchasing the software licenses upfront! You’re much better off spending that type of money at the things that you’re really good at: development of your products and services and making money with them!