Rainmakers perspective… emerging trends in the Chicago Mid-Market
Dear Reader,
I was having a discussion with a client, someone I have worked with for several years. He is the IT Director for a mid-market manufacturing business in the Chicago suburbs. His story is a common one – business has been rocky… better than it was… not as good as desired. Management is uncertain what the future holds – as a result all spending is on hold. The wait & see game is on!
As Rainmakers begins our 5th fiscal year (July 02) we realize the trends we are seeing are a direct by-product of a major epoch shift, or Paradigm change in the world. Things will never go back to the normal we once knew. Y2K was a unique milestone in history. Never before – and probably never again will the whole economy be forced into making a buying decision related to a specific point in time. This has caused several logical consequences in our economy:
- Y2K created a “Sellers Market”. IT vendors and service firms experienced a bonanza during the late 90’s up through 2000. The tremendous growth and profits created the belief in many IT businesses that they had some unique competitive advantage. They became “starry eyed” with rapid expansion, IPO’s and continued success. The fact that in most cases these firms had no real competitive advantage or differentiator was lost in all the sizzle.
- The dot com bubble (promoted by IT and Wall Street) obfuscated the fact that businesses invested heavily to cope with Y2K and, in most cases, saw little if any ROI from these efforts. People’s natural tendency is, after such an experience, to cut back and “tighten the belt”.
- The market collapse was in full swing prior to 9/11. No question that the pendulum has swung full circle – we are now in a “Buyers Market”.
- In difficult markets marginal players fail. The demise of many IT firms through bankruptcy or merger is a result of these firms having poorly defined value propositions and no real competitive advantage.
- The experiences gained by businesses over the past decade of technology usage and failures (lessons learned) have fundamentally changed the manner in which technology and IT services are purchased, especially by mid-market firms.
- “People’s” pain thresholds have risen (the pain has to be greater to get businesses to act). Management is forcing extensive cost-justification and business case explanation prior to committing resources to any project which will cost money. Businesses appear much less willing to take a risk!
- Group and committee decision making is much more prevalent. This creates long, drawn out sales cycles for both large and small projects.
- Technology is not the dominant decision driver as in the 90’s. Process optimization and relationship management improvements are more typical the drivers for decision making. Technology, at best is an enabler, not the end.
- Those firms that “fixed” existing systems to handle Y2K are beginning ERP replacement projects – but with no drop dead dates the sales process is long and laborious.
- IT service businesses that focus on specific niches or value-propositions where their knowledge of industry and technology will provide some competitive advantage will prosper. Those “we do everything for anybody” IT firms will become extinct. Simply having bodies available with some technical skills is no longer a viable business model.
- Continuous improvement is the mantra for those businesses that want to “pull away” from the pack. The need to continually change has become a fact of life!
Businesses in general have become very dependent upon technology and technology has become more and more complex to deploy and support – even as it has become supposedly easier to use. Mid-market firms, because of their “lean & mean” staffing philosophy, are being challenged to cost-effectively deploy and support this technology. We see a trend where the mid-market is beginning to investigate various outsourcing, flex-sourcing, ASP’s and other models to deploy and support technology without greatly expanding their internal IT staff.
What are people talking about?
The wait & see posture of many firms is creating a “pent-up” demand for improving business performance. Several areas appear to be the primary focus points:
Ø Use information more intelligently. Business Intelligence, Knowledgebase, Data Warehousing, Market database segmentation and other “tools” are examples of businesses trying to get value from all the data. Extrapolation of insights and knowledge from information so that people can make intelligent decisions, quickly, is the goal.
Ø Reduce cycle times and optimize processes. Supply chain optimization both from the procurement/production and client/channel management angles are priorities. Quicker, better, cheaper is the goal.
Ø Becoming easier to do business with to enhance customer and channel relationships, protect margins and raise competitive barriers is a common goal.
We believe that once businesses get some confidence that the “bottom will not fall out” from under them these pent-up demands will drive various initiatives whose objectives will be to accomplish one or more of the focus points described above.
The Rainmakers role:
We believe the people responsible for making decisions in Mid-Market businesses often times need help, especially when many options are available, the people are unfamiliar with the tasks at hand or the resources needed are scarce and hard to find. In essence Rainmakers helps Management in four ways…
ü Need to figure out What to do… how to utilize best practices, technology and human resources to enhance your competitive advantages while delivering an appropriate ROI
ü Need to figure out How to do the What… what technologies, resources and processes will be required; how to overcome your organizational change obstacles and eliminate the gaps
ü Need to do it… what specific technical, product, subject matter expertise and project management resources are needed.
ü Need to support/maintain/renew it… how to keep it running while continually making small enhancements at the lowest possible cost-of-ownership
Rainmakers Consortium consists of various experts in Information Technology, Production/Operations, Sales & Marketing, Financial and Human Resource areas. Our Partners are independent firms, typically local boutique operations, where their value propositions and expertise are well documented and proven.
We understand how the Mid-Market wants to do business. We also promise what we deliver… and deliver what we promise! We invite the opportunity to prove ourselves.
Thanks for your time.
Jon C. Liberman
Chief Rainmaker
If we can be of service contact us by
….. Calling Rainmakers at 847/251-3327
….. click here mailto:jon@rainmkrs.com
…..Check out our web site www.rainmakers.us
