Over the last year, the global economic downturn has resulted in companies facing increasing pressure to survive, says CA senior VP and GM for EMEA Patrick Starck.
He was speaking at CA World 2008, in Las Vegas, yesterday.
"Take a look at financial markets," he explains. "It is more expensive these days to get money to sustain business. It`s more difficult nowadays to get money for investment in new business, or to grow existing businesses. Making the right investments at the right time has become crucial to companies` survival."
He says consumers are spending less, the world is in a recession, experiencing negative growth. Starck says this results in higher pressure. "North America has seen a 30 % to 40% negative growth, Europe is starting to see the same pattern. Manufacturing in Europe is seeing a negative 20% to negative 30% growth," he says.
According to Starck, the social and employment crisis is growing and in turn, the speed of consolidation is growing, especially in financial markets. He says we are now seeing the same phenomenon in industry and manufacturing in general.
"At the same time, constraints are growing. The financial crisis triggers more regulation, grown by pressure in all segments. New regulations force companies to update systems to be compliant. To summarise, the market is more unstable, less secure and more fragile."
Starck says, during these times, mistakes that were recoverable a year ago, can kill a business today, or certainly some of its executives. "Thus it is vital for companies to optimise their environments; avoiding fatal mistakes is key. We all know with a recession, there is an end, what we don`t know is when. Winners will have anticipated correctly, and made the right investment."
Reduce costs
To do that, companies must reduce costs, he says. "Not just by layoffs, they need to re-engineer processes, look at operations, suppliers and end-users. (Companies) may have to restructure or change the organisation. They also need to look at all opportunities. Companies must improve control, identify risks, evaluate what acceptable risk is. Organisations also need to increase market intimacy, to know their customers and stay close to them. They must select the right investments and select the criteria to determine what the right investments are."
He cites the top priorities as optimising IT investments, identifying which investments will bring value to the business and at what cost. Another important factor, he says, is identifying milestones and knowing when it is the right time to stop investing in a certain project. "Enable governance of risk, have the right rules and regulations in place and the right controls to mitigate the risk."
All these points have to be linked to the business and accepted and adopted from the top of the organisation down, says Starck. "Do things right, improve efficiency. Do the right things, improve effectiveness. See what will bring better results."
This is where he says CA comes in. "Companies need to allocate resources based on demand and use 100% of their physical resources and virtualise where necessary.
"There is no doubt we are moving towards a virtual environment, companies need to utilise physical assets to the maximum, and governance and security are vital to this. This is what CA does. CIOs cannot afford not to invest in governance, management and security. In order to succeed in these difficult times, companies need to do more, with less."
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