Business News & Trends

In many companies, most of the company seems to operate by a completely different set of rules and communicate in a different language than those the IT or computer services sector of the business.  This division is somewhat artificial and partially maintained by the IT people themselves because of a certain culture technical people have about their specialized knowledge and application areas.  But at heart, those strange people down in IT have the same goals as every other business person which is to succeed both personally and corporately in shared projects.

But those of us on the business side of the corporate landscape depend on the computer folks to let us know how things are going with that highly valuable asset that we have in our IT systems, hardware and software.  Most medium to large businesses run very high capacity computers or multitudes of computers connected through a network and those systems must perform at top capacity each day to accomplish the goals of the business.

The upgrade and maintenance budgets for the computers that run your business no doubt represents a fairly sizable percentage of the corporate budget each year.  But because those systems are what make you competitive in the marketplace, that investment is worth the money to assure that the mission critical jobs those powerful systems do get done on time each week and month.
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Without a doubt the single most influential agent of change in business trends in the last ten to twenty years has been the internet.  There is virtually no business segment or market that has gone unchanged by this powerful force.  But of all of the various businesses impacted by cyberspace, the music industry has to the one that has seen the most dramatic change and the greatest challenge to keep up, adapt and survive an onslaught of change unprecedented in its history.

The first major challenge that cyberspace brought to the music business was a complete shift to how music would be sold to music fans worldwide.  In what can only be described as an avalanche, the music buying public virtually abandoned conventional record stores and retail outlets and took the majority of their music purchasing business online.  But this mass influx of business could not be tracked to any one web site that was executing the revolution.  Because of a revolution in how bands and Indie record labels do business online, the music audience followed and began buying their CDs and even concert tickets directly from artists or record labels online and getting those products instantly via downloads.

But as drastic as the market changes this paradigm shift in consumer behavior represented, it was nothing compared to what the internet had in store for the music world.  The next wave of change represented a threat to the music business so serious that it had the potential of putting the music industry out of business forever.  When music consumers began to share digital music electronically over the internet using file sharing software such as Kazaa, Limeware and BitTorrent, suddenly it was possible for a music customer to access all the music they wanted for free by simply downloading this music from another internet user’s computer.
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There is a public mythology concerning the oil markets that has been fueled by a sharp rise in oil prices in the last few years.  That perception is that the oil companies whose job it is to acquire the raw materials to make petroleum products, including gasoline for transportation, are the source of the rising prices.  It is easy for the public to pin the blame on big business.

The truth is that those on the inside of the oil business know full well that the oil business is tremendously cyclical.  That means that the old adage, “whatever goes up must come down” definitely applies to the oil markets domestically and around the world.  The current high prices are more a reflection of problems with refineries and with supply due to tension in the Middle East than it does with the profit objectives of the oil companies involved.  In truth, oil companies have to cope with sweeping shifts in supply and demand and it impacts how they plan their economic futures as much or more than it affects the average consumer.

This upswing in the price of gas is not the first time the oil business has seen huge profits and gains in their returns.  And anyone who has been in the oil business for a few decades knows full well that the current high profitability economy which is benefiting oil companies tremendously will turn the other direction at some point.  Just as there is a shortage due to problems with repairs or temporary shut downs at the nation’s refineries, there will come a time when all refineries are producing at full capacity and there will be a glut on the market which will drive prices down.
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A good Ad agency can take a business and propel its success forward in ways that few other business partners can do.  If the business is one that will benefit from promotion or advertising, the right AD agency bring to the table the talent, the creativity and the resources to put together just the right advertising campaign and then to deploy it in a way that is a perfect fit for the business’s marketing objectives and for the market that the business serves.

But for every success story of how an AD agency took a business to the next level of success, there are plenty of horror stories of terrible advertising campaigns.  A bad advertising strategy not only fail to escalate the sales and success of the business, it may damage the business in the eyes of the consumer and cause damage that could take years to fix.

There comes a time in the life of any business when the decision is made to either employ the business’s first AD agency or to change agencies to find one that can fit the marketing objectives of the company.  To be sure that this process results in one of those success stories and not one of those horror tales, some precautions are in order such as…
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One of the most important talents any management team of a business can have is to be able to detect changes in the marketplace and adjust how the business operates to function in that new market.  Some call it “thinking outside the box” and others refer to this talent as “working with a new paradigm”.  Whatever the term of the day is, without the flexibility to change as the market changes, a business is destined to fade away.

Of the many business and market trends that have changed the paradigm by which business is done in the new century, internet marketing ranks near the top of the most drastic and sweeping change that virtually every business has had to adapt to in order to survive and thrive in the new business world.

At first, most in the business world considered the internet to be a toy and perhaps a good communication tool.  But in the last decade, the power of internet marketing and the need to compete in that marketplace has never been more evident.  And just as business learns new marketing and communication methods when they enter a new market such as learning to do business overseas, the internet has brought with it entirely new tools and weapons that the modern business must learn to use skillfully to succeed in a cyberspace business environment.
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It wasn’t that long ago that a tremendous scare went through the internet community.    The issue had to do with the huge amount of data that can be collected on individuals using search engines online.  This large body of information naturally drew the attention of the Homeland Security agencies who are charged with the job of finding out all they can about potential sleeper cells of terrorism in this country.

The stand off came when the government began to demand access to the search records of all users of the major search engines.  When this upcoming struggle for privacy began to come to a head, many of us who depend on search engines for both personal and business research began to get that “big brother is watching” feeling.

It’s a tough compromise.  We know that our government must have the ability to find and put a stop to security risks that might result in another disaster like September 11th 2001.  But at the same time, Americans are tremendously protective of their liberties, their privacy and their right to be left alone by the government.
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The proliferation of branches of banks in most American cities has become so epidemic that it is hard not to notice the dominance of this kind of business on any street corner in your town.  In many cases, a busy intersection which might be used for retail operations such as fast food restaurants, cleaners, gas stations and quick stop stores has been taken over by banks.  In some cases you will see three of the four corners of a popular intersection in town occupied by different bank branches.

It makes you wonder, just how many banks do we need in town and why are the banking institutions spending so much money to put branches in virtually every location that has open space?  It is a business trend that gets your attention and it makes you wonder what is driving this bank explosion.  After all, in many cases there are not more customers for those banks.  You have to wonder how banks can cost justify such expansion when the growth of bank branches is not even in step with population growth in a given community.

The phenomenon has become more profound in the last ten years than ever before.  And much of it has to do with changes in how banks are regulated and the financial objectives that these branches are targeting, financial objectives that bring big money to the banking institutions spreading all over town.
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It is a well known axiom of doing business in any industry that those who do not stay in step with the times will be those companies that eventually die out.  There is no place where that truism is more evident than in the way that companies in virtually every business sector are finding to integrate an internet marketing strategy with their traditional communications and to provide the public with an internet “presence” to supplement their public profiles in other venues.

Of course, the value of the internet for sales and promotions has been well known in the industries that service the youth markets and for the companies dealing with entertainment and the arts.  Because the internet is in virtually every home and even now on hand held devices of every description, the access it gives to reach a target market are phenomenal.

This explosion of an entirely new marketing model has introduced the world of business to entirely new paradigms of marketing and new ways to achieve greater market penetration and sales.  And so any business who has had to get out on cyberspace to keep up with the competition has already had to learn a whole new vocabulary that has grown up around the internet marketing phenomenon.  Now terms like “Search Engine Optimization”, “Auto responders” and “Viral Marketing” become important and powerful tools to any business that wants to tap the power of the internet to increase sales.
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It is a well-understood axiom of the business world that there are two ways to improve the bottom line of the business.  Stated simply, those two ways are to make money or to cut costs.  Now no business can cost cut their way to profitability.  But by the same token, waste and excessive internal costs for any business can eat away any profits that business is enjoying.  So to get ahead in a competitive business environment, both methods must be employed.

When a business turns its eye to cost cutting, there is a stated or unstated business objective that the business owners will discover significant bleeding of revenues that are going on within the systems of doing business.  So if those systems can be improved to eliminate that waste, the business would literally make money from the inside out because the overhead of the business would drop so dramatically.

The usual progress of such a cost saving campaign by a business is to find “the low hanging fruit” first.  By that we mean that in order to satisfy the demands of management, middle management will identify superficial savings in hopes of satisfying the requirement.  Hence switching from disposable cups to mugs or cutting back on break room amenities often go on the chopping block first.

Sadly, while there may be some superficial savings to be found in such places, the significant introduction of efficiencies for any business lie at a deeper level and take a more in-depth process of locating problems with how things get done internally.  The methodology of finding these “money pits” within a business is often called “Process Improvement.”  The concept of process improvement is to diagram a particular business process from inception to completion and document the stages it goes through, the handing over of authority for the process and to pin point places where inefficient methods are causing excessive cost in executing that process en route to the final stage of process completion.

Routinely, the areas of business structure that most often identified as being candidates for a process improvement examination are…

*    Excessive overhead between departments.  Departments within a business are notorious for taking on the atmosphere of a fiefdom and becoming resistant if not suspicious of other departments in the same company.  When that happens, department managers will introduce paperwork and unnecessary processing to cause “work” to move to his or her department from another or for completed jobs to continue along their path.  This excessive overhead can be costly at the department level and bog down the business as a unit enough to actually reduce the profitability of the organization.

*    Communication problems.  A business process moves through the organization as each department or entity adds value to the process through to the completion of the job.  However if communications between departments or people along the process chain are flawed, a process can grind to a halt and wait for hours if not days before the missed communication is discovered and the work is put into the cycle to be completed.  This slow down or break down in communications can be a tremendous drain on the company.  To correct the problem, modern tools of communication should be reviewed so each significant person along the chain is quickly made aware of work that needs to be done and can signal to the next agent that their step is complete and that the process is moving to the next stage.

*    An inefficient IT infrastructure. Out of date computer programs that are not integrated with each other cause needless work to be done to take data from one system and moving it into the next computer program only to be entered again at the next stop along the chain.  Standardization and integration of data and systems will introduce huge efficiencies to the process.

By streamlining the process of moving a business requirement from inception to conclusion, we can remove much of the inefficiency and waste that has become inherent to that process.  We can introduce up to date integration designs both at the IT and process level to quickly move the process from one department to the next upon completion.   The outcome is a streamlined organization that is no longer “bleeding money” due to inefficiencies and as such is making money “from the inside out”.

Perhaps you have followed the trend in business to create an internet web site for your business that can be used to supplement your marketing efforts.  If so, you have joined the momentum to create a corresponding “place” in cyberspace that can be used to reach customers online.  The need for such an internet presence is entirely market driven.  Internet sales have soared, particularly in certain market segments and more and more, the first place people go to in order to learn about your business is the internet.  If they find a well designed web site that is full of features, that works fast and draws them in, that can be a tremendous tool for promoting your business.

When you set up a marketing tool outside of cyberspace, the first concern is how will that new marketing effort get noticed.  So we are drawn to places where there is already an active traffic of people who would qualify as our customers.  That may mean putting up a billboard where it will be seen by people going to work.  That target audience may be the best population to respond to your message.  Or if your business appeals to youth, advertising on MTV or on popular radio stations is a natural place to put your marketing money because the traffic is already there.

We have to approach the internet differently.   Yes, the traffic is already there but we have to enter the world of cyberspace marketing with a different kind of strategy so we can reach the customers who are traveling certain “internet roads” and make sure those roads lead to our web site.
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