How low can your service level go?

I heard a valid question from the CEO of a Software company the other day. Now that the credit crunch is upon us with the current IT budget and headcount freezes, what degradation in IT service level is acceptable today?

In other walks of life, it stands to reason that expectations are lowered when you limit resources. Whether it is London Taxis, plumbers or casualty nurses, less resource means more waiting. So how much longer would you wait for your screen to refresh now that IT budgets are flat? Will you cut your bank some slack if your balance does not update overnight every day?

You see? Service levels in IT only cut one way. Like bankers salaries in days past, they only go one way – up and up. Nobody wants worse IT tomorrow than we enjoy today. No one is telling bank customers they can expect lower service levels. In fact, many expect you to try harder to keep their business in a downturn. As our sage friends at McKinsey tell us “Simplistic [IT] cuts , applied across the board, may endanger critical business priorities from sales support to customer service”.

But there is some good news. Firstly, keeping IT service levels high, or even increasing them, is cheaper now that IT professionals, hardware and software costs are not rising. If you want to be seen as a reliable and customer-oriented organization, now is your time. It is much more efficient to build a strong reputation in a downturn and trust earned now helps justify raised prices later. You may even choose to use your diminished IT resources to reduce your carbon footprint, earning some Green kudos too.

What does this unexpected silver lining mean for those of us in IT marketing? Lead generation of course is tougher, but advertising – even, for the first time, online PPC – is cheaper. So is picking up talent, re-training your existing teams and grafting senior non-headcount expertise from outside the organization with agencies and freelancers.

Tactically (which is arguably the only way to think right now) PR is a great tactic. While in absolute terms, its traditional cost advantage from advertising may diminish, it remains much more appealing. Just because advertising is down, does not mean that reader’s eyeballs are any less eager to consume editorial looking for those elusive Green Shoots.

When, not if, the upturn arrives, few players will be ready if they have no ‘skin in the game’. McKinsey’s words, originally concerning technology investment, are also very true about IT marketing: “Except in the most dire circumstances, turning off technology investments during a downturn is counterproductive. When business picks up, you may lack critical capabilities.”

Bizarrely then, this budget diet for IT marketing will mean higher service levels and more creativity are expected but also a clear chance for some to over-achieve with a lot less resource, while others just attempt the same with less.


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