Lean, green firms will survive credit crunch

13 Nov 2008

The current economic climate is the perfect opportunity for firms to get focused on green and lean business principles, says Dave Ferguson, principal consultant with the SAS Institute.

How can a firm justify investing in technology in the current downturn?

One Irish homewares supplier has decided to use technology to forecast and look at the impact of the current economic climate and the housing market downturn on sales. It has been able to forecast with 95pc accuracy what sales will look like in the year ahead.

It has taken into account the reality of the situation around house-building for the year ahead. It also took into account the shocks to the system and was able to output accurate forecasts of what it will sell. It is now clearly able to identify seasonal aspects of its business and be ready for change. 

Firms have a lot on their plates right now just staying in business. How can they also do their bit for the environment?

Economic pressures often lead to simple approaches. Take the Westlodge Hotel in Bantry, for example. It took the view that being green is important, but there’s also a financial imperative behind it.

Management talked to staff about simple measures such as turning off the lights. It also decided it didn’t need a pump to heat the pool. The hotel saved €1,000 a year on electricity.

How does clever use of business intelligence (BI) help a firm save money?

Santander Bank in Portugal used BI to identify customers who were most likely to buy a credit-card product.

By drilling down into customer habits and histories, it was able to achieve a 15pc uplift, compared to blanket marketing. Before this, the bank may have been blanket marketing some 100,000 people, with each letter costing at least €1.50. Now, it is only mailing 25pc of that in a campaign.

From a green perspective, it is not printing and posting literature, but taking a targeted approach to business growth.

Are many firms in Ireland taking this approach of cutting costs and going green at the same time?

Hibernian Health Insurance took an analytical and green approach to reducing costs and being more agile as a business.

It looked at the forms being filled in by customers and decided to move these into a web format so customers could access them online. This has allowed the firm to enhance customer service, but also achieve savings in the amount of literature it needs to process.

From customers’ point of view, this online form suits them better. It’s a nice format and convenient. But, from Hibernian’s point of view, it has allowed the company to identify savings. From a green point of view, by not producing too much literature, it has also prevented the waste of a lot of trees.

Do you think the credit crunch will lead to a downturn in software sales?

In these tough times, businesses can no longer just deploy technology for technology’s sake.

Rather, ways of analysing future demand, and knowing where best to place efforts for customer retention and sales growth, will save money and help firms meet their environmental objectives.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years