COOKING UP IDEAS TO BEAT THE RECESSION

Dev Nadkarni

If necessity is the mother of invention, adversity is its grandmother. The rough and turbulent economic weather stirred up like a perfect storm by the continuing global financial crisis is compelling companies and countries across the world to come up with survival strategies that would have been unthinkable even as recently as six months ago.
From adjustments and compromises to co-operation and brilliant ideas for new directions in existing business ventures are all being tried and tested in a bid for survival.
How successful these strategies would be only time can tell – and whether these strategies would prove counter productive when the business climate improves is anybody’s guess.
In New Zealand’s new car business, single brand dealerships are merging into ones that vend multiple brands. Even when the recession began to unfold early last year such a move would have been inconceivable say those in the business.
Marques that take pride in their individual identity and would not be seen with competing brands under the same roof under any circumstances are all huddling together in the same merged dealership.
This is a phenomenon not exclusive to New Zealand and Australia. It is happening all across the world including the United States, the world’s biggest auto market.
Business software that has long existed and served customers well through the good times is being rejigged and new features are being added to help companies counter recessionary trends.
Some of the popular business accounting and customer relationship management software brands in use in New Zealand, for instance, miss some vital features that would be invaluable in recessionary times.
Since the recession unfolded, payments have been late in coming through. Business bodies and forums throughout the world have reported that it is taking progressively longer for companies to pay their bills and settle accounts because of the severe squeeze on liquidity.
This has placed mounting pressure on corporate cash flows necessitating all types of cuts and culls including trimming staff and curtailment of products and services.
The accounting software that many of these companies use are ill equipped to deal with the delayed payment schedules that have now become the norm in the recession.
One smart software firm has seen opportunity in all this and has launched a new software that plugs into companies’ existing accounting and cashflow management software to better manage communication and relationship with creditors with a number of tasks such as specially worded reminders and notifications as well as linking that information to their bankers, and if need be, to debt collection agencies in a timely fashion.
Being a recession baby and in keeping with the reality of the times, this add-on software comes with a ridiculously low price tag.
In fact it is based on a business model whose time has come: SaaS or Software as a Service where the client pays only for the services used.
The software sits on servers of the service provider and the user pays a monthly affordable licence fee like rent to use it.
The entrepreneur who launched this business software plug-in in such dark times when most businesses are holding on to their capital and would not consider investing in Greenfield ventures is already beginning to taste success. Sign-ups are going up impressively according to his company.
A number of software application providers across the board are seriously considering the SaaS model because of its affordability and flexibility as has been demonstrated by the CRM applications industry even before the recession began.
In tough times invention and innovation are the key to the survival of businesses.
The recession has hit discretionary spending the most and that is a big worry for the travel and tourism industry, which indeed is the lifeblood of Pacific Islands economies.
A tourism industry conference early this month to come up with strategies to counter the downturn in visiting numbers could not have come at a better time for the islands’ collective tourism industry.
But even before the conference, one Pacific Island country made the headlines most impressively and has set people talking: The Cook Islands declared late last month that it was unaffected by the recession and was as such not participating in the global recession and so was the place to be if the world wanted to lift its spirits.
At a time when the global media is overflowing with depressing news and analyses of the financial bloodbath, and as countries are beginning to come up with all kinds of funding initiatives to kickstart their economies by raising even bigger debt mountains (which will in every likelihood lead to monstrous inflation in the next few years—but that’s quite another story), here is a small Pacific Islands country that has grabbed the world’s attention by saying it’s not participating in the recession.
For whatever it is worth, the statement has proved an attention grabber. No one would really take that statement seriously but the sheer spunk and the manner in which the country put out that statement deserves kudos.
This is innovation in adversity at its best—even if it sounds like a cute little joke. The fact is that it has grabbed attention and brought focus on the Cook Islands as a great and happy place to visit.
In 2006, Vanuatu was chosen as the happiest place in the world. But the country didn’t quite use that enviable accolade to promote it well.
In fact when I asked a number of people about it in Port Vila¬—even within the hospitality industry—they were unaware that such an appellation had been conferred on their country.
It is great opportunity that has been missed by the country’s tourism authority—and this was the best time to revive it.
Unlike the Cooks, Vanuatu’s title had been conferred on it by an organisation, which is not the same as shouting from the rooftops about your self—something the Cook Islands administration has done so well and to the admiration of many.
The key to real success will be in how the Cook Islands follows up on that strategy to increase visitors and bring in valuable tourist dollars at a time like this.
With the emergence of the happiest place on earth and the world’s first recession free country, Fiji’s long-standing claim to being the world’s friendliest nation is seriously at stake.