Advances in technology hit industries in cycles. It may take a while for the entire industry to adopt, but ultimately they do. In today’s environment, many companies are facing an interesting dilemma: enormous pressure to improve their infrastructure (created by ever-quicker advances in technology) juxtaposed with equal pressure not to expend capital during a severe downturn in the economy. So even while capital dries up, entrepreneurs in companies large and small are creating the next “state of the art.”

We all know what happens to enterprises that fall behind in their basic infrastructure relative to their industry peers (Circuit City comes to mind—once a leader in retail information systems, it failed to keep pace with competitors). One of my clients had so many “antique” financial systems that its costs had ballooned to worst-in-the-industry before they outsourced F&A to consolidate and break dependency on unsupported software and outdated processes.
If your business underperforms, accessing the capital to improve it becomes increasingly difficult, causing performance to deteriorate further. It’s a vicious cycle and it can take a company down.

Continue Reading "Outsource Capital Intense Functions?"

Comments (0)   | Permalink