I recently attended an all weekend event called CodeCampOz.  Essentially this is a weekend in Wagga Wagga where IT geeks get together to share knowledge around software development.  Readify was one of the major sponsors for the event this year putting some of our limited discretionary spend into a community event – why?  Well to be completely honest because one of our guys Mitch Denny (the main organiser and facilitator) was prepared to put his own money in to ensure it ran.  Clearly that sort of passion should not go unrewarded so we jumped in.  This typifies the type of commitment to our industry that is unfortunately very rare and I have huge respect for this type of behaviour and also for the guys presenting at the event.  Capital ‘P’ Professionalism.

Anyway I was invited to take part in a panel discussion specifically targeting recession survival for Application Developers and Software Development organisations.  In the hour we had we didn’t get to the end of the initial questions so I thought I’d post a blog entry to short form my thinking for those that are interested.   Here we go:

How does the economic downturn affect your business?
Yes – we are not immune.  The recession has lowered our growth from the stellar growth of previous years.  It has put increased pressure on cost containment and of course cashflow.  Really obvious I suppose but the interesting thing to be is that whilst that is the overall effect in fact each State has performed differently and for differing reasons.  For example NSW and WA have gone very well, NSW against the trend.  We are not a great litmus test for the economy in general.  The good news is that our investment is cash information and control systems is paying dividends despite our customers stringing us out - and we are still experiencing top line growth, and I can’t complain too much about that.

What are the things that you think the business can do to survive the downturn?
In fact many of the things I would say here are things you should always do anyway.  Being in a downturn should not be the reason to do them.  Perhaps a downturn just brings them into sharper focus. 

·         Invest in systems that help you manage cashflow and ensure you focus on good invoicing practises and collections. 

·         Focus on the performance of your people.   There is no room for skiers.

·         Keep running your eye over operational costs to make sure you’ve covered every area that will save you money.  In our case the big expense items are people (see performance), travel and communications. 

In business you are either in a growth phase of a retraction phase.  In retraction, think of it as pruning a tree.  If you do it well your tree is ready to growth and blossom well when the spring comes.  If you chop it off at the trunk there is no way it will grow back to its previous beauty.    

What are the things that employees can do?
Once again – the same as you should be doing in normal times. 

·         Focus on your own professional development (like going to codecampoz) and don’t be afraid to invest in yourself.

·         Find out what challenges your business is facing and ensure you help out.

·         Be the most valuable person you can be to the organisation.  No sensible business owner wants to remove great people from their business.

·         Focus on customer service

In a downturn what is more appropriate, contracting or fulltime?
We are all contractors really, it’s just that some of us are on longer contracts than others. 

In our industry though the argument for our customers becomes do I want to use professional services or do I want a cheaper contractor to help solve my problems.  Our smarter customers are looking for organisations to solve their problems in the most cost effective way.  (no surprise there is a big focus on reducing cost right now).  Although it appears counter intuitive the real value proposition lies in professional services.  I’m seeing a general trend for organisations to release there contractors and look to professional services to solve their immediate and most compelling issues. 

What do you think are going to be the technology trends for the next 18 months?
From a completely capitalistic point of view ‘I don’t care’!  Yes I know that is a funny thing for a CEO of a software development company to say. Surely I have an opinion.  All change is good – that’s how we all progress and that’s how IT companies make money.  Straight forward simplistic view I know.

 On a more altruistic level, whatever the technology is I’m hoping it in some way addresses some of the many global issues we face.  Whether that is a global financial crisis, terrorism or poverty I don’t have a favourite.  The world needs innovative solutions to its many problems. 

What are your thoughts around offshoring development resources vs. keeping them local?
The average developer is definitely in constant jeopardy of being ‘offshored’.  To believe that the average  Australian developer is in some way better than the average offshore developer is indeed naive just as it was probably naive of the Pac Brands workers to believe that the company could resist every trend to offshore much of its capability.  If you don’t want to be ‘offshored’ .. DON’T BE AVERAGE!  There is plenty of compelling evidence that high performance local development teams doing a great job will outperform its offshore alternative.