East of England firms combat impact of recession with focus on efficiency, customer service and innovation
First annual Cambridge Online Systems East of England Regional Business survey takes temperature as UK edges out of recession
Cambridge Online Systems, a leading IT systems and services provider, has published the results of its first annual East of England Regional Business Survey, providing a comprehensive snapshot of how 100 businesses across the region have coped during the downturn, their views on the Eastern region and their business plans for growth and investment.
Businesses in the Eastern region were hit hard by the 2009/10 recession with 18% of those surveyed reporting sales falling by more than 25%, and 26% with sales falling by up to 25%. Not all businesses had a bad downturn, with 28% reporting sales growth during 2009/10 of over 10%. During this period, 49% of businesses introduced pay freezes and 29% reduced staff levels by over 10%. Tough times are set to continue as 17% of businesses still plan to introduce pay freezes and 9% of those surveyed plan to reduce staff levels by more than 10%.
The Eastern region is still a favoured area for businesses, with 66% surveyed agreeing that the region is good for attracting highly skilled employees, but 72% agree that the local road network needs significant investment. Only 42% of businesses believe their council-provided business services will be affected by the Government’s cuts. Respondents were split on the demise of advice service Business Link, 46% agreed Business Link added no value for businesses, but an equal amount disagreed. On the replacement of the regional business development agency EEDA with new Local Enterprise Partnerships (LEAPs), 50% of respondents were in favour of replacing EEDA, 39% were against and 11% were unsure.
A third of businesses see increased price sensitivity as the main factor to holding back their business growth this year as consumers tighten their belts and demand more value. 26% see the health of the wider UK economy as key to their own progress this year.
Blueprint for growth
Rather than reduce staff numbers, focusing on systems and processes was the key tactic being adopted to cushion the impact of the 2009/10 downturn. 59% of businesses reported focusing on improving systems and processes to increase efficiencies, while 50% planned to defy the downturn by getting closer to their customers. This is set to continue as 60% of those surveyed reported they are still planning to improve their systems and processes, with 31% stating they would have focused on improving systems and processes if they had to face the downturn again. 39% of businesses invested in new systems during the downturn ahead of their plans.
Attracting new customers is the top business priority for 42% of businesses; top of the list for business improvements in the next 12 months are:
- Delivering better information for decision making (64%)
- Increasing productivity of back office functions (47%).
55% of businesses use a Customer Relationship Management (CRM) system, with 18% looking to expand or upgrade their CRM system and 12% looking to adopt CRM in the next 12 months. Businesses are using or planning to use CRM to help maximise potential sales opportunities (56%) or manage customer databases (56%).
Investment in IT is holding up well, with 35% of businesses reporting increases to their IT budget and 49% keeping their current IT budgets at 2010 levels. Nearly half (49%) of businesses stated they did not measure return on investment (ROI) on their IT expenditure.
Ray Olds, chief executive officer, Cambridge Online Systems, commented on the findings:
“There is no denying that businesses in the East of England had a tough time during the 2009/10 downturn and that although the current situation is much improved, there are still serious threats to business growth that need to be overcome. The most interesting finding from our research is the creativity and energy businesses in this region are applying to combat the effects of the downturn, supported by improvements in their systems and processes to cut waste and deliver maximum value to customers at a time where price, flexibility and service is paramount.
“Rather than simply cutting staff numbers, businesses reviewed their systems and processes – and invested throughout the downturn. As a business, we help our customers adopt CRM and enterprise resource planning (ERP) systems which are key in helping generate vital business efficiencies. We want to help businesses explore how they can achieve their goals and will share our experience of what we’ve achieved with leading Eastern region companies through upcoming campaigns and events.”
Stuart Lothian, managing consultant, Lothian Associates Ltd, who responded to the survey, commented:
“I think we are relatively fortunate in the Eastern region where a combination of factors help. We have the ‘Cambridge’ effect, with the bio-tech and IT sectors, and we have proximity to Europe and to London, and a relatively strong modern skills base. Businesses in the region are highly entrepreneurial, and with the right product or service, our SME leaders can, and do, go overseas.”
To download an executive summary of the results, please visit Survey_executive_summary.pdf
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