The Credit Crunch impact on how businesses use IT and software applications

The term Credit Crunch is a turn of phrase that we’ve probably heard a million times in the past six months as we start to adjust to the current economic downturn.

Every week, we’re waking up to more gloomy news as we hear of companies failing, job losses and banking crises. Consequently, it is now more critical than ever for businesses to watch their expenditure. Some overheads are simply unavoidable.

Others have already been pared to the bone. Right now, cutting costs is all that matters and it’s imperative for companies to explore all avenues of how they can reduce the amount they spend on running their business.

One area where businesses can save significant cost is IT. We are all aware of the crucial cog technology plays in business operation and productivity, but many firms are missing out on huge cost savings by not taking a closer look at their IT system and how they can cut expenditure not only during this difficult economic time but permanently.

By looking at their business processes more carefully and asking if the software applications they are currently using really are providing the best value for money, businesses can benefit from significant cost savings, which can be spent on business development rather than operation.

Do businesses really need to pay for that eye-watering annual licence fee for a third party software application which, whilst essential, stands idle most of the time? Wouldn't it be better if the business only paid for the actual usage of the software?

The alternative is the SaaS (Software as a Service) model. Instead of buying a software package outright, businesses are now realising that it is far more cost effective to use the software 'on demand'.

This is possible because the SaaS software runs on the vendor's own servers and is accessed by customers over an internet connection when required. This 'pay-per-use' model would be extremely difficult to implement using conventional locally installed software.

The software in question could be anything from a full scale CRM system to an essential utility used to carry out validation checks, for example.

The ‘pay as you go’ opportunity that the SaaS model provides enables businesses to manage costs more effectively, and make cost savings based on usage amount. As such, it’s a good way to reduce cost without reducing productivity.

SaaS has been around for a few years now, but the Credit Crunch could make this technology the norm, rather than the exception – to the benefit of businesses of all types, size and structure.