What could a possible strategy in the software industry look like?
The coronavirus crisis is a global challenge. The further development or even an end is not foreseeable, but the end of the lockdown marks the start of a new phase towards a new ‘normality’. When and how quickly the economy will recover is difficult to predict for all sectors. This is all the more true for companies in the technology sector, as many are internationally oriented. Accordingly, both medical and economic developments abroad have a direct impact on German companies and the German branches of international companies.
Pragmatism, sensitivity and creativity
After the first wave of the crisis, when the rapid spread of the virus overwhelmed many companies, a second wave will now follow in the coming weeks. The challenge for management and executives is to lead companies through the crisis with pragmatism, sensitivity and creativity before the new ‘normality’ sets in. When interacting with customers, creative approaches are required that make it possible to implement projects despite the high level of uncertainty. When dealing with employees, managers need to “hold their nerve” and not pass on the pressure they feel to their teams in an unfiltered and unconstructive manner.
“Most companies plan at short intervals – usually monthly – and have several plans: worst case, most probable, best case.” Explains Dr. Monika Becker, Business Unit Director for the Software division at HAGER Executive Consulting and Sector Head IT & Digitalization at the partner company, Horton International.
“In the long term, most companies in the software industry expect the corona crisis to have an intensifying effect on digitalization. Companies are now realizing if they have not done their “homework” in terms of continuous digital processes and process automation. They will make these topics an even higher priority.” Dr. Becker continues.
The coronavirus crisis has made everyone very aware of the importance of digital technologies. This phase should be seen across the board as a wake-up call to push ahead with digitalization.
Not just cutting costs – entrepreneurial courage is also required
Turnover and margins collapse and cost pressure increases. This is precisely because emergency measures are often more cost-intensive than normal. Nevertheless, companies should not sacrifice their future strategies for acute cost-cutting measures if possible. They should act with foresight for the phase when the corona effect weakens. They should continue to drive forward their corporate strategies. This applies in particular to recruiting in Germany.
The long notice periods make a hiring freeze in Germany particularly painful. Because it will take a long time after the end of the hiring freeze for a company to have the employees it needs on board.
“There are multiple indications that the DACH region could cope better with the coronavirus crisis than other regions, so investments here seem particularly sensible.” Adds Dr. Monika Becker.
Conclusion:
The disruption caused by the coronavirus crisis came very abruptly for many companies. The next phase, the management of the crisis, should be forward-looking despite all the uncertainties. Those who cut back on their forward-looking corporate strategy for the post-corona phase may give up a competitive advantage or lose out to companies that can move forward even during the crisis. This medium-term risk must not be lost sight of under current cost-cutting pressures. This is particularly true in Germany, where many things – such as bringing new employees on board – can only be implemented with a certain degree of latency.
