After the worst part of the recession, what is different today?

I remember everything about the day when the stock market dropped 700+ points. I couldn’t believe it. I thought that it could not happen again. Well, it did… a few more times. Panic was spreading like a virus in one of those movies that stars a monkey. It was chaos. Companies were cutting budgets, stopping projects, and doing everything they could to save cash. People were being sent to the unemployment line. Houses were being lost. Retirement plans were being destroyed.  That was only a year and a half ago.

Today, the stock market is back up, recovering around 4,ooo points to near 11,000. Consumer and company optimism seems to be back. But, something has changed. The way that companies ran their business is fundamentally different today than it was just a short 18 months ago. Irregardless on the size of the company, they are running leaner. They are more efficient, they are finding new ways to cut costs.

A few years ago, most, if not all of my clients were the end users of my company’s services. Today that number has dropped to about half, but the other half was replaced by a market I never would have thought to get into. Nearly half of my current clients are now partners. By partner, I mean other companies that may have been seen as a competitor in the past. This has been a huge paradigm shift for many organization, but the real question is why did it happen.  There are thre main reason I have come down to:

1. Companies do not want to have to manage multiple vendors while still having a need for the services of multiple vendors. If, as a vendor relations manager, I can have five primary vendors that I manage, I can reduce my costs. It cost much more to have the staff and time to manage 25 vendors than it does to manage five vendors. I can communicate with my primary vendors to gain partnerships with the other 20 vendors to provide all of my requires service needs.
2. Service companies, like mine, are finding it to be more cost effective to sub-contract some work if a project requires it. Historically, we (an many other companies) would just add staff to assure we have the right people to complete a project. Today, we can outsource an entire piece of a project to a partner company. We, being a software development company, know where we have our strengths, and where are have our weaknesses. Where we have our weaknesses, we add a partner that hold our weakness as a strength. We have our partner bid on a technical requirement we draft for them. By doing so, we are able to produce a product that is of much higher quality for our client for a similar, and sometime lower cost. We have learned that partnerships are great.
3. Lastly, we are smart enough to know that two heads are better than one. If we are going to bid on a project, we have a much better chance to win the project if we are subject matter experts in all facets of the project. There are two ways to be a subject matter expert: 1. Say you are and hope you don’t get caught. 2. for a team with partners and actually be a subject matter expert.

Once I understood these three items, I have been able to be much more successful in delivering more service, higher quality services, and expanding my network. I have become more transparent with my partners and clients. It has been well received. This is becoming the way to do business in the 2010′s. You cannot afford to hold everything so close to the vest. It is not 1984 anymore.