bcsinnovations

Hi, I'm Dave Bull CEO of BCS Innovations. My day-to-day job at BCS is to monitor and direct the executive team who in turn manage their various departments. An important skill for anyone running a business is the ability to judge the appropriate staffing levels required to navigate through the months ahead. There is no doubt that the Global Financial Meltdown has caught many senior managers flatfooted in this regard.

Just before writing this article I bumped into an old friend who is an economics professor specialising in stochastic derivatives modeling. It was his considered opinion that many of the indicators for the onset of recession were evident well before the warnings became public.

There are many indicators that have been used to identify a pending recession, one that has been credited as one of the most accurate is the decline in the total amount of salaries that are paid each quarter. This should not be confused with unemployment statistics which are a lagging phenomenon and mostly skewed by ever changing and politically motivated sampling criteria.

I often say to our staff that our new business sales calls are a great indicator of what the economy is about to do. That is, they usually slow to a dribble just before an economic down-turn and climb steeply just before a period of economic growth.

It was certainly true that we noticed a sales enquiry down-turn around December 2007 yet most were not talking of recession at that point in time, on the contrary the ASX 200 index was at an all-time high of over 6700. It wasn't until almost ten months later (September 2008) that the Australian Federal Reserve Bank reduced its cash rate from 7.25% to 7.0% to stem the effects of a potential recession, until this time there were numerous rate rises to help reduce inflation.

I often say to our staff that our new business sales calls are a great indicator of what the economy is about to do.

In light of this you might find it heartening (I know I do) that our sales prospects have risen to an all-time high over the last six months pointing to a major economic recovery. What is also interesting is that at the writing of this article we have just experienced the longest and strongest bear rally of both the ASX and NASDAQ stock markets since November 2007.

Perhaps Standard and Poor's should use BCS' sales prospects as one their economic indicators!

(Lyn Vicary, David Bull, Darab Kanga and Andy Wyatt at a department heads meeting in the BCS boardroom)

On a more serious note, I believe that many technology companies have found themselves with the challenge of tightened development deadlines and reduced product development capacity. Many companies have responded to these uncertain economic times by outsourcing their product development. Product development can place lumpy demands on internal resources. Outsourcing this function ultimately leads to a more stable internal R&D workforce.

It is rare that companies want to initiate a product development project at the onset of recession when the company's cash-flows may be challenged halfway through the project. At these times a large internal R&D team can seem like an unwanted financial burden, whereas, many companies are discovering the flexibility afforded by outsourcing their product development.

Perhaps Standard and Poor's should use BCS' sales prospects as one their economic indicators!

If you have any questions about how BCS can help you realise your product development ideas please do not hesitate in contacting me or any of our sales staff:

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