Welcome!

@DevOpsSummit Authors: Zakia Bouachraoui, Yeshim Deniz, Elizabeth White, Pat Romanski, Liz McMillan

News Feed Item

Companies Banking on Quick Recovery Risk Making the Same Mistakes as Companies That Failed During the Great Depression, Says Boston Consulting Group Report

Study of More Than 60 Leading Indicators Worldwide Shows That Talk of 'Green Shoots' Is Premature as Global Economy Continues to Decline

BOSTON, MA -- (Marketwire) -- 06/15/09 -- Chief executives risk falling into the same trap as those among their predecessors in the Great Depression who were too quick to call the end of the downturn, according to the findings of a report released today by The Boston Consulting Group (BCG).

In "Green Shoots, False Positives, and What Companies Can Learn from the Great Depression," BCG found that, for all the talk of "green shoots" today, most of the popular leading economic indicators show that the world economy is still shrinking -- if at a slower rate than at the beginning of the year.

It warns CEOs to guard against the kind of hasty optimism -- based on an excessive reliance on one or two promising indicators -- that undermined some companies during the Great Depression. In June 1930, after a stock market rally that saw the S&P regain 60 percent of its lost value, Herbert Hoover, the U.S. president, confidently announced that "the depression is over."

In a study of 61 leading economic indicators in five of the world's largest economies -- the United States, Germany, France, the United Kingdom, and Japan -- BCG found that only five are in the "clearly positive" category. Another 15 are in the "positive trend but too early to confirm" category. The rest are ranked among either those showing some deceleration in the rate of decline but no consistent upturn (36) or those continuing to show a consistently negative trend (5).

Although this represents an improvement -- 37 of the 61 indicators were ranked in the most negative category in December 2008 -- the report's authors conclude that there are few signs that the global economy is back on a positive trajectory. They warn that nearly half of all the indicators showing signs of an upturn are driven by monetary policy. Of those indicators that are not related to monetary policy initiatives, less than a quarter have shown any positive sparks.

Daniel Stelter, global leader of BCG's Corporate Development practice and coauthor of the report, said, "In recent conversations at companies the world over, we have detected a change in the mindset of many executives. Many seem to be adopting a more optimistic economic outlook. They tell us that they see 'green shoots.' But although government intervention means that we are unlikely to see the bank failures that contributed to the paralysis of the 1930s, we should nonetheless learn from President Hoover's hubris -- and take it as a warning to be cautious about any premature celebrations of the upturn."

Major Risks Remain

BCG's report, part of its ongoing "Collateral Damage" series of papers on the downturn, also points to a set of factors which suggest that, even when the green shoots do start appearing, the recovery will be sluggish.

-- The empirical evidence is discouraging: similar recessions have lasted seven quarters, on average

-- The deleveraging of the U.S. consumer has barely begun

-- Credit is not flowing yet

-- The banks have not been restored to health

-- The not-so-stressful "stress test": the U.S. government's stress test was more a negotiation than a true assessment of banks' health

-- Governments do not have unlimited resources

David Rhodes, global leader of BCG's Financial Institutions practice and coauthor of the report, said, "For us, the key issue is not the precise timing of the upturn but the nature of the recovery. We expect this upturn to be sluggish -- as with all upturns after a recession that is synchronized around the globe and preceded by systemic financial stress. And in a sluggish economy, trading conditions will be tougher, competitive advantage more important, and broken business models exposed."

BCG's "Collateral Damage" Series

Based on its long history of helping companies survive and thrive during global economic downturns, BCG created its "Collateral Damage" series, which explores the "new realities" of a world in crisis. The series is providing a big-picture analysis of the crisis as it evolves in different regions, countries, and sectors. It offers senior executives practical guidance for protecting their companies from the worst of the crisis and preparing them for economic recovery.

Current titles in the series include:

-- Collateral Damage: What the Crisis in the Credit Markets Means for Everyone Else

-- Collateral Damage, Part 2: Taking Robust Action in the Face of the Growing Crisis

-- Collateral Damage, Part 3: Asia, Advantage, and Action

-- Collateral Damage, Part 4: Preparing for a Tough Year Ahead: The Outlook, the Crisis in Perspective, and Lessons from the Early Movers

-- Collateral Damage, Part 5: Confronting the New Realities of a World in Crisis

-- Collateral Damage, Part 6: Underestimating the Crisis

To receive a copy of the report or arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or [email protected].

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@DevOpsSummit Stories
Dynatrace is an application performance management software company with products for the information technology departments and digital business owners of medium and large businesses. Building the Future of Monitoring with Artificial Intelligence. Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like "How is my application doing" but no idea how to get a proper answer.
This session will provide an introduction to Cloud driven quality and transformation and highlight the key features that comprise it. A perspective on the cloud transformation lifecycle, transformation levers, and transformation framework will be shared. At Cognizant, we have developed a transformation strategy to enable the migration of business critical workloads to cloud environments. The strategy encompasses a set of transformation levers across the cloud transformation lifecycle to enhance process quality, compliance with organizational policies and implementation of information security and data privacy best practices. These transformation levers cover core areas such as Cloud Assessment, Governance, Assurance, Security and Performance Management. The transformation framework presented during this session will guide corporate clients in the implementation of a successful cloud solu...
So the dumpster is on fire. Again. The site's down. Your boss's face is an ever-deepening purple. And you begin debating whether you should join the #incident channel or call an ambulance to deal with his impending stroke. Yes, we know this is a developer's fault. There's plenty of time for blame later. Postmortems have a macabre name because they were once intended to be Viking-like funerals for someone's job. But we're civilized now. Sort of. So we call them post-incident reviews. Fires are never going to stop. We're human. We miss bugs. Or we fat finger a command - deleting dozens of servers and bringing down S3 in US-EAST-1 for hours - effectively halting the internet. These things happen.
CloudEXPO | DevOpsSUMMIT | DXWorldEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
This sixteen (16) hour course provides an introduction to DevOps, the cultural and professional movement that stresses communication, collaboration, integration and automation in order to improve the flow of work between software developers and IT operations professionals. Improved workflows will result in an improved ability to design, develop, deploy and operate software and services faster.