A looming economic downturn sets the perfect stage for slashed budgets. And one of the first avenues that (unfortunately and invariably) face the brunt is technology. Despite the significant role technology plays in the day-to-day functioning of any business, a slowdown often brings the digital vision to a screeching halt. But it doesn’t have to be this way!
As the new year begins, investing in digital transformation during tough times can be critical to transform and grow your business. Read on to learn how a robust digital arsenal can help you build a business-driven technology strategy and equip you with the necessary capabilities to fuel resilience in trying times.
Tough Times Present a Great Window of Digital Opportunity
2022 was a difficult year for organizations across sectors, and 2023 is not expected to provide much respite. The Federal Reserve’s latest economic projections forecast the global economy to grow at a pace of 0.5% in 2023. A long and arduous downturn is anticipated, with the war, ongoing supply chain issues, and the widening skills gap expected to further impact business and consumer spending.
To weather the storm, businesses must learn how to navigate tough times. Digital transformation may be the last thing on the C-suite’s mind, but to adapt to a slumped economy, changing customer needs, and an unpredictable market, you need to make several changes to your business, starting with the technology foundation of your enterprise.
Deploying an offensive digital strategy can pull organizations away from the clutches of economic headwinds, allowing them to:
- Strengthen the understructure of their business and permanently reduce the cost of doing business
- Invest in tools and systems that improve not just employee experience but also customer satisfaction
- Respond to fluctuating market demands and stay a step ahead of the latest and most disruptive tech innovations
- Equip themselves with skills and capabilities that help them outperform competitors and stay a step ahead during a downturn
- Drive efforts towards priorities, differentiate the product offering, and steer the business to greater heights
- Facilitate agile, data-driven decision-making that is supported by hard facts and not just gut or intuition
Weathering the Storm with a Digital Transformation Investment
It is a gospel truth that companies that do not go digital will die. But for most, digital transformation can be a complex, time-consuming, and expensive endeavor, wracked by surging inflation, talent shortages, and the constant pressure to cut costs. If you want to dodge the impending recession, you need to up your digital transformation game. Here are some tips and best practices to make digital transformation a success:
Invest in Intelligent Technologies
Digital transformation investments do not always drain budgets. When done right, they can enable enterprises to cut down on unnecessary costs and do business better. For instance, investing in intelligent financial planning and analysis technologies can pave the way for better budgeting and forecasting and provide a roadmap that helps you seamlessly sail through recession and inflation.
Automate as Much as Possible
Finding and retaining talent during a downturn can seem counterproductive – especially in an age where skill shortages are at an all-time high. In such economic conditions, investing in chatbots, RPA, and AI to automate as many menial and repetitive tasks can eradicate time spent on inefficient manual processes. This means employees can be more productive and spend more time on tasks that have a direct financial impact on the organization. Automation can also help mitigate risk during a recession by performing routine, rules-based tasks with higher accuracy, speed, and efficiency – without deviation.
Rebuild and Refactor
Addressing modern economic challenges doesn’t necessarily mean embracing all the new technological innovations. You must also be able to exploit the tools and systems you already have in place and maximize returns from them. Rebuilding and refactoring your existing systems can simplify your existing tech ecosystem while helping you identify bottlenecks, improve performance, and combat technical debt.
Unify the Business
Big tech investments, like company-wide ERP and CRM systems, can take years to demonstrate a quantifiable ROI. But despite delayed returns, they play a huge role in unifying the business and acting as a central data repository hosting real-time information from every department. As comprehensive business management tools, these systems can streamline access to data critical for analyzing processes, building forecasts, and curating strategies for an impending slump.
Outsource Technology Management
Every organization today is a technology organization, with operations hinging on digital capabilities. But investing in technology and managing it are two very different things. To stay ahead of the game during a downturn, you need to have a robust technology blueprint in place and competent technology management experts. Opting for skilled technology consulting services to outsource technology management can enable effective business relationship management. This will allow you to have a clear set of processes around how different teams and departments use technology on a day-to-day basis, what tech investments need to be made, and what new systems or capabilities need to be put in place to meet the needs of a volatile market.
Staying on Top of Your Digital Transformation Investments During a Recession
As central banks worldwide hike interest rates in response to inflation, it is presumed that the world may be edging toward a global recession in 2023, with a string of financial crises in the offing. To withstand and pull through the turmoil, highly effective digital leaders are rigorously defining and articulating the scope of digital ambitions, outlining how the business can leverage digital technologies and approaches to drive tangible business outcomes. Those who can demonstrate their resilience through good times and bad will be the ones to drive strong growth, retain their margins, and have the confidence to conquer – no matter how choppy the waters.
According to the Global CFO Survey 2022 by Everest Group, a majority of CFOs are moving digital transformation higher up on their priority lists, with “judgment-intensive” investments high on the list. If you too want to emerge victorious, despite the unpredictable economic storm, you need to be laser-focused on strategic decision-making and carefully plan your investments to build digital maturity, withstand an economic downturn, and recession-proof your business.
Contact us today to speak with a member of our team and get advice on the steps you need to take to traverse the impending downturn.
