Are we in a recession or a correction? Anthony Juliano is the CTO and
General Partner at
Landmark Ventures, and we
debated this question a few weeks ago. Every week, new economic data
supports the recession argument, while other data provides evidence that
we’re not heading in that direction.
CIO and IT leaders have a choice: Either wait 6-10 months for the data and
economists to form a conclusion or adjust plans to address the possibility
of a financial downturn.
Several technology executives weighed in on this article on their ideas,
practices, and technologies to help recession-proof your digital
transformation.
1. Prioritize your digital transformation roadmap
Are you going into 2023 budgets with the same strategies and roadmap you
developed earlier this year? Perhaps it requires some rethinking, and I
received two perspectives on where to focus.
Rajeev Kumar, CRO at SirionLabs,
says, “Business leaders should prioritize digital transformation initiatives
that will help conserve cash, reduce uncertainty, accelerate sales, and
mitigate enterprise risks.”
One person to partner with is the CFO, who should be more open to workflow
technologies now that in the past. Kumar continues, “For CFOs who are
laser-focused on the bottom-line during downturns, a contract lifecycle
management (CLM) system offers a single source of truth on both incoming
revenue and outgoing expenses.”
My perspective: Look at your
roadmap
through the lens of your customers and business stakeholders. Some will be
more open to investment during a recession, especially if budget squeezing
forces them to consider new technologies and ways of working.
2. Focus on the customer and value proposition
The second perspective comes from David Robinson, Director of Data Science
at
Heap. “Demonstrate real value,” he says. “The
best way to protect your product during ruthless budget management is to
ensure customers understand the value you provide.”
Robinson also suggests that businesses enable their customers to try out
products. “Lean into self-serve,” he says. “More and more customers would
rather research and try out a product themselves than engage in a lengthy
sales cycle.”
My perspective: I said in a recent tweet and
blog post, “Don’t slow down. Speed up in the areas that matter.” For many
organizations, that should require both productivity and customer-facing
initiatives but requires better focus on delivering short and mid-term
business value.
3. Increase experimentation and analytics on customer-facing
initiatives
So don’t stop investing in customer-facing and growth initiatives, but do
increase data-driven experiments and
feedback processes.
Che Sharma, CEO and co-founder at
Eppo, recommends, “Do implement
high-quality A/B experimentation as part of your feature development
process. Experimentation is the only way to tie feature releases to business
metrics, like revenue and retention, instead of click metrics, which is
crucial during a recession.”
My perspective: Speeding up doesn’t mean losing control.
Experimentation
is key during volatile market conditions and when it’s hard to predict
customer buying behaviors.
4. Optimize your multicloud architectures to reduce spend
Shifting gears to IT, I sought insights on how IT leaders should reconsider
cloud, infrastructure, and hybrid work tech strategies. Here are two
recommendations.
David Williams, SVP of market strategy at
Quali, says, “Reining in the complexity
of cloud infrastructure is a major challenge for businesses during a
recession, but it’s crucial.”
Even if we’re not in a true recession, Williams recommends, “Don’t wait
until a recession hits to start trying to understand infrastructure costs
and the business context around them.”
Arthur Lozinski, co-founder and CEO of
Oomnitza, adds, “Effective
enterprise technology management (ETM) is key to firms’ well-being of their
IT infrastructure as we move toward economic uncertainty while dealing with
a hybrid or remote work environment.”
My perspective: Rate your IT financial management practices. During
growth periods, it’s easy to add infrastructure with fewer financial
scrutinies. In addition to reducing costs, look for ways to add financial
and cost management practices to cloud, hybrid working, and DevOps
technologies.
5. Consolidate to standard DevOps tools and practices
And what about DevOps? Can we still support DevOps teams having significant
autonomy to select their own tools? It may be a good time to take stock,
regroup, and asses opportunities to create standards.
“During times of prosperity, developers have more freedom of choice in the
tools they use, which creates greater complexity in their toolchains and
processes,” says Williams. “When businesses feel more urgency around costs
and metrics, it becomes very difficult to manage costs because they can’t
prioritize which projects, tools or skill sets are essential.”
What’s William’s recommendation? He says, “Do standardize tools and
processes as best as possible to understand the business value they
provide.“
My perspective: Setting team-driven standards is a best
agile way of working practice
whether you’re facing a recession or during growth.
Picking tools like kids in the candy store
often leads to mounds of
technical debt
cavities.
6. Improve employee experiences and productivity
Shifting gears – what about employee experiences? The first perspective I
share is specific to Industrial 4.0 and manufacturing, while the second can
be applied to just about all organizations.
Arjun Chandar, CEO at IndustrialML,
says, “A key way to recession-proof your digital transformation program is
to develop tools that don’t depend on any particular worker or machine.
Develop tools which can be flexible even if you downsize, use backup
equipment, or bring in inexperienced workers or temps.”
Mihir Shukla, CEO at
Automation Anywhere, says,
“We’re seeing things we never thought we would experience in our lifetime –
and that’s forcing companies to rapidly adapt and understand how to remain
agile for unexpected events.” He continues, “Organizations are dramatically
increasing budgets to support new automation initiatives.”
My perspective: One way to ramp up during a recession is by investing
in
citizen data science programs
and
low-code / no-code platforms. Both approaches, especially when deployed with a
citizen governance model, can enthuse and empower employees even during a downturn.
7. Develop your digital transformation leaders
One final recommendation. While you must focus on the economy and how that
impacts your digital transformation strategy and roadmap, don’t lose sight
of your leaders, teams, and people who drive transformation.
Digital Trailblazers
can help you accelerate digital transformation efforts, especially during
periods of uncertainty. Developing them now is one way to retain the key
people who buy into the business’s mission and the vision behind the
transformation.
