Apple, Microsoft, Spotify, Lyft, Coinbase, Tesla, Twitter and Uber—the list of tech companies that have paused hiring and are embracing recession impacts continues to grow. Bloomberg reported that even the “usually invincible companies like Apple and Amazon can’t escape the slowdown.”
Two years ago, companies turned to technology to ride out the global pandemic. Today, once again, they are turning to technology for solutions to navigate the dangerous waters of the looming recession.
What can tech leaders and executives do?
On July 22, 2022, Forbes reported that tech leaders and executives must answer the recession question knowing that business and tech are interconnected. Tech leaders must take an offensive approach and take the economic downturn head-on, making business decisions although they are not tech-related, Forbes said.
According to the Forbes article, companies must:
- Engage executives in creating plans to optimize risk.
- Be prepared to make business strategy adjustments.
- Consider rebalancing the financial portfolio.
- Cut spending if necessary.
- Look for investment opportunities to create a stronger competitive position.
- Maximize value by focusing on top products, projects, and investments.
These analyses, which used to be done manually, are now being powered by AI and machine learning models to augment, improve and deliver faster reports to create better strategies.
AI is also being used in modern business performance management solutions. They can collect and analyze big data, provide managers with real-time insights, eliminate biased performance conclusions and provide insights into new opportunities.
SEE: Hiring kit: Data scientist (TechRepublic Premium)
The best technology to use in a recession
Executives looking into the spending of different departments may be tempted to cut investments in technology and IT. However, this could be a big mistake.
“In other cycles, we’ve seen in the past, tech investment was one of the first casualties,” Nicola Morini Bianzino, chief technology officer at EY said via CNBC. However, after the pandemic, companies have taken note that investing in technology is not a cost but a business driver and a differentiator.
According to CNBC, companies are not pulling back on technology investments despite the economic outlook. The CNBC Technology Executive Council survey revealed that more than three-quarters of tech leaders expect their organization to spend more on technology in 2022.
According to leading experts from CNBC, Gartner, and more, the top technologies that can help in times of recession are:
- AI and machine learning
- Cloud technology
- App development
- Digital twins
- Data science and data engineer teams
- Digital business analysis tools
- Remote and hybrid work technology
- Cloud applications
- Workflow and management digital solutions
- Customer and brand experience technology
- AR and VR
“Investing in the right digital initiatives at the right cost can blunt the negative effects of economic pressures in the short term and build long-term competitive advantage,” Gartner said.
Digital tools can: automate processes, reduce costs, augment risk detection and opportunity detection with AI, respond to disruptions in supply chain demands with digital twins and reimagine omnichannel and customer experience to drive sales.
Gartner says there are nine ways to play digital offense during a recession:
- Trade-offs: Create a prioritized list of the resource trade-offs. Have a clear narrative that communicates it to stakeholders.
- Cloud migration: Migrating to the cloud can reduce infrastructure spending, energy and maintenance costs, and personnel requirements. The cloud also opens endless new tools for business opportunities.
- Reimagine workflows: Changing the platforms and systems of work environments can cut costs and drive performance.
- Secure digital talent: Be open to outsourcing or offering remote, hybrid, or flexible work opportunities to align with global talent´s demand. Workers are your greatest assets, empowering them with the right tools and resources is critical.
- Employee value proposition: Clarify your EVP, to attract and retain the right digital talent. Creating an attractive work culture that retains and attracts talent and accelerates collaboration and efficiency.
- Digital talent: Make sure to secure digital talent that can leverage your technology investment and navigate recession with digital tools.
- Customer experiences: Digital technologies are being used to rebuild digital, virtual, and in-store sales channels. Investing in customer experience will not just drive sales but modernize your company.
- Predictive and autonomous: Invest in predictive and autonomous digital projects that make your organization faster and leaner, including in its decision-making.
- Digital metrics: Narrow the metrics you use to measure digital initiatives and monitor their progress to ensure you focus on the few that align with outcomes.
Every business and organization is different and must respond with different strategies to a recession. There is no one-size-fits-all solution when it comes to tech tools that can turn a recession into an opportunity. Benchmarking plans and prioritizing assets can create high-value return even in the worst crises.