Worried About Managing IT Costs in 2023 Due to Economic Downturn?

Is your business failing to stay within budget? Are you also worried about the recession hurting your business?

You are not alone, as 74% of consumers are also concerned about the recession in 2023. The fact that the real global GDP is below pre-pandemic due to the global downturn supports this perception. 

Did you know that this grim outlook is expected to cost over  $17 trillion, or roughly 20% of global income? However, getting through the recession could be much easier if you construct a solid plan and stick to it. How’s that you ask?

Just read through and watch your problems diminish one by one.

How to Tackle Recession in 2023?

  • Continue Your Projects

Do not stop your operations. Completely shutting down or restricting projects is a temporary getaway.

Check if your company budget allows projects to continue. If so, don’t stop, since your spending is eventually going to put the economy back on track. 

Products launched during a recession have both higher long-term survival chances and higher sales revenues. That’s partly because there are fewer new products to compete with. 

But it also comes from the fact that companies maintaining R&D have focused the investment on their best prospects — which may explain why products introduced during recessions have been shown to be of higher quality.

Researches show that the best period to launch a new product is just after a recession’s mid-point. This period means customers have started thinking about non-necessities, maybe even expensive products, like cars. 

Launching a new and innovative product shows hope that the economy is healing, and consumers may soon be able to afford it.

  • Customer and Employee Vision

Reevaluate your vision, as customers and even your employees are doing so.

Reimagine what you are about to offer your customers and employees. Are your customers seeking quality products or cheaper prices? Have they switched to other products? If yes, why so.

Repeat the process keeping employees in mind. Do they prioritize stability over monetary benefits right now? Show them that staying with you is the right decision. 

Do so and you can accelerate your production while addressing customer needs. 

  • Try Autonomous and Predictive Tools

Being in the IT sector, we can assure you one thing – there are always tools to help you.

Investing in autonomous and predictive tools will make your organization quicker and more efficient. It will streamline your operations, from product development to decision-making. What’s more, is that you can rely on the tools to assess how the market dynamics are going to change.

Employing autonomous tools to perform mundane and repetitive tasks will also help you save resources. Integrate this saved manpower in areas where a human touch is needed.

  • Study Your Digital Metrics

Funnel your metrics to measure digital initiatives and assess the progress. 

It ensures you stay focused on the few that are rendering valuable outcomes. The more you study, the better insights you will fetch. Working on these insights only mean one thing, better decisions, and improved revenue.

  • Make Trade-Offs

Here starts the tough part, you need to start making trade-offs.

Start by creating a list of the resource trade-offs you can afford in budget and cost management. Establish a distinct narrative that sheds light on your thought process. Make sure that this can be translated into something that your stakeholders understand and buy. 

  • Enters Cloud Migration

Heard of cloud migration? Of course, you have. It is time to experience it as well.

Accelerate your movement by shifting to the cloud. Making the cloud a part of your purposeful digitalization serves several critical business needs. It unleashes potential opportunities while reducing the impact of surging energy prices. 

In addition, it supports your infrastructure, making room for a more nimble and adaptive approach.

  • Build your IT Digital Maturity

Whatever your strategic goals or associated plans are, ensure that your initiatives are chosen carefully. 

Your goals should not spread the company’s focus and resources thinly. Achieving enterprise ambitions is only possible when CIOs invest in these four capabilities: 

  1. Strategy
  2. Governance
  3. Architecture 
  4. IT Delivery 

Utilize diagnostic analysis to identify your IT function’s maturity level in these capabilities. Align your target level and program based on the overall ambition for the best result.

Now comes the million-dollar question – How can you cut down costs during a recession without affecting productivity? Let’s see.

Here’s How to Cut Down Costs During a Recession Without Losing Productivity 

  1. Reach out to additional IT vendors to check if someone provides similar value for a lower cost
  2. Discuss with your vendor if they can reduce hourly rates
  3. Hire IT experts to conduct effective fund and project management.
  4. See if vendors are willing to provide a milestone-based fixed cost for your project
  5. Freezing all discretionary non-essential spending – this includes costs that are not essential for the operation of the business
  6. Connect with partners and negotiate for lower 90-payment terms
  7. Request payment deferment or special terms during the crisis
  8. Look at options like extended leave without pay, furloughs, or exchanging workers with other employers

Now that you have gone through the tips, you must have a better idea of your standing and how to progress. If you are still confused or want more information on the subject, we are here to help you out. Reach our IT experts to understand how to manage costs and survive during a recession.