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How technology can help businesses weather a recession

With the economy contracting for the second quarter in a row, experts say business leaders must prepare for the recession by investing in technology to boost sales.

Image: Unsplash

A growing list of tech companies, including Apple, Microsoft, Spotify, Lyft, Coinbase, Tesla, Twitter, and Uber, are suspending hiring and embracing the effects of the recession. Bloomberg reported that “even normally unbeatable companies like Apple and Amazon cannot escape the slowdown.”

Two years ago, businesses turned to technology to help them survive a global pandemic. Today, they’re turning to technology again for solutions to help them navigate the dangerous waves of recession looming.

What can technology leaders and executives do?

On July 22, 2022, Forbes reported that technology leaders and executives must answer the recession question by recognizing that business and technology are interconnected. According to Forbes, tech leaders need to take an aggressive approach, face the economic downturn head-on, and make business decisions that aren’t tech-related.

According to a Forbes article, businesses should:

  • Involve executives in developing plans to optimize risk.
  • Be prepared to make adjustments to your business strategy.
  • Consider rebalancing your financial portfolio.
  • Cut spending where necessary.
  • We look for investment opportunities to enhance our competitiveness.
  • Focus on top products, projects and investments to maximize value.

These analyzes, previously done manually, are now powered by AI and machine learning models to enhance, improve, and deliver reports to create better strategies.

AI is also used in modern performance management solutions. Big data can be collected and analyzed to provide real-time insights to managers, eliminate biased performance conclusions, and provide insight into new opportunities.

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The best technology to use in a recession

Executives looking at spending across different departments may be tempted to cut investments in technology and IT. But this could be a big mistake.

EY Chief Technology Officer Nicola Morini Bianzino said via CNBC: But after the pandemic, companies realized that investing in technology was a business driver and differentiator, not a cost.

According to CNBC, despite the economic outlook, companies aren’t holding back on investing in technology. More than three-quarters of his tech leaders expect their organizations to spend more on technology in 2022, according to a CNBC Technology Executive Council survey.

According to leading experts such as CNBC and Gartner, the technologies that can help during a recession are:

  • cyber security
  • AI and machine learning
  • cloud technology
  • App development
  • digital twin
  • robotics
  • Data Science and Data Engineer Teams
  • Digital business analytics tools
  • Remote and hybrid work technology
  • cloud application
  • Workflow and management digital solutions
  • Customer and brand experience technology
  • AR and VR

According to Gartner, “Investing in the right digital initiatives at the right cost can mitigate the negative effects of economic pressures in the short term and build long-term competitive advantage.

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Digital tools can automate processes, reduce costs, enhance risk and opportunity detection with AI, respond to supply chain demand disruptions with digital twins, and drive sales by reimagining omnichannel and customer experiences.

Gartner says there are nine ways to launch digital attacks during a recession.

  1. trade off: Create a prioritized list of resource trade-offs. Have a clear narrative to tell your stakeholders.
  2. Cloud migration: Moving to the cloud can reduce infrastructure spending, energy and maintenance costs, and staffing requirements. The cloud also opens up endless new tools for business opportunities.
  3. Rethink your workflow: You can reduce costs and improve performance by changing the platforms and systems of your working environment.
  4. Secure Digital Talent: Be open to outsourcing or providing remote, hybrid or flexible work opportunities to meet global talent demands. Employees are your greatest asset and empowering them with the right tools and resources is critical.
  5. Employee Value Proposition: Articulate your EVP to attract and retain the right digital talent. Create an engaging work culture that retains and attracts talent and fosters collaboration and efficiency.
  6. Digital Talent: Leverage your technology investments to ensure you have digital talent who can weather the recession with digital tools.
  7. Customer experience: Digital technology is being used to reshape digital, virtual, and brick-and-mortar sales channels. Investing in customer experience not only increases sales, it modernizes your company.
  8. Predictive and autonomous: Invest in predictive, autonomous digital projects that make your organization faster and leaner, including decision-making.
  9. Digital indicators: Narrow the metrics you use to measure your digital initiatives and monitor their progress so you can focus on a few metrics that match your results.

Every business and organization is different and will need different strategies to respond to a recession. There is no one-size-fits-all solution when it comes to technology tools that can turn recessions into opportunities. Plan benchmarking and asset prioritization can generate high-value returns even in the worst of crises.