With government bodies across the globe wrestling to keep inflation under control and grumbles of recession growing louder, many businesses are set to face a period of considerable economic pressure.
To help weather the turbulence, businesses are scrambling to find ways to cut back on costs. And, naturally, as a large contributor to expenditure, technology budgets are coming under review.
With this in mind, TechRadar Pro spoke to CTOs from various industries, who highlighted the best areas of the technology stack to target for savings. In this edition, we focus on how businesses might rein in costs without compromising on IT expenditure, and why IT shouldn’t be the first head on the block.
Technology has changed
Recessions come and go, but technology is always evolving. The tech that businesses are expected to have at their disposal has become more sophisticated, and in response, the strategies that organizations use to get through a recession unscathed must change.
Dr Alan Warr, from the BCS Consultancy Specialist Group, knows the importance of keeping up with technology regardless of the economic outlook.
“Global corporations are not planning to slow IT investments. For them, IT is no longer a cost center. It is the single most important source of growth and innovation," he said.
"A plethora of transformative technologies has arrived – AI, IA, XR, blockchain, IoT, cloud, quantum, etc. This recession will be unique because IT’s role will be different. Cut IT innovations to the bone, as in past recessions, and the organization will weather the recession to find it is too far behind to have a future.”
Society has changed
The Covid-19 pandemic and the rise of remote and hybrid working conditions have rocked businesses to their very core.
Simply put, a healthy technology spend is required to support this brave new world, and may actually put businesses in the best position to survive the recession by enabling them to work through it in spite of the rising costs of energy and office space.
Antonio Hidalgo Landa, chair of the BCS Consultancy Specialist Group, believes that focused technology expenditure could make considerable savings for businesses elsewhere.
“The current economic situation is complex with the increase in the cost of energy, transport and labor shortages. Hence, businesses should be cautious with their spending on energy, travel and recruiting. Technology progresses but also society, and organizational changes may have a stronger impact on costs and performance, like remote working," he told us.
“Saving may come from a reduction in middle management, but also from increasing cooperation with natural competitors. These changes require the support of a capable IT.”
Echoing Dr. Warr, Landa outlined specific technological advancements that can save businesses money.
“Commercial of the Self (COTS) solutions allow a wider public to access technology like RPA, ML or chatbots to the wider public, hence reducing costs. Digital transformation can address many inefficiencies, reducing costs and bringing opportunities to increase performance.”
“Automation and technologies like Robotic Process Automation (RPA) can reduce costs drastically while increasing performance. Machine Learning can improve forecasts, helping businesses to improve inefficiencies.”
Tech stacks can change without cuts
In the wrong hands, technology spend can balloon into a frightening sum, and the immediate reaction of many company bosses is to look at how to reduce their technological ability.
But Tom Salfield, co-founder and CTO of manufacturing company Wikifactory, thinks that savings can come from changes to a business’ technology stack, and that this doesn’t have to mean cuts.
“While some businesses look to their tech stack to cut costs, removing tools that are under utilized or require expensive monthly subscriptions, I would instead suggest focusing on how to make your solutions work better for you and streamline processes at the same time," he said.
“By adopting one platform that enables teams to work on projects or create products from start to finish, companies can realize significant efficiencies, improve productivity for their workforce and lower costs.”
“The answer for many then, is not less tech, but simplifying the tech stack and making smarter decisions about the solution that delivers the most seamless service.”
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