As the risk of a UK recession ‘grows higher’, companies are naturally looking for ways to cut costs as they face fears about the increasing costs of doing business and meeting the needs of their customers and employees.
The impact of a recession on a business is highly significant; while some companies might only experience a drop in sales and profit, others could see the collapse of their business altogether.
A drop in consumer demand and spending, extra interest on company debt and rising operating costs are all contributing factors to a business’s downfall during a financial crisis.
A recession in 2023/24 would be different from a 2008 recession because of the capabilities in technology and how businesses can leverage digital tools and skills to help their business. By taking advantage of these digital tools and resources, you can reduce the cost of running your business and meet the future needs of your staff and customers.
Here are seven tech-related strategies and investments that we believe will steer your business through the economic wave:
1. Eliminate Redundant Tech
When costs are up and income is down, a natural (and often effective) first step is cost cutting. When was the last time you reviewed your technology stack to see which servers and systems can be decommissioned or improved to lower their running costs?
Last year, we achieved more than £300,000 per year in savings for one of our clients. By recognising unused servers, reviewing third-party contracts, and identifying areas to save money, we cut their annual IT running costs by well over a quarter of a million pounds. This is part of an ongoing service, and we are continuously looking at ways to cut their IT spending.
Attackers don’t go away when a recession hits; they’re still lurking in the background, looking for ways to get into your business. In fact, some research suggests cyber-attacks increase during a recession. Even though you may be focusing your efforts on cutting costs, making your business more vulnerable to a cyber attack could have serious financial consequences for your business.
By working with an outsourced IT provider, your business will cut overheads and associated hiring costs without losing essential IT resources. Our agile director-level IT outsourcing service lets you consolidate the full-time role of a senior or director-level IT manager into a flexible contract that works around your budgets and requirements. By outsourcing IT management, you’ll achieve the results of a full-time professional without paying the full-time wage, hiring costs and bonuses.
4. Invest in Automation
A recession can provide a great opportunity to invest in automation as it enables your company to do more with less; something you’re looking to achieve during financial hardship. Process automation is when a piece of technology performs tasks that are usually performed by a human, such as data entry, invoice creation, customer support and inventory management.
Investing in automation is great during a recession because it helps to reduce operational costs while setting up your long-term digital future and improving the efficiency of your people.
It also takes on the lion’s share of the repetitive, administrative jobs, which helps prevent staff fatigue and stops human error.
5. Align Tech with Goals
While it’s important to invest in technology for your business, what’s even more important is that the technology itself is helping the business to achieve its objectives. Technology can be a huge investment but, when done right, it can deliver huge success for a business. There are many steps to aligning your technology with your business goals, which can be broken down into manageable milestones and deliverables.
That way, every investment you make in your IT will be geared towards achieving your company objectives to deliver real business value.
6. Employee Development
Your people are the bedrock of your business. Whatever infrastructure you put in place, or strategies you set, it’s your people who are the ones that go out and make it happen. By investing in the development and training of your employees, you can build a strong team with a breadth of skills to overcome the challenges of difficult times. When the recession is over, you will come out in a stronger position thanks to the added skills and knowledge in your teams.
7. Invest in the Right Tools
As mentioned before, technology can play a big role in navigating a recession, in particular, the array of tools and software on offer to help you. There are various customer service support tools (such as chatbots and support systems) to maintain good levels of customer service and enhance your sales pipeline. Business automation software will cut out manual tasks and speed up processes, while cloud apps are often cheaper to maintain than on-premise.
Identifying the right tools to invest in should be left to an experienced IT professional. PSP has a team of business systems analysts and procurement specialists who can analyse your current situation, identify your requirements and find the right solution that meets those requirements.
PSP’s team of director-level IT professionals are experienced in maximising your company’s return and value from your IT investments.
Whether you need us for one day each quarter to make sure your strategies are aligned, or you need us twice a week for a more hands-on role, we will ensure your company can keep on investing in IT during a recession and align your wider company objectives with your IT strategy.
If you’re looking to reduce your IT spending or want to build a robust digital strategy that will steer you through the recession, talk to one of our experts.
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