If IT leaders aren’t already considering the effects of a recession, their CEOs certainly are. According to the Conference Board’s C-Suite Outlook Mid-Year, nearly 8 in 10 business leaders foresee a recession in their major region of operation during the next 12 to 18 months — or feel one is already underway. According to Roberts, many CIOs have never had to manage their organizations through such economic issues a decade after the last recession. However, they will be tasked with reducing expenses and increasing efficiencies in order to keep their firms running throughout the cycle. IT expenditures can account for a major share of operational expenses (SG&A) and capital investments, thus when cost reduction is required, IT should be prioritized. “It is essential for IT leaders to have a plan,” says Patrick Anderson, director of technology, strategy, and architecture at global consulting firm Protiviti. “Without a plan from the IT leader, other leaders will step in and that could have devastating consequences.”
If IT leaders aren’t already thinking about the impact of an economic recession, their CEOs certainly are. In fact, nearly 8 in 10 business leaders expect a recession in their primary region of operation within the next 12 to 18 months — or believe one is already underway, according to the Conference Board’s C-Suite Outlook Mid-Year. Among CEOs surveyed globally, 15% believe the recession has already taken hold while another 61% expect a recession will arrive before the end of 2023.
“While recessions are inevitable, we never know when they will hit,” says Dan Roberts, president at Oullette & Associates and host of the CIO Whisperers podcast. “There is a tricky balancing act at play. C-suite leaders can’t hit the brakes and risk missing market opportunities. But on the flip side, if they continue to invest at the same levels and the economy tanks, they run the risk of spending getting out ahead of revenue.”[ Discover the secrets of employee retention, why good employees leave (and how to prevent it), and the best diversity and inclusion practices for changing your culture. ]
A decade on from the last recession, many CIOs have never had to lead their organizations through such economic challenges, Roberts points out. But they’ll be charged with cutting costs and building efficiencies to sustain their businesses through the cycle.
Companies underinvested in technology will be in the worst position. “They’ll have few choices but going into survival mode scavenging coins out of the sofa to save money,” says Peter Pisciotta, managing director and senior consultant at Fine Line Partners.
IT costs can account for a significant portion of operating expenses (SG&A) and capital investments, so when cost reduction is needed, IT can be at the top of the list for cuts.
“It is essential for IT leaders to have a plan,” says Patrick Anderson, director of technology, strategy, and architecture at global consulting firm Protiviti. “Without a plan from the IT leader, other leaders will step in and that could have devastating consequences.”Source: CIO