When economic times get tough, IT leaders who have already prepared themselves for possible budget cuts tend to weather the storm better than counterparts who are caught by surprise.
Recessions typically mean enterprise-wide cuts, and IT is rarely spared. "A strong technology portfolio management process, tightly aligned to enterprise strategy and priorities, is important to ensure critical programs and projects remain above the line," says Tim Potter, a principal at business advisory firm Deloitte Consulting. "By collaborating closely with business partners while rebalancing an IT budget, IT leaders can be sure that technology project prioritization is aligned with corporate direction."
To prepare for a possible recession, IT leaders should consider reducing complexity and cost by simplifying their technology stack, advises Matthew Leach, vice president, digital transformation services, with IT service and consulting company NTT DATA. He advises searching for and confronting technology and process impediments. "Then turn your attention to managing organizational risk successfully in order to understand and protect against the challenges of new business models."
Weathering the Storm
Damon Frank, principal, managed technology services, with management consulting company RSM US, suggests revisiting the current IT strategy and reprioritizing initiatives and budgets. Place critical items and core operational requirements at the top of the list. "Nice-to-have projects that don't register high on the priority list may need to be tabled until market conditions change," he says. "IT organizations should focus on what's most important and what's needed to keep the business and operations running."
Developing a cost-savings strategy can help mitigate the risks of severe budget cuts. "Without this forethought, IT teams could see their initiatives shelved, their staff drastically reduced, and their budgets slashed," says Sreedhar Bhagavatheeswaran, global head of consulting at technology advisory firm LTIMindtree. "By planning ahead, IT leaders can more effectively ensure the long-term viability of their initiatives and programs," he notes.