Businesses are looking to mitigate damage as a recession becomes likely and inflation trends upward.
Seven in 10 C-suite executives already have a cost-transformation initiative or plan to implement one within the next six months, according to an Accenture report which surveyed 2,000 C-suite executives.
Companies are strategizing ways to invest in technology that will increase businesses’ capabilities and awareness. Over half of respondents cited AI, cybersecurity, data analytics and other digital tools as a way to improve operations.
Technology — while costly — is a value driver and businesses do not want to be left behind with labor shortages, supply-chain disruptions and record inflation knocking on their door.
“The first thing you do when you have an economic downturn is turn to the data,” said Taylor Brown, co-founder and COO of Fivetran. Brown said businesses look to what they can optimize, cut and reallocate. “You can't make those decisions without actually having all of your data,” said Brown.
A risk perspective approach relies heavily on extensive, viable data, according to Matt Kunkel, CEO of LogicGate.
“Siloed data and disconnected teams will undermine the resilience of any organization. IT investments, particularly in areas like enterprise risk management, bolster an organization’s resilience with robust processes and automation bringing disconnected data into one consolidated view so that stakeholders have visibility into all risk,” Kunkel said in an email.
Companies across industries turn to technology solutions to enhance or unlock new value. The city of Chicago put forth an initiative to modernize data access and IT infrastructure. Delta Air Lines signed a deal with AWS to broaden its cloud coverage. Nike is launching a new ERP system to increase visibility and productivity.
But the continued market uncertainty has placed even more pressure on CIOs to evaluate cost optimization opportunities and practical investment options.
“Amid the current economic uncertainty, CIOs face pressure to consolidate budgets, manage complexity across multiple systems and ultimately demonstrate the ROI of their technology investments,” Kunkel said.
CIOs have to advocate for these investments to the board, especially as many businesses pull back spending.
“CIOs that can identify key value chains and assemble KPIs that influence decision-making towards desired outcomes will have a strategic advantage in articulating the business value of IT investment,” James Anderson, Gartner VP analyst, said in an email.
Kunkel said that it’s important to clearly communicate the cost of failing to invest in enterprise technology properly.
“By putting a price on the efficiency automation brings or the enhanced protection of upgrading IT measures, CIOs offer the board a clearer picture of how the technology can benefit the organization and what they risk by not investing,” Kunkel said.
As CIOs chart a path forward, many vendors focused on emerging technologies will offer a lending hand, but not all are particularly necessary, according to Mike Tweedie, practice lead CIO-IT strategy at Info-Tech Research Group.
“Having a clear alignment with the goals of the business and the demands of their organizations, CIOs can target spending based on the underwriting, support, and successful execution of those goals,” Tweedie said in an email. “Gone are the days of a back office/shared service; CIOs must drive new technologies only in pursuit of business outcomes. As such, engaging key vendors and partners become critical and leveraging spending where and when it makes sense.”