- More than half of C-suite officials, 55%, plan on ramping up their cybersecurity investments as a recession looms over the economy, according to a Grant Thornton survey of more than 250 business owners and C-suite executives.
- Investments in technology innovation is a priority for 56% of respondents and 52% said they plan to introduce new products and services "if a recession was imminent," according to the report.
- More than one-fourth of respondents said they will likely cut costs on machinery and equipment to prepare for a recession. Research and development will also take a backseat for 26% of companies.
The pressure to continue innovation, recession or not, is ever-present.
"We have seen many organizations over time come out of a recession stronger by buying and investing at the bottom of a market," Chris Stephenson, national managing principal of Grant Thornton's Financial Management practice, in an email to CIO Dive. Using a recession period to continue innovations builds on this idea.
"Companies that do want to innovate will likely add precision to what that means from the bull market days," he said. "There will likely be less tolerance for variance in investments, so we expect tighter innovation plans aligned to each company's risk profile."
But investments in technology, recession or not, are strained by budget. Tight purse strings make CIOs even more selective and conservative in their adoption of new technologies.
However, a slower tech refresh cycle is being challenged by emerging technologies with speedy implementation, like robotic process automation, machine learning and advanced analytics, according to Stephenson.
"We're seeing projects that can be budget neutral in the same year they are implemented," said Stephenson. "My advice is to rethink the investment strategy of the last 20 years where every investment had to be significant," like ERP or CRM adoptions.
But timely innovation comes with the added pressure of risk, something companies cannot afford more of during a recession. "During recessions companies typically have tighter buffers in place for distractions and events that hurt the bottom line," said Stephenson.
Because of that, companies are even more hyper-sensitive to risk. Cybercriminals take advantage of an economic downturn, knowing well companies' resources are scarce, according to the report.
While companies plan to continue their cybersecurity investments into a recession, budgets remain tight. The "return on cyber is much more about risk reduction than increasing short-term cash flow," said Stephenson. From a workforce point of view, Stephenson suggests mitigating risk by making the cybersecurity team more of a consultative entity, giving them the opportunity to collaborate on design.