Recently, companies such as Dropbox, Amazon, Lyft, and Meta, as well as Apple, have used the draconian and cruel layoff approach to economic optimization. Yet while the “R” word is bantered around, the “mainstream media” continues to claim that a recession has not yet arrived. This is despite the academic definition of “recession,” that is, consecutive quarters of negative gross domestic product growth, as was the case in the first half of 2022. In today’s volatile economic landscape, businesses must be prepared to do more with less and navigate through periods of recession, or apparent recession, and economic downturns. As a critical component of any organization, an IT department retains a critical role in enabling productivity, efficiency, and innovation. Therefore, to ensure its longevity and resilience, it is essential to recession-proof your IT department. Let’s discuss approaches that will effectively better prepare any IT organization for challenging times such as these.
Focus on What Is Important
During a recession or any economic downturn, businesses must often confront prospects of budget cuts and constraints, reductions in workforce, and difficult decisions of prioritization of essential services over nonessential ones. When that situation arises, each IT department must focus on priorities and, sometimes, urgencies.
An IT department must align those priorities with the organization’s core objectives and focus on delivering services that directly contribute to business continuity, efficiency, and cost savings.
Critical systems and applications vital to daily operations will be identified and resources allocated accordingly. Demonstrating the value of IT services enhances the department’s relevance and protects it from potential budget cuts.
Invest in Employee Skill Development
Investing in employee development is never a top institutional priority. The old cliché “penny-wise and pound-foolish” comes to mind when confronting this reality. However, before the budget is exhausted and before any economic turbulence causes its inevitable disruptions, organizations often implement hiring freezes or downsizing measures. This foreseeable and harsh reality should inspire IT managers to invest in the training and preparation of existing IT staff as well as any future software and hardware needs when the budget is available. Delay may prove catastrophic. Despite incurring an immediate cost, the exercise of encouraging continuous learning and professional development through training programs, certifications, and workshops will prove invaluable when the hard times surface. Skilled and versatile IT professionals can adapt to changing demands, take on additional responsibilities, and contribute to multiple areas within the department. This flexibility ensures that the IT team remains resilient and can handle diverse challenges.
User Group events represent cost-effective training opportunities. In the Oracle community, Ascend (https://ascendusersconference.com) and Rocky Mountain Training Days (www.rmoug.org/page/2346919-home) are great examples. In the Microsoft Community, you need to look no further than for a local SQL Saturday (https://sqlsaturday.com) event. Encourage your organization to do lunch-and-learn sessions. No matter your training budget, there are ways to improve the skills of your team, and you will be thankful you did.
Streamline Operations and Optimize Efficiency
Recession conditions call for cost optimization across all departments, and IT is no exception. Consider streamlining operations and optimizing IT processes to reduce unnecessary expenses. Consider automating repetitive tasks, consolidating infrastructure, and leveraging cloud computing to minimize hardware and maintenance costs as well as reducing, where possible, recurring support costs. Enhancing operational efficiency allows your IT department to free up resources for more strategic initiatives while maintaining or improving service levels.
Ask Your Team to Rise to the Challenge
Leadership matters. Explain to your team your concerns and the impact a recession will have on the business, customers, and personal situations. Emphasize a sense of urgency toward saving the company money now, which will help prevent or eliminate a need for a staff reduction or a delay in necessary IT upgrades. Ask your IT team to identify areas where technology can drive cost savings, process improvements, and create new revenue streams.
Recessions may constitute an opportunity for innovation and strategic thinking that otherwise may not have been considered. In our experience as managers for more than 30 years, people will rise to the occasion when asked.
Seek out innovative solutions and explore partnerships with vendors or technology providers that can offer cost-effective alternatives. Use your best negotiation skills with that same sense of urgency that you have asked of your staff. Vendors anxious to sell their products can make outside resources available that might uncover ways to save money or use their existing technology more efficiently and effectively. By positioning your IT department as a driver of innovation, you strengthen its value proposition and increase its resilience during economic downturns.