This isn’t the first time the tech industry has encountered hard times. Listen to the advice from IT execs who have been there, done that, and developed practical ways to survive … or even thrive.
Articles with advice about how to cut IT costs in down business cycles are common enough to have become their own literary subgenre. The answers are usually the same: examine cloud costs, scrutinize software licenses, automate processes, cut wasteful projects, reduce staff, hire more consultants, hire fewer consultants, and vacuum up spare change in the couches.
None of that advice is wrong, and it’s all useful up to a point. However, it doesn’t really get to the nub of the problem. You should never not be looking for places to economize. You shouldn’t waste money just because your CFO is feeling flush this year and is an easy touch.
Here’s the key: If IT is a strategic asset (which we know it is), IT leadership needs to be relentlessly strategic too. That means thinking like a leader whether times are good or bad. After all, if you can’t defend your budget and your priorities during times of cutbacks, whatever were you thinking during the good times?
It’s harder to do it than to say it. But experienced IT execs know lessons can be learned from every down cycle. Here are some tips that your peers—who have been around this particular block a few times—have found useful.
Is this a downturn? Who knows?
Gartner is calling our present situation economic turbulence, rather than using more ominous terms. However, even if the analyst firm predicts that worldwide IT spending will grow 5.5% in 2023, other industries are not on steady ground. According to a February 2023 report from the National Association of Business Economics (NABE), 58% of economic forecasters say there’s more than a 50% chance of a downturn in the next 12 months.
When forecasters are that unsure whether it’s going to rain, listen to what your mother said: Bring an umbrella.
Although IT’s job is to support corporate priorities, the best IT execs don’t necessarily follow those priorities in lockstep. Instead, they find strategic ways to address problems that top executives might not know they have.
When the hammer comes down, be prepared to show how you are supporting core priorities or moving the company forward.
“I think that’s the job of every CIO: to say, ‘How can I use whatever funds I get to make the organization better?’” says Jonathan Feldman, CIO of Wake County, North Carolina. “Sometimes it’s making the organization better, but then you have to kind of connect the dots for people. Does endpoint protection make the organization better? No. But it sure does keep the hospitals running. So there’s value there.”
“Keep the focus on long-term objectives, especially in times of economic hardship,” says Ben Richardson, director of the UK-based software and management training firm Acuity Training. “I’ve seen IT leaders take advantage of downtime to create a more agile IT structure that can respond quickly and effectively to changing market conditions.”
“It is important to have a clear vision and strategy,” says Kelvin Wira, founder of the Singapore-based animation agency Superpixel. “Take the initiative to identify potential challenges and opportunities and develop contingency plans and solutions. This may involve re-prioritizing projects, optimizing budgets, or finding new revenue streams. The business landscape can change rapidly during tough times, so IT leaders must be agile and adaptable.”
That’s just one piece of advice from experienced tech leaders who have been through previous economic downturns. To learn more, read our e-book, Adopting an IT Leadership Mindset in Tough Times, where the experts share advice that can guide you through this critical time. Download it now.