CTOs guide to maximizing the value of tech investments during economic downturns
While the immediate threat of the COVID-19 pandemic is over, it has left multiple economies in heavy debt. And subsequent global issues, such as Russia’s invasion of Ukraine, have resulted in a downturn in the global economy. In a July update, the World Economic Outlook predicted global growth to slow from 6.1% last year to 3.2% in 2022, and 2.9% in 2023.
With inflation reaching record levels, significant energy price increases and the rising cost of household items, consumers across the world face a cost of living crisis. And with a less than temporary reduction in household spending power, businesses can soon expect to see the impact on their bottom line.
We know from experience that in periods of economic uncertainty, digital projects are often canned or stalled. But during times of crisis, the opportunity for businesses to increase the efficiency and effectiveness of budgets – as well as the overall value of their technology investments – is actually huge.
We’ve outlined two of the best, easiest and most efficient ways to do this, as well as the steps to take to get these types of projects over the line.
The background
With the prospect of budget cuts looming, CTOs are being tasked with doing more with less. That might translate as automating processes, consolidating teams, sourcing new tech solutions, or getting more out of existing technology investments.
It will mean different things for different businesses, but the golden thread will most likely be to maximize efficiency and reduce costs. The pressure to continue to innovate and build out new propositions will likely remain in order to stay ahead of competitors and pursue new commercial opportunities while keeping risk at a minimum.
It’s a big ask. But having worked with a range of B2B and B2C businesses to do just that, DEPT® can help you unlock unforeseen pockets of value that stretch budgets further while increasing sales.
Cloud platform review and optimization
Cloud software is integral to future-ready business. So if you haven’t already migrated to the cloud, now is most certainly the time. The focus needs to be on developing a scalable solution to create an agile framework that enables your business to adapt as your market develops and disrupts.
Not only will it go a long way to reducing the impact of rising energy costs, but connecting your teams through the right cloud-based software enables them to be more agile and harmoniously sing from the same sheet.
The key benefits of moving to the cloud are threefold. Geo-redundancy is number one, meaning that users in one market access the infrastructure in that location, and if one region goes down users are automatically routed to the other, forming the backbone of your disaster recovery strategy.
It also offers cost-saving benefits, as similarly to mobile phones, there are fixed contracts or ‘pay as you go’ options available. A ‘pay as you go’ serverless approach allows businesses to only pay when the service is used, rather than paying to have a server running 24/7 in a physical location.
And finally, it provides greater flexibility as businesses can increase capacity when expecting higher traffic volumes, such as around planned sales or campaign or product launches. Plus, once a business understands its traffic volumes through the available data, it can fix its contract at a lower cost to scale capacity in line with business demand throughout the year.
DEPT® has a cloud-first approach and a cloud-agnostic mindset. We are able to deliver consultants and engineers that can help you take your cloud platform hygiene to the next level to maximize efficiency.
Take Triumph Motorcycles as an example. We conducted a full review of its AWS setup, modernized old approaches, optimized configurations and removed unused components to facilitate a 30% reduction of its cloud hosting spend.
Outsource infrastructure management
With technology now serving as the backbone of modern business, even the shortest period of digital downtime can have a significant negative impact on operations and financial performance.
That’s why outsourcing infrastructure management through managed services may be the best option to expertly manage your online infrastructure.
Infrastructure management is less about maintaining your website or application content, but rather about the nuts and bolts that keep them running optimally.
This can involve managing servers and their performance as well as monitoring up and down time, being alerted to any issues and taking action – no matter the day or time.
But not all outsourcing solutions are optimum. For example, an offshore team may not work in unison or in alignment with the time zones that you operate across.
With local and nearshore teams working in a unified way across multiple physical locations, we have seen success in helping businesses reduce costs while upholding the expert standards of a global digital agency.
Our unique culture helps us recruit top talent across the world, which enables us to be ‘timezone aware’, giving clients peace of mind that their digital estate will be up, and running and making money 24/7.
And we’ve seen success come from establishing teams consisting of members located in multiple physical locations, with differing staffing rates that reduce the overall cost to the client.
Such as for Just Eat Takeaway, for whom we provide ongoing support of their commerce platform; as well as for Jotun’s +5 websites, including proactive monitoring and reactive support, content editor helpdesk, and application maintenance services.
Making the business case
It might be easy for an established tech leader to see the value in these suggested approaches. But getting said projects over the line can sometimes be a struggle with final decision-makers, as they often require short-term investment before the long-term benefits can be reaped.
There are two distinct sides of the fence when it comes to making investments during global crises.
Frustratingly, the instinctive (and often more popular) reaction is to cut costs by postponing projects, reducing ‘non-essential’ spend on digital transformation, and scaling back headcount in order to bunker down and weather the storm.
But in reality, recessions and economic crises tend to be short-lived, and are often succeeded by longer periods of growth. And businesses that seek out ways to maximize their existing investments (or continue to make new investments) can drive growth while competitors are cutting back.
During the 2009 financial crisis, according to McKinsey, organizations that maintained their innovation focus outperformed competitors by more than 30% and continued to grow over the subsequent three to five years.
Acting fast is imperative. The most successful technology leaders won’t wait for a confirmed recession to implement solutions, they will take immediate action to boost stability, efficiency and speed that is necessary for business resilience in this economic climate.
While the implementation of digital marketing systems, CRMs, and big data projects have failure rates that exceed 50%, DEPT® has a strong track record of implementing and optimizing technology platforms that have a clear return on investment for clients.
To find out how we can help your business maximize the value of its tech investments and accelerate digital resilience, get in touch with our experts today.
