As we enter an economic downturn, smart leaders will use the turbulence to build for the future.
With the U.S. expected to enter a recession this year, businesses must consider how they’re optimizing their IT investments. If done right, this planning will result in reduced expenses, delighted customers and sustained success.
When economic conditions turn sour, a business’s natural instinct is to reduce expenses by suspending new projects, cutting discretionary spending on things like employee training, R&D and marketing, alongside moves like freezing new hires and undertaking staff layoffs. Falsely believing that the digital revolution is over, some businesses may begin to scale down efforts to overhaul their digital landscapes. This would be a mistake. The current uncertainty presents an opportunity to invest wisely in the future. Unsurprisingly, Gartner predicts IT spending to increase 5.1 percent over the course of this year.
Companies need a future-forward outlook in which they consider investing time and money into improving efficiency and squeezing value out of the systems they already have, as this will ultimately prove prosperous.
Embrace Service Design
Service design is the process of seeing the bigger picture and examining the systems that deliver a service to drive efficiency. It is one proven method for enabling various business components to have access to the information necessary to provide improved customer experiences while improving operations. Examples include moving customers to a self-service model, locating points in the physical or digital journey that are causing friction for customers or employees, or finding ways to refocus employees on higher-value activities.
Onboarding consumers efficiently, providing superior customer care in response to inquiries, and encouraging customers to use automatic invoicing are a few examples that come to mind. These three factors by themselves would greatly improve customer satisfaction ratings and retention rates while also freeing up employee time.
Any industries that rely on technology to serve clients should spend this period of economic uncertainty enhancing their digital and physical customer experiences. Customers increasingly demand the same levels of service from other companies that they receive as consumers in their daily lives from the likes of Netflix or Uber.
In order to provide better control, flexibility, and lower total costs, a sophisticated IT team should include individuals who can manage suppliers hired for specific activities. A recession is an excellent time to invest in the process of getting more use and value out of existing systems. Organizations that invest the effort now to review their current structure, capabilities, and technology investments will be better positioned to seize future possibilities and will ultimately gain more benefits from investments that they have already made.
Find Future-Fit Tech Strategies
A future-fit technology strategy entails a customer-obsessed approach that empowers an organization to swiftly restructure its capabilities and business plans to meet changing demands from customers and employees by being flexible, inventive, and resilient. By being adaptive and able to quickly reconfigure business structures, a company will give itself the best chance of maximizing the opportunity to reassess operational processes as the economy slows.
Forrester’s research shows that companies with such a future-fit technology strategy see much better growth than their competitors. They are better able to identify and mitigate risks and invest in the future, whatever the future ends up looking like. A future-fit team using adaptive practices that align teams and outcomes will be better able to recognize important information like whether their IT architecture is set up properly or if customer data is being efficiently shared across the organization.
Forward-thinking companies are now putting the customer at the heart of their strategies, achieving competitive differentiation by cultivating an insights-driven culture oriented at providing customer value in real-time, facilitating customer obsession. Especially as a recession hits, this might be just what companies need to maximize their profits. The approach may also improve a brand’s image and enable a business to develop a staff that has the skills required to develop the next generation of products. This, in turn, will mean those businesses can take the time to build during less profitable times.
The most prosperous businesses prioritize their customers’ needs above anything else. Customers are now at the forefront of all product and technological decisions made by businesses. Building a thorough grasp of its clients and ensuring that its staff and technology can act on that information immediately are both top priorities for a customer-obsessed business’s technology strategy. They may provide their customers with the best-in-class service by concentrating on the non-negotiables of availability, dependability, efficiency, quality, privacy, and security. These are considered table stakes by customers, and businesses have to find new, creative ways to delight customers at every turn, no matter the industry. With the use of databases and AI systems, a business can forecast the risk of losing a client as a customer and take immediate action that best caters to the customer to retain them.
This is particularly significant as retention of a customer can be easier than attracting a new one. During a downturn, retention of existing clients becomes extra important in order to maintain revenue.
Build for the Future
Businesses that make the effort right away to evaluate their current capabilities, IT investments, and setup by investing in a process of maximizing value from existing systems will be better positioned to seize new possibilities when the economy picks up again, and to prioritize pivot efforts when it slows. These sorts of initiatives have the potential to reduce expenses in the short term while improving client retention and competitiveness in the long run.