If IT leaders aren’t already thinking about the impact of an economic recession, their CEOs certainly are. In fact, nearly 8 in 10 business leaders expect a recession in their primary region of operation within the next 12 to 18 months — or believe one is already under way, according to the Conference Board’s C-Suite Outlook Mid-Year. Among CEOs surveyed globally, 15% believe recession has already taken hold while another 61% expect a recession will arrive before the end of 2023.
“While recessions are inevitable, we never know when they will hit,” says Dan Roberts, president at Oullette & Associates and host of the CIO Whisperers podcast. “There is a tricky balancing act at play. C-suite leaders can’t hit the brakes and risk missing market opportunities. But on the flipside, if they continue to invest at the same levels and the economy tanks, they run the risk of spending getting out ahead of revenue.”
A decade on from the last recession, many CIOs have never had to lead their organizations through such economic challenges, Roberts points out. But they’ll be charged with cutting costs and building efficiencies to sustain their businesses through the cycle.
Companies underinvested in technology will be in the worst position. “They’ll have few choices but going into survival mode scavenging coins out of the sofa to save money,” says Peter Pisciotta, managing director and senior consultant at Fine Line Partners. “It’s not pretty.”
IT costs can account for a significant portion of operating expenses (SG&A) and capital investments, so when cost reduction is needed, IT can be at the top of the list for cuts.
“It is essential for IT leaders to have a plan,” says Patrick Anderson, director of technology, strategy, and architecture at global consulting firm Protiviti. “Without a plan from the IT leader, other leaders will step in and that could have devastating consequences.”
Budgeting, IT Leadership
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Source: News