In most enterprises, IT costs take up a significant portion of operating and capital expenses. CIOs have the power to manage and control these costs, building efficiencies to ensure businesses can tide over the tough times a recession brings.
CIOs can balance technology investments for business growth even under challenging economic conditions. As companies anticipate a recession, IT leaders need to proactively reassess contracts, project lists, and tech portfolios and plan to curb costs. Here are a few ways CIOs can curb costs during a recession.
Migration of Workloads to Cloud
Companies will be increasingly shifting workloads to the cloud. This migration will restrict the amount of money that is being used to save non-migrated data. This transition allows the companies to consolidate the tech stack, making it more efficient with analytics and allowing tracking of the expenditure. All the members of the workforce need to have the experience to establish a successful collaboration. Cloud will lend itself to serving businesses with dispersed workforces whether they are in-house or remote.
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Diminish Redundant Systems
Redundant systems are a great target for cutting down costs. Businesses need to take time to evaluate the best asset base for the hardware and software for rationalization and consolidation. CIOs need to make sure that the elimination of redundant systems makes financial sense otherwise the businesses are at risk of taking a financial hit after depreciating decommissioning. An organization needs to establish a team for an intelligence cost management strategy that would aid in the financial analysis and provide decision support.
Embrace Emerging Tech
To align with business goals and improve business performance, CEOs trust CIOs to establish a progressive and forward-looking technology solution to make businesses efficient and effective. Solutions like customer data platforms and AI/ML-powered applications can be utilized for providing value to the business that will alleviate overworked marketers. These technologies need to be reviewed by the CIOs to ensure the budgets are assigned appropriately. At the same time, CIOs need to assure that the investments are aligned with ROI-generating projects.
Halt Low-Priority Projects
During a recession, there is a high possibility that enterprises have numerous IT projects running.
To ensure much-needed liquidity, CIOs need to abandon or delay non-important capital-intensive projects to save costs. They need to address the pending investments and need to focus on critical investments that will sustain the business through the recession.
Re-evaluate IT Services Contracts
Contracts are usually automatically renewed without reassessment or optimization. IT leaders need to make sure that the partners are strong financially and are not on a verge of decreasing their investments in services at a point where the brand performance and quality may suffer. As recession also hits hard on vendors, CIOs need to collaborate with partners who deliver better values and identify cost-reduction opportunities. They need to ensure that supplier obligations are reduced, which will permit a transformative change. A solid strategy to reduce costs by rationalizing units is a better way to negotiate with a vendor.
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CIOs continue to evolve at a fast pace while anchoring on IT services and applications to make businesses more efficient, effective, and profitable. It is necessary to plan a survival strategy before the recession hits which will secure the enterprise during these tough times. With efficient cost optimization, businesses can focus on leveraging progressive technologies by migrating appropriate infrastructure to the cloud consolidating their existing tech stack.
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