"Recession Proofing": A Guide for the Thoughtful Leader


Success Favors the Prepared

A few simple steps to weather the downturn and come out ahead of the pack


The financial crisis has business leaders searching for ways to cut costs. Thoughtful leaders are adapting the adage “never miss a good crisis” in order to ready their organizations for the rebound. While that expression may seem a little dark, it may also be a fantastic time to make some hard changes and analyze your spend with greater scrutiny.  Most organizations start by making some hesitant moves – shrinking budgets. Some start putting budgets and buying decisions on hold.  Others start with hiring freezes or delaying project rollouts…while these are all solid actions, do they accomplish what you've hoped for or are you missing opportunities in better understanding your data and analytics footprint?

 

Below are ways some of our clients continuously adjust to the market climate and how they are leveraging our team to to become more recession-proof:


1. Look for New Opportunities in Old Technology: as other companies move away from legacy systems, there may still be opportunities for your company to take advantage of those assets for specific initiatives. After all not all strategic business investments rely solely on the latest and greatest AI algorithms. There is still plenty to do with simple automation and analytics that was always put to the side for the 'next big thing'. By being nimble and seizing those opportunities, you can maintain or even grow your market share during a recession.


2. Use the Recession as an Excuse to Right-Size Your Operation: During growth spurts, we all grow in size. However right-sizing on a downturn proves to be challenging. After all, we developed habits that are hard to get rid of but are purely comfort-driven. What if we go back to basics and trim some of the overhead? What would it mean to our team, our technology and our data - this is a hard analysis to perform but a necessary one. How to increase level of automation so that we can do more with less labor is a significant level to utilize. Many companies put off making tough decisions about their operations because they fear the negative impact it will have on their employees or their brand. But using this time as an opportunity to right-size your operation can be beneficial in the long run. It will allow you to focus on your core competencies and shed non-essential costs. Isn't that why we all go on a self-imposed diet after the holidays glutony?


3. Assess Your Data Footprint and Implement a Tiered Approach: Remember all those years where Big Data stacks were preaching store-everything-discard-nothing? While valuable in the long-run for various analytic models and purposes, in the short-run ask yourself, "what are we truly using?" and classify your data footprint to the following: "Operational necessity", "Immediate or short-term use", and "Long-term use". Then start tagging data assets at a macro level with these labels. As a result, you can map a concrete plan on what belongs in online storage, near-online storage, and cold storage (archival for future need). You always wished that was the case, now is the time to actually do it and reduce your premium storage costs.


4. Focus on Cash Flow: One of the most important things for companies to focus on during a recession is cash flow. Many businesses get into trouble during an economic downturn because they do not have enough cash on hand to weather the storm. By focusing on cash flow and making sure you have adequate reserves, you can ensure that your company does not become another casualty of the recession.


5. Don't Be Afraid to Innovate: Finally, do not be afraid to innovate during a recession. This is often seen as a time when businesses hunker down and play it safe, but there can be big rewards for companies that take risks and innovate during tough times. So, if you have been wanting to try something new, now may be the perfect time to do it!

 

Ways Thoughtful IT Leaders Are Preparing for a Market Downtown and How They are Leveraging OBV to be More Recession Proof

  • Cloud diet - It is so easy to move the cloud, it is almost addictive. Companies have rushed headlong into adopting this innovative technology, but their costs often do not come down and an OBV-led "diet" plan may be in order; set up your call with us today!

  • Prioritize the portfolio - As an industry we need to refocus our efforts and prioritize only programs with a high return on investment. We can start by establishing strategic discussions with business leaders, agreeing upon the goals that are most important for them, then understanding how best we might achieve those objectives — whether through cost cutting or additional revenue generation initiatives like new product development.

  • Financial rebalancing - Evaluation is always key when it comes to finances. If your current budget is under pressure and you don't know where to optimize, we can help! There are ways to get back on track - one way may be using the "zero base" approach--which means evaluating each expenditure as either an actual need or hard cost rather than just charging them straight away without thinking about whether those costs will help identify areas where money could be saved in future (and more importantly). Can you attain a 10-20% lowering of costs by scrutinizing un-used or under-utilized assets to reduce capital expenditures? Our experience says you can.

  • Shovel ready plan - What can be made ready now? What projects are execution ready now? Focus on the near term and projects that can be completed [avoid project delays, increasing costs & creep].

  • Focus on risk - Double down on governance and risk mitigation. Cost & expansion requirement controls.

  • Data Use Optimization - Review the data that you have stored and determine what is worth keeping. Discard any unnecessary information such as common sets or duplicates to make room for new records.


Some real-world examples:

  • Virtual machine that has not been used in X months vs cost cutting around facilities and general Capex

  • Unit cost measurements for data processed in-motion and at rest measured by business data value - does the unit cost go down with volume as expected and if not, what is preventing that from happening and establishing patterns vs reinvention? How do you measure the cost of quality and governance and can you align these costs with the unit cost you developed?

  • Tech debt optimization - where can automation/reinvention reduce actual costs or avoid future costs?

  • Streamlining & optimizing organizational alignment can rapidly save time and lower costs with functional shifts. These shifts can be operational [like hub and spoke], to contractor policies and gearing ratio analysis /manage services provide migrations.

  • 10% BAU reduction – limit costs to adding to the portfolio or do it smaller and negotiate supplier concessions via a “reverse auction”.

 

We work with many organizations that are proactively preparing and adapting to the current business climate and help them achieve more with less. We can act as sounding-boards for you as well - just get in touch?


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