Businesses Lean on Tech to Weather Stormy Economic Conditions

Business leaders at large are being faced with the perfect storm — economic pressures and global volatility mixed with supply chain shortages.

This has required all C-suite leaders to re-evaluate their business models, fueling widespread cost reductions across every major industry.

However, rather than immediately cutting costs, businesses need to rethink where and how they are spending their funds to ensure they are being strategic.

A recent Accenture report indicates IT can be a major enabler to help all C-suite leaders capture further efficiencies through the adoption of new technologies in their organizations, like robotic process automation (RPA), artificial intelligence (AI), analytics, and cybersecurity.

The study found that while nearly 70% of executives are investing in technologies including AI, digital tools, and cybersecurity to optimize operations, 80% of executives said that without these investments, their business will see continued challenges to their cost transformation efforts.

While it is clear technology-based transformation is critical for business success, Accenture's research revealed just 37% of executives consider their past transformations to be a success, meaning most efforts fell short of their expectations.

This indicates there remains a gap in the returns expected and those realized from traditional business transformations.

"Without leveraging new technologies that are essential to managing through times of volatility, businesses will be at risk of becoming obsolete," said Robert Willems, global zero-based transformation lead at Accenture. "CIOs should pursue further opportunities to reduce the costs of IT delivery and free up money to reinvest in deploying these new technologies in the business to drive further efficiencies."

He adds there is an increased pressure to further "variabilize" costs.

"The pandemic has made all C-suite leaders, including the CIOs, painfully aware that their fixed costs limited the response to the changes in the business environment," Willems explained.

From his perspective, however, cutting costs alone is no longer enough: What Accenture calls "zero-based transformation" goes beyond cost reduction and instead repositions cost as an all-compassing strategy that leverages new technologies to drive growth and build resilience.

"CIOs should be excited by this shift because it allows them to further position themselves and their organization as key business partners working together with the C-suite leaders and their organizations to identify and drive cost reductions through innovation and the adoption of new technologies," he said.

Willems explained that key to success is a deep understanding of the business, new technologies available, and how these can be leveraged to improve ways of working, decision-making, and efficiencies.

Know the Tech, Know Your Vendors

"My biggest advice is to roll up your sleeves and test what's being sold to you," said Chris Plescia, chief technology evangelist at Aware. "Have vendors install and perform in real time to prove their claims and show the value. Invest your time and the team's time in due diligence. [This] shows you care and are invested."

In addition, this allows you to be the expert at the executive table who can personally talk to the value and benefit, over just someone reading from a prepared slide, he said.

Plescia also recommends leveraging the business cases/problems you are trying to solve as your decision framework and yardstick by how you are planning to make the decision and measure what success looks like.

"Again, the winning solution should check the most boxes on this matrix, more with less," he said. "Make your vendors show the value and prove their AI, machine learning, and natural language processing capabilities. Many claim this, but few can prove it — especially at scale."

Plescia said the best mind frame is to position yourself to be the expert, not the order taker.

"It's great to get input and understand what the business is asking for, but be the expert in the room," he said. "Flex your business acumen muscle in the process and show your ability to understand the problem and the deliver value beyond what was expected."

From his perspective, this earns respect and buys value for IT down the road.

"Don't be shy in showcasing the new value produced for your business partners," he added. "Let them know you have the corporate and their best interests in mind and how IT is driving business value."

CIO 'Superpowers' Called Upon as Wallets Tighten

Paul Deur, co-founder and CEO at ReadyWorks, said from his perspective, anyone can take a hatchet to seemingly unused systems under the banner of "rationalization," but smart CIOs look much deeper and seek to qualify use and necessity in these difficult situations.

"It requires a hybrid approach that not only takes stock in systems and applications used throughout an organization, but also automates direct conversations with frontline workers to ensure that any changes to systems and technologies will not disrupt the natural flow of business," he explained.

CIOs need to take a comprehensive look at everything from application licenses and usage to subscription rationalization, to asset lifecycle management, to storage infrastructure, and networking equipment, among others, Deur said.

"If the tech isn't improving the work you're doing and helping you do it faster and less expensively, then it's not worth investing in when budgets are tight," he said.

As companies begin taking decisive steps to cut costs and improve efficiency in the face of historic inflationary pressures in a newly dubbed bear market, CIOs and IT leaders are being called on once again to tap one of their superpowers — driving cost efficiency without disrupting, or breaking, any piece of the business, Deur said.

"It's a familiar story that happens in a downturn, but with the pace of innovation, technology adoption and reliance, it's getting harder and harder to pull off," he said. "If we've learned anything over the last 2+ years, it's that businesses need to be ready to adapt to changes in the blink of an eye."

This means that flexibility is already baked into your business, across the organization, before something goes awry.

"The companies that have realized this will certainly be at an advantage as wallets tighten," Deur said.