Anthony Lamoureux, CEO of Velocity Smart Technology, the smart locker provider
It’s hard to hide from the doom and gloom messages that are encircling the world around economic uncertainty but despite this, business and technology leaders still have a job to do - and with 2022 coming to a close, 2023 planning must be approached with a growth mindset.
As much as it may seem counterintuitive to spend in times of financial uncertainty, those businesses that make rash decisions to tighten the purse strings and reduce technology investment, may just be the ones that end up being left behind.
By not investing during a recession, you are only starving your business. It is either “slower death” just delaying, but not averting, the eventual downfall, or, at best, leaves you with less available cash and less market share - therefore stopping you from seizing any opportunity that arises once out the other end.
It takes a braver, more strategic plan to invest now when profits are at the highest and money is still largely available from investors and banks. It's been proven in other recessions that if you invest now you will be able to stand out from your competitors, who are most likely hunkering down, taking the deals to be had now and the lion's share of loyal customers “who you supported through the slump”, after things start to improve.
Using Crises To Prepare For The Future
The notion that crises bring great opportunities is an idea that's been ingrained in the popular imagination for decades. And although it might seem like a cliche, it really holds true, especially when talking about adopting new technologies to boost a business.
How come? Because investing in tech during a crisis can better prepare companies for the moment after the crisis is done and allow you to “do more with less” during the downturn, making money go further.
We are all more than familiar with the most recent Covid crisis and if we look back to what we can take from this, it’s those businesses that didn’t sit down, swivelling in their chairs, twiddling their thumbs…
It was those that kept developing their products and investing in new features for their applications, new software for their operations and new technologies for their workflows.
The common denominator is easy to spot: The businesses that were mostly unaffected by the pandemic were the ones already investing in innovative products.
Strategically Investing In More In Tech During A Recession
Here are some tips to help navigate these headwinds without sacrificing growth and to ensure that increased tech spending is put to the right use.
Don’t Stop Buying - Just Be Strategic
Many financial planners will tell you that when the economy stalls, you want to be more conservative in your business investments. Put off major purchases and focus on items that might help you not only survive but potentially thrive. None of that suggests you shouldn’t continue to invest in technology.
You definitely don’t want to go out and unnecessarily revamp your entire office with all the latest gear. But, investing in digital workspace technologies is more strategically placed. This could be confusing to even consider supporting in and launching or developing a new product or solution whilst simultaneously preparing to “batten down the hatches” but actually does remain a viable approach.
Incorporating digital technologies into business operations should still be prioritised. Typically during financial uncertainty, most companies implement aggressive cost-reduction measures to counteract the economic disruption and tend to include a reduction in tech investments.
However, such reductions overlook the fact that loss of productivity due to poor-performing equipment is a billion-pound problem for the UK economy.
As much as it may be hard to even contemplate loosening the purse strings, businesses do need to continue to invest and support technology to reduce downtime by finding ways to reduce losses from productivity.
Whether shifting processes and systems to the cloud, investing in more and better IT support or bringing in new solutions like Smart Lockers, the resources are available for businesses to succeed in the future and bring productivity down.
In productivity terms, IT failures cost workers around 545 hours of lost productivity every year and more than half of workers (56%) report regularly waiting up to three hours to resolve IT issues in the last few years due to remote working.
Businesses investing in newer tech will enjoy improved productivity and lower operating costs. The takeaway: In economic downturns, you should be more careful with spending, but delaying all operational expenditures could hurt your business in ways you can’t afford during these perilous times.
Office space in London is the most expensive in the world – coming in at around 500 pounds per square foot per year for a prime location – so if having a grand central office isn’t as necessary as we’ve been all led to believe, CFOs will be placing that expense under increasing scrutiny.
Letting go of the cubicles and allowing workers to do their jobs remotely with good business laptops will not only eliminate crazy monthly leases and utility payments but quite possibly boost worker productivity.
In fact, our own research has shown that 83% of UK office workers agree that remote working is here to stay, with many now expecting to be able to work wherever and whenever suits them best - from kitchen tables to family villas.
The takeaway: The investment you make in supplying laptops and Wi-Fi budgets to employees to have them work out-of-the-office could possibly offset what you spend each month for office space.
Look Into Managed Services
This could be confusing to even consider investing in when trying to survive an economic recession. After all, when money is tight, who wants to pay for something they can do themselves?
But here’s the thing: outsourcing your IT operations to a managed service provider typically can save between 20% - 30% which can often be financially modelled by the contract, to be given back to you from day one of the new service starting.
Investing in something like Smart lockers technology enables IT Support Teams to quickly and easily secure, manage and distribute hardware. So given that businesses who opt to use managed service providers, expect them to have the skills and access to systems to address issues related to cost, quality of service and risk - it is surely a question of when, not if, managed service providers will implement Smart Lockers, right?
The takeaway: With managed services, companies can free up more time for finding and servicing customers – a critical capability in any recession – by delegating IT device management responsibility to third-party experts.
It's best to invest NOW
Investing in tech during a crisis might feel like you’re splurging on something you don’t need at that particular moment. That’s the wrong approach. It may be hard to see, but it’s best to invest now, when businesses still have the capital to invest in new technology, which can actually work to lower operational expenditure next year, therefore saving money in the long run.
More millionaires are made during a recession than at any other time. If you are clever, hold your nerve and invest wisely now, you will appear the “stronger choice” for your customers. Adopting the proper technologies during a crisis can help you survive it and, more importantly, better position yourself for the time when the crisis is done.