Recessions are a Great Time for Business Optimization

Yeah, I know. It’s counter-intuitive.

Here’s the common thinking- “times are tough so cut IT”.

It might be hard to believe but it’s during the downturns and slowdowns that you want to double-down on improving your IT systems.

Why?

1. When things are great (like the last 10 yrs) and companies are growing like crazy, many businesses just ignore their fundamental issues. “We are doing GREAT, no reason to optimize right now — no time for that. Besides we don’t need to change. Look at our results!” Sweep those issues under the rug. I worked with a leader who once said “Growth hides all problems”. The reverse is true also “Lack of growth illuminates all problems”.
2. When reality hits that everything is NOT ALWAYS up and to the right, there will be more of a willingness to make changes. As budgets get cut and hiring is frozen or worst case there is a layoff, people tend to be more open to change (often to stay employed). When you can no longer throw headcount at problems, you are forced to think differently and move towards a digitization or automation approach.

So what?

In a recessionary period a CIO needs to double-down on explaining (and selling) the need to automate and digitize business processes. Less headcount does not mean less work! The work still needs to get done so what other option exists other than to automate when you have less headcount?

A CIO’s playbook should include:

1. A CIO needs a proposal to accelerate any automation and digitization efforts. “I will automate these 5 key business processes by end of year.”
2. A CIO needs to push to standardize business process and the systems that support those business processes. “For these specific business processes, we will standardize on <enter solution here> and retire <entire duplicate systems here>”.
3. A CIO needs a plan to eliminate unnecessary system customizations. “Our ERP system is 25% customized, our CRM system is 45% customized. I have a plan to reduce that to 5%, which will save costs.”
4. A CIO needs an investment plan that quantifies business value. “If we invest in this system for $1M, I can eliminate the need to hire another 50 people in our sales ops team.” It will be critical to tell the story that spending $x will yield savings of $y, where y > x.

It may sound crazy but recessionary periods can be a CIO’s best forcing function. Great times create apathy and sometimes arrogance. Recessionary periods bring people down to reality and can be a great opportunity to drive a business optimization strategy.