While Singapore has avoided a technical recession by beating Q3 expectations, the recent mass layoffs across the technology sector could signal an imminent recession. Going into the new year, many businesses are expected to continue the digitalisation efforts that they’ve kickstarted in the past few years, but do more with less.
In fact, IDC predicts technology spending by Asia-Pacific companies will more than triple the economy in 2023, even while companies cut spending across the board. The key is to leverage technology and maintain efficiency in the face of data explosion, security concerns, and shifting IT roles.
- Change is the new inertia. The pandemic caused an upheaval in people’s lives and how they worked. Change is now the new default mode for leaders as they pursue efficiency with an economic downturn on the horizon. With the recession happening on the tail end of a pandemic where digital transformation boomed, companies will respond to the downturn by rethinking the fundamental ways they do things, beyond a tactical approach. Companies will also need to stay agile to retain customers, tapping on solutions like digital automation to deliver faster support and a superior experience.
- Business leaders will be mindful of their IT spending moving forward. In the past two years, IT budgets have funded new innovative projects to address unique problems accentuated by the pandemic. However, business leaders will now look to manage spending in a way that enables efficiency and agility.
The 2022 Systematic+ State of Business Technology report (which surveyed over 500 IT and business technology professionals from companies with over 100 employees in the United States) revealed that 20% of the respondents say they would put their budget towards innovation, while 16% say they are not able to at all. With cost cutting imminent, business technology teams are expected to get more done with limited resources and adopt a more pragmatic approach to innovation.
- Companies will have to empower staff to become tech-enabled. Amidst global headcount freezes and layoffs, there is still a pressing need for companies to build up business technology capabilities and solve technical problems. In response to the talent crunch, companies may look to empower their existing business teams with low/no-code automation tools. This will enable even non-technical staff to automate and drive business efficiency independently and relieve the technical debt of the remaining IT staff, allowing them to focus on strategic projects.
- Automation is not just about RPA anymore. There has been a lot of chatter around the next frontier of automation, with the infusion of AI/ML into automation strategies. Looking beyond an RPA-led strategy that focuses on automating discrete tasks, companies will need to think deeply about where they are going to spend their money on building foundational, enterprise-wide automation strategies. Instead of investing in small-value gains and short-term solutions, companies must start thinking about end-to-end process automation and holistic transformation across multiple departments and applications, to unlock greater value in the long-term.
- Efficiency is key amid economic recovery. While end-to-end automation requires a total buy-in from the entire organisation, automating segments of the business to adjust to 2023 realities will pay off with increased efficiency and resilience in the face of economic headwinds. Technology-oriented organisations with elasticity, scalability, and agility will drive efficiency into the core of the business, emerging as lucrative and creating appeal to investors, consumers, and employees.
- Building a resilient tech stack for the digital age. Digital initiatives are accelerating in the current economic condition, a continued trend from the past two years. With cyberattacks on the rise, companies will continue to invest in cybersecurity as well as cloud applications and data analytics. All three investment areas are crucial as secure networks are needed to support cloud applications that give access to new data, with low-code automation as one of the most cost-effective tools to help citizen developers streamline business processes that are increasingly critical for today’s modern enterprise.
Moving forward, business leaders will need a pragmatic approach to modernising business processes and tackling the talent challenges that lie ahead. With rising inflation, challenging supply chains, and increasingly expensive talent, the upcoming year could present a great opportunity for company leaders to take strategic risks, outmanoeuvre the competition, and come out stronger as the market emerges from turbulence.