Economists have been forewarning of an upcoming recession in 2023 which naturally has many organizations on edge and concerned about organizational outlook in the new year. Many will likely be looking for areas to scale back spending in. With some industries, tech namely, already feeling the effects of a downturn, it seems counterintuitive for organizational leaders to want to invest in emerging technologies to help streamline and propel their digital transformations.
However, according to a survey conducted by global consulting firm, KPMG, now is still as good a time as ever to maintain, and even scale up investment. The results of the survey found that an overwhelming “95% of tech leaders at both private- and public-sector organizations in Canada plan to invest.”
Many digital leaders are aware of the importance of investing in emerging digital technologies even in the face of economic uncertainty; because that investment can have a direct and positive impact on profitability. The digital transformation journey, although not a new concept, has proved fruitful for many companies with “26% of Canadian tech leaders surveyed reported profit hikes between 6-10% directly resulting from their transformation journey, while 19% experienced an 11%+ increase in profitability and 54% a 1-5% hike.”
It makes sense. Organizational efficiency is always a top priority but especially so in a recession when the financial top line is more important than ever and increasing efficiency, through all organizational aspects, will positively impact ROI.
Thorough and accurate data, which can only be obtained with strong, robust tech, is key to understanding your consumers better and where your organizational strong points and weak points lie; all key to improving efficiency and lowering your cost per acquisition.
Personalization is key to ensuring brands get the most out of every dollar they spend. Consumers always want to feel understood but during a recession, the demand for understanding is even greater. But for effective personalization, you need access to high quality data and analytics.
According to global advertising technology firm, MiQ, the most popular tech solutions marketing professionals plan to invest in are customer data platforms (37%) and segmentation and targeting solutions (32%); both paramount in providing personalized experiences to consumers.
Sanjay Pathak, partner and national leader, technology strategy and digital transformation services, KPMG in Canada says “at a time when digital leaders face rising costs, a potential recession, and a global talent crisis, they are turning to emerging technologies to build business resiliency, harness data and analytics to enhance decision making, and drive growth.”
An investment in your digital transformation is an investment in the financial well-being of your organization, and one that will be rewarded if done effectively. However, organizations should do so in conjunction with brand marketing investments. Author, public speaker, and consultant, Peter Fields, stresses the importance of maintaining brand investment and that cutting your share of voice ad spend leads to a “subsequent loss of market share that follows will be extremely difficult and expensive to regain during the recovery.”
Thus, the best course of action for brands to take in a downturn, or when preparing for a potential downturn, is to continue to invest in your digital transformation journey while maintaining or even better, increasing brand investment. Doing so will ensure your organization is positioned strategically, ahead of your competitors, as the rest of the world bounces back from the downturn, if or when it ever formally arrives.