Four Steps to Prepare for a Recession

Written by Ryan Squires on October 24, 2019

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Nobody likes to think about a recession, let alone prepare for one. For the most part, people are optimistic and hope for the best. But the old adage, “Hope for the best, prepare for the worst,” certainly makes sense when running an IT organization. Of course, nobody has a crystal ball that can foresee whether a recession is on the horizon. But, just in case one is looming, here are four steps you can take. 

1. Prioritize What Matters Most

Whenever there is a downturn, IT organizations find themselves limited. Difficult market conditions impose external constraints that make it hard to consider lofty objectives. However, the organization still needs to run, so the best thing an IT organization can do is prioritize their programs to ensure that the most critical items have the best chance of avoiding impact. Ultimately, it comes down to what is important for your organization. It could be a cloud transformation project or internal application that is critical for the organization to generate revenue. Or, you could be in an industry where security is paramount and ensuring that those resources are still available may be critical.

Through prioritization, IT organizations discover which programs make sense to combine to increase efficiency. On the flip side of that coin, prioritization delivers clarity to items that can be eliminated altogether. When thinking about how to prioritize, understanding how particular programs and technology affect the organization can help create an actionable, stack-ranked list.

2. Increase Flexibility 

Every organization looks to increase flexibility when facing a recession. By knowing how to adjust quickly, IT organizations can provide themselves the footing needed to weather the storm. When it comes to tools and technology purchases, here are some key aspects to consider when looking to increase your organizational flexibility. 

  • Shorter-Term Contracts: These drive flexibility because organizations avoid getting stuck with financial obligations, should circumstances not improve. This could mean considering monthly billing instead of large, up-front annual payments. 
  • Consultants and Contractors: Consultants, contractors, and vendors can give organizations the flexibility they need — it just comes down to creating and maintaining relationships. Often, in a downturn, vendors will be willing to do more to keep your business – ask and see if they will.
  • Capital vs. Operating Expenditures: Shifting as many costs from capital expenditures to operating expenditures helps as well. Recessions often drive capital spending down (think large infrastructure projects, hardware purchases, etc.), but most organizations try to keep operating expenses near pre-recession levels. 

3. Outsource Labor

Outsourced solutions are a major benefit of the last decade of IT innovation. No longer do IT organizations need to complete low-value, yet necessary, routine tasks. Often, outsourced solutions (consultants, contractors, vendors, etc.) can execute these tasks in a much more cost-efficient manner than internal teams can. Think about common maintenance tasks that need to occur to remain functional, and see if there are ways to solve those through an outsourced service. Where possible, find opportunities like that and run with them. In that vein, a recession can also provide a catalyst to rethink what the internal team does versus what is outsourced. A revitalized, efficient approach can then pay dividends when market conditions improve as well. 

4. Automate Activities

When resources are at a premium but work still needs to get done, IT organizations should automate where possible. Of course, every organization is different, so there are few blanket areas to automate, but IT admins can figure this out by analyzing how they spend their time. For example, do you spend a lot of time on a fairly rote tasks, such as manually managing users, patching machines, giving users access to applications, or resetting passwords? If so, those tasks or others similar are good candidates for automation. In other words, what activities are repetitive and with a little bit of effort can be automated away? IT leaders are often interested in automation for its potential to save huge amounts of time in the long-term. And, for most IT admins, automation projects are great career builders because they often involve assembling interesting technology.

Get Prepared

Preparing for a recession is never on any IT organization’s to-do list. But, the earlier that IT organizations step into this discussion, the better they can prepare. These ideas are just the start of a conversation for an organization to have with their internal teams. Even if there isn’t a recession in the offing, these four steps can be taken now to improve your IT organization’s position.

Once you’ve had those discussions, if you would like to chat with us about how you can best realize your organizational goals, contact us. As the leader in the cloud-based directory services space, our Directory-as-a-Service® platform helps IT organizations streamline their operations, improve security, and get prepared for whatever the market may bring. 

Ryan Squires

Ryan Squires is a content writer at JumpCloud, a company dedicated to connecting users to the IT resources they need securely and efficiently. He has a degree in Journalism and Media Communication from Colorado State University.

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