Over the past while, IDC has written a lot about how a global recession and inflation will affect the ICT market. You might have heard us reference what’s happening as a “storm of disruption.” When you’re seeing investments dry up, leads diminishing, experiencing more supply chain issues, then there’s hardly a better way to describe our current economic situation.
A potential global recession and the “As-a-Service’ technology market
In the summer, IDC addressed the anticipated effects of a potential recession in the ‘As-a-Service’ technology world. This post puts spending patterns into perspective. The trend is clear; in a world where enterprises have shifted the majority of their IT spend to subscription-based cloud and as-a-service options, targeted reductions in IT spend will look very different, compared to the past.
Today’s skills shortage also makes cutting labor a less than feasible strategy. Positions are hard to fill because of a shortage of people with the right skills, an inability to match flexible work models or salaries are unaffordable. Without being able to hire the right talent, more pressure is put on remaining employees to keep pace with business needs and on leadership to execute business strategies, tactics, and development plans. Economic, geopolitical, and personal disruptions are driving workers to look for opportunities with more flexibility and better pay. Keeping and attracting talent requires deployment of new technology and new skills for both IT and line of business (LOB) employees. 25% of companies surveyed said that hiring for tech roles is very difficult in both IT and LOB. Organizations are taking an average of 3.2 months to find the right talent.When organizations are faced with talent shortages, they see reductions in operational efficiency, profits, employee productivity, customer satisfaction and cost savings. Based on the current outlook, IDC has updated its scenario for worldwide IT spending, accounting for what tech suppliers can expect in 2023.
Insights for the tech market
It’s more important now, than ever, to take the time to understand the research available, addressing spending pattern shifts, and changing buyer behavior. This is the insight that can fuel your playbook during a very turbulent economic time. In fact, IDC research reveals that buyers are not planning to make wholesale cuts across all tech categories, but they will be selective about where they cut.
How to respond to this business disruption and thrive:
- Get more granular with your research. It’s one thing to understand the macro effect of the recession on your industry, it’s another to drill down and understand your specific buyers, how they are triggered and how they will be allocating their IT budget for services like yours. IDC helps you understand buyer behavior, with a research practice that integrates unparalleled global primary market research, technology market data, and analyst expertise to provide insight into the needs of your technology decision maker.
- Make smarter GTM decisions by leveraging data and insight when they’re needed. Even in the face of economic uncertainty, limited budgets, and constrained resources, business leaders must still show market growth. IDC’s Data & Analytics Solutions provide data critical for effectively mapping market demand, identifying key customer and partner targets, and positioning and out-performing competitors. Our robust set of modular data products makes it easy to use only what you need and retain budget for other strategic investments in turbulent times.
- When the economy rebounds, you don’t want to find yourself behind the competition. Continue to make strides with your customers by quantifying your business value. IDC’s Business Value practice helps you by quantifying the value of your solution, then giving you the tools out of that research that build awareness and engagement with your buyers and walks them through an ROI validation process, leaving no question left in their mind as to whether they need your solution.
- Help your sales teams convey the value of your solutions, rather than resort to product-feature selling, which will not close the business today. We put together this short checklist to help sales teams change their buyer conversations and start value selling.
- In periods of uncertainty, resiliency and agility are crucial. You need to make decisions, and good decisions should be grounded in custom data, mapped to your business. IDC’s market sizing and assessment framework helps you build a resilient strategic plan to help you navigate today’s business disruptions.
While the news about the economic downturn has weighed heavily upon us, it’s crucial to make decisions based on research, rather than panic. There are tools available that you should be using to drive your decisions, and those tools are grounded in tech market data to help you better understand your specific buyers and markets, navigate your next moves and to enable your sales teams so they can thrive.
While the playbook looks different today, tech companies who suffered less from previous economic storms did so because they adopted agile and flexible planning and work methods. In this way, you can continue to drive your business forward, rather than stand still or retreat.