How to Weigh Technology Investments When the Market Turns
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Major upheavals in the markets and uncertainty around the Fed’s actions have caused many firms to reassess their spending in 2023 and pull back on certain costs. In the past, one key area where my firm saw companies cut budgets was technology expenses. Some firms believed they would save money during downturns, aiming to catch up years or months later when the market rebounded.
But playing catchup is misguided. Fortunately, based on data my firm collected this year, some firms are beginning to change tack, recognizing that cutting technology spending during market downturns is not the optimal approach for keeping pace with innovation and digitization standards.
Firms that have cut budgets in the past are now learning that regardless of market fluctuations, it is pragmatic and indeed essential to continue making ongoing technology investments. This holds true even if they can only afford to drive incremental change during times of constrained cash flow.
For organizations thinking about cutting back their technology investment because of recent volatility, here are a few considerations to give you pause.