With the threat of recession looming over the global economy, all major developed countries, including the United States and most of Europe, are bracing for economic hardship. In October 2022, Pierre-Olivier Grinchat, chief economist at the International Monetary Fund, said: Mentioned on IMF Blog“The economic slowdown in 2023 will be widespread, with countries accounting for about a third of the global economy expected to contract this year or next. The three biggest economies – the US, China and the euro zone – will continue to stall. right.”
Similar sentiments were observed at Davos during the World Economic Forum's annual meeting.At the World Economic Forum Chief Economist's Outlook, January 2023a WEF survey found that “almost two-thirds of economists surveyed by the World Economic Forum expect a recession to occur in 2023.”
As an entrepreneur or business owner, how can you create a recession-proof business? How can you make sure your business stays ahead of the curve, even when the market is slowing down?
The answer to ensuring the survival and sustainability of startups and businesses lies in the Fourth Industrial Revolution. Rapid industrialization is always pushing the world out of stagnant markets and this leads to his 21st century digital transformation.
Leveraging technology can help your business survive recessions and secure its future.Before we dig into the evidence of this recession. digital transformationIt's important to understand how a recession will affect your business.
Impact of recession on business operations
As the world becomes increasingly interconnected and globalized, recessions in major developed economies often have ripples throughout the world. As the global economy heads towards a slowdown, businesses around the world, large and small, will feel the effects in the following ways:
sale
During recessions, people spend money on necessities. This affects the company's overall sales. The total demand for products and services decreases, leading to a decrease in sales. Depending on the period, companies may face inventory bloat.
capital
With less money circulating in the economy, raising capital becomes an increasingly difficult challenge during recessions. Venture capitalists, investors, and money markets remain skeptical about issuing capital, and small and medium-sized enterprises find it difficult to continue operating with limited means.
Labor force
With less capital available, companies often have to decide to reduce their workforce. It's tough, but we're already seeing this happening with big tech companies like Twitter, Meta, Microsoft, and Google. And as predicted by industry experts, this trend could be witnessed throughout his 2023.
Cyber security challenges
Data released by the Internet Crime Complaint Center (IC3) in the United States clearly shows that during the 2008 subprime crisis, there was a significant increase in online crime complaints at the peak of the recession. In 2009, IC3 received a total of 336,655 complaints, an increase of 22.3% compared to 2008. His total financial losses related to online fraud have ballooned to $559.7 million, more than double his $265 million loss the previous year.
The immediate cause may lead to a lack of funds circulating in the market, driving more people into illegal and fraudulent activities to survive. Companies therefore face significant challenges in terms of cybersecurity, a challenge made even more real by the limited capital available to protect their digital infrastructure.
However, that being said, there are ways to survive these economic downturns, and businesses can become more resilient and secure against these cybersecurity concerns. Cloud computing is one of the technologies that provides businesses with enhanced security and immunity from cyber threats.
The idea of making business recession-proof
The current recession has been predicted for months, but its arrival came as a surprise to many. Organizations around the world are grappling with the uncertainty of whether this problem will continue, worsen, or recede. To ensure your business is resilient to downturn conditions, you must prioritize preparing for and recovering from disruptions.
Building a recession-proof business means making your business resilient to shocks, able to experiment with innovation, and equipped to take advantage of the eventual economic upturn.
One of the most effective strategies for businesses to survive, recover, and be prepared is to continue investing in technology. By making informed investments in the right technology and services, your business will likely come out on top. This is because remote capabilities, social distancing, and increased digital investment have replaced traditional survival strategies.
Especially in difficult times, we emphasize: Digital transformation helps companies overcome challenges smoothly and efficiently. There are specific pain points that this digital transformation addresses. Some of them are:
- Remote operations have limited sales force availability, increasing the need for digital tools and systems to maintain workflows
- Increased demand for remote in-house functions due to staffing shortages
- Increased threats due to reduced workforce maintaining servers
according to Harvard University Business Review Surveyservices performed based on technology investments such as smart healthcare, automated supply chain and logistics, and fintech., Intelligent education services remain in high demand as they prepare for change.
Therefore, investing in technology can help you grow during recessions and make your business recession-proof and sustainable. Understand how investing in the right technology can help create a recession-proof business.
[Also Read: Defying Economic Downturns: The Success of Companies Founded During Recession]
What technologies can help make your business recession-proof?
technological advances such as AI/MLInternet of Things (IoT), cloud computingbig data, blockchain, and more have provided organizations with lower-cost solutions to strategic business challenges while delivering higher ROI than ever before.
Some technologies streamline workflows and improve efficiency while building a robust architecture for your business. Investing in some or all of these technologies can help you stay competitive during economic downturns. There are many strategies you can implement to make your business recession-proof, but the most reliable strategies are:
- Use advanced relationship mapping and management tools SRMSCM, and CRM are embracing smarter, faster ways to scale up business development.
- AI-powered analytics in business provides unparalleled data quality for business insights and market updates
- Automation solutions eliminate hours of administrative tasks for employees, increasing productivity and time utilization.
- Intelligent data collection and management solution Deliver better ROI on large investments and make your business the best it can be during recessions.
These applications are just a few of the ways technology can help businesses recession-proof. But talking about technology is part of the solution. Let's explore the real impact leveraging these technologies can have on your business.
How can businesses become recession-proof by leveraging technology?
From managing large amounts of data to maintaining and strengthening relationships or delivering an omnichannel customer experience, digital transformation impacts every aspect of business. Here's a snapshot of what the impact is:
strengthen relationships with customers
Technology always helps Personalize the customer experience and strengthen relationships between companies and customers. AI trends, software and app development, and modern software systems provide important customer insights that help you stay up-to-date with user demands. Develop a custom CRM Capturing targeted leads and nurturing existing relationships is extremely helpful for your business and will benefit your business for years to come.
Improved internal efficiency
Rather than cutting back on services or staff, you can strengthen your business's internal capabilities by choosing the right business model that runs on modern technology.Investing in chatbotsremote customer service, e-commerce applications and strategies, and improved logistics to serve customers more efficiently. moreover, Embrace a data-driven culture completely Corporate digital transformation Make strategic business decisions even during economic downturns.
Increase sales and productivity
During a recession, competition becomes even more intense, with the same number of companies competing for a smaller piece of the pie. As a result, some organizations need help converting leads into customers or even acquiring them in the first place.However, companies are using productivity apps and Enterprise resource planning (ERP), cloud-based development.
Pro tip: If your business doesn't primarily operate on the cloud, now is the perfect time to invest. Cloud data migration strategy Achieve maximum scalability and agility.
Our approach has made organizations recession-proof
With nearly a decade of experience, we have the practical expertise to transform businesses to increase productivity and deliver better results, even during economic downturns. Two such examples are shown below.
When Americana Group approached us, we knew the size and complexity of their business required a creative solution. After all, in one year he released his 18 mobile applications of 5 brands in 7 countries, which is no small feat. But for our dedicated team, it wasn't even rocket science.
After months of hard work, we built a robust digital ecosystem that supports the brand's needs to process 50,000 orders every day.In his first two weeks after publishing the app to the store, 15,000 users downloaded the app, so the conversion rate was Kentucky Fried Chicken and pizza hut They rose 28% and 30%, respectively.
Similarly, we Improved supply chain visibility Global heavy construction and mining equipment manufacturer uses 60% AI and analytics solutions. We also designed and developed intelligent supply chain software solutions to help us better meet our customers' needs. The result was a 30% increase in operational efficiency and a 40% reduction in transportation and logistics costs.
How can Apppinventiv make your business recession-proof?
As we are at the forefront of digital transformation, we are very fortunate to have helped many clients unlock their digital potential after being stuck in a siled approach.our Digital transformation services and solutions Drive significant business benefits through business process optimization and system automation. Are you looking to make your business recession-proof and future-proof? contact Talk to our experts.
FAQ
Q. Why is there evidence of a recession?
A. There are four characteristics of businesses that are resilient to recessions. Recession-resistant businesses are:
- Operate with the latest technology and digital solutions
- Can provide products and services that are in demand
- Serve customers while protecting against recession
- Technically and strategically prepared to adapt to any market needs
Q. How can businesses prepare for a recession?
A. Preparing for a recession starts by investing in adaptable technology and digitally transforming your business processes. Investing in technology will further help you expand your customer base, reduce additional expenses, diversify your marketing channels, manage your inventory and warehouse, and manage your credit resources.
Q. How can I use technology solutions to make my business recession-proof?
A. During economic downturns, you can invest in a variety of competency-based technology tools and software systems, customer support solutions, CRM software solutions, premium security software, and remote working solutions to sustain your business.you can Talk to industry experts Adapt technology services according to customized business guidance.
Saurabh Singh
Representative Director and President
