If you’ve kept an eye on the headlines in recent months, you may well be feeling confused. Economists, pundits, and talking heads continue to argue about whether or not we’re likely to see the much-lauded “soft landing” for which the Federal Reserve has been aiming. On the one hand, inflation is easing as interest rates climb. On the other, bank failures, tech layoffs, and declines in new orders for manufactured goods are all worrisome signs.
In the face of so much uncertainty, what’s a wise business decision-maker to do? Many are pulling back on unnecessary spending or delaying projects as they wait for clearer signals about the economy’s near-term trajectory.
As they try to tighten their belts, a number of businesses are decreasing their technology budgets. This tendency is prevalent enough that analyst firm Gartner revised its 2023 IT spending forecast downwards by nearly 50% between October 2022 and January 2023.
By no means, however, are all organizations cutting back on IT. A recent Spiceworks survey showed that even though an overwhelming majority (83%) of business leaders are concerned about a possible recession in 2023, a slender minority (51%) nonetheless plan to increase their technology spending. There’s a logic to this, of course: as business processes – both operational and consumer-facing – are increasingly digitized, technology is becoming the lifeblood of many enterprises, and it’s a place where retrenchment can do more harm than good.
Still, organizations that find themselves struggling with constrained growth – or even facing a period with none at all – will have to ensure that their operations are lean. Many will lean on the expertise of a managed service provider (MSP) to ensure they’re gaining maximum value from every dollar they spend on IT.
In fact, in a survey we recently conducted in partnership with global online market research firm Op4G, we found that a full 50% of technology leaders would actually be more likely to consider or leverage managed IT services during a recession, and another 16% would be much more likely to do so.
This makes sense, since MSPs have extensive expertise operating technology infrastructures efficiently. They’re also uniquely qualified to provide strategic guidance to ensure that their clients’ IT spending will pay for itself within a reasonable time frame. And they have current, practical knowledge about choosing the IT investments that will have the biggest impact on the health of their clients’ businesses.
Here are three ways that managed IT services can help you make the most of a limited technology budget.
Despite the recent layoffs in Silicon Valley, the labor market for IT operations, networking, and security practitioners remains historically tight. In cybersecurity, for instance, there’s currently a global workforce shortage of more than 3.4 million, with over 750,000 open positions in the U.S. alone.
An MSP specializes in these areas, making it much easier for them to fill open positions quickly and cost-effectively. It will always be easier for a provider of outsourced services to recruit in-demand talent (whose expertise will then be shared across multiple client companies) than it will be for individual enterprises to do so.
When an MSP’s team is able to work alongside your internal team to deliver the capabilities you need, you’ll save money, not only on payroll and benefits packages, but also on recruitment, vetting, and training. What’s more, an industry-leading MSP will keep a deep bench. This means that they’ll have access to specialists as well as generalists, in the full range of disciplines (from custom development to cybersecurity to data science and analytics) that are relevant to the success of your technology strategy.
Plus, a top-notch MSP will excel at helping clients build and execute winning technology strategies. Though such planning is always important, it’s especially so during lean economic times, when maximizing the value of every dollar spent on IT is critical to the health of your business.
When times are tough, it’s more important than ever to ensure that the money you’re investing in technology isn’t being wasted. An MSP with extensive experience working with the tooling, methodologies, and processes that are used in IT operations can ensure that you’re putting them to work efficiently.
An industry-leading provider can also lean on a standardized management framework like ITIL (Information Technology Infrastructure Library). This framework outlines best practices for provisioning IT services effectively while reducing costs. Adhering to a framework like ITIL can help you reduce business risk while supporting productivity and growth – all while staying lean.
Leveraging the expertise of an IT service provider will also give you access to tools and automated solutions to help you measure, monitor, and track your technology spending. Such tools can be invaluable for right-sizing licensing or cloud costs, but they deliver the most value when accompanied with the expert guidance that can help you navigate complex trade-offs in ways that will benefit your business over the long term.
During uncertain economic times, it’s advantageous to keep costs predictable. And with the cost of capital on the rise as interest rates increase, it makes a great deal of sense to shift away from capital expenditures (CapEx) in favor of operational expenditures (OpEx).
Fortunately for businesses that are interested in becoming more agile, innovative, and flexible, this shift aligns perfectly with a move to the cloud. The right cloud strategy can not only reduce your management burden and infrastructure overhead, but can also give your organization greater access to the resources it needs to create new products, explore new business opportunities, and keep today’s digitally-savvy customers happy. That’s a win for everyone.
Want to learn more about how MSPs are helping their clients grow and thrive amidst economic uncertainty? Download our latest white paper here.