Recession Advice to IT Sector & How to Change Strategy
Updated: Sep 8, 2022
Do you know that the IT sector is also experiencing a recession? Yes, it does! While a recession may not be the true challenge for the Software Development Companies, it will be crucial for IT firms to balance the impact on sales and margins as margin pressure is anticipated to increase, along with a decline in revenue per employee.
Given that a portion of India’s IT revenues come from the US, the US and worldwide recessions represent a threat to India's IT growth for the current fiscal year. Between 40 and 75 percent of the profits made by Indian IT companies come from the US market alone. The top five companies, Tata Consultancy Services, Infosys, Wipro, HCL Technologies, and Tech Mahindra, have more than 50% exposure to the US market
Most effective technologies used in Recession is:
Executives analyzing the budgets of various departments can be tempted to reduce spending on IT and technology. Leading experts from CNBC, Gartner, and other Software Companies have identified the top technologies that can be helpful during recessions as:
1. Artificial intelligence & Machine Learning
Machine learning is a technique in artificial intelligence (AI) and computer science that focuses on using data and algorithms to mimic human-learning processes and progressively increase accuracy.
2. Data Science
Data science is the study of how to obtain valuable information from data for business decision-making, strategic planning, and other purposes by using cutting-edge analytics tools and scientific concepts.
3. Cloud technology
Cloud technology allows users to access storage, software, files, and servers via internet-connected devices such as smartphones, computers, tablets, and wearables. Cloud computing providers store and process data in a location that's separate from end users.
4. App development
Application development is the process of creating applications and running them on mobile devices. Android and iOS are the platforms. From your phone, you may keep track of inventory or post immediate updates.
5. AR & VR
Virtual and augmented reality (AR and VR, respectively) connect the digital and physical worlds. They give you the chance to collect knowledge and stuff visually, much like you do when you see the outside world.
Cybersecurity is the activity of defending systems, networks, and programmers from cyberattacks. These hacks often aim to disrupt normal business operations, extort payment from users, or access, alter, or delete critical data.
It's an opportunity to test out disruptive ideas and technology and reimagine business for the next ten years. In order to ensure that these innovations receive the proper financing and that the appropriate risk appetite is set, the CIO-CFO connection is essential.
Whether a recession is near or a bit in the future, we have to be prepared for it.
Update your resume. For job seekers, the labor market has been robust, but if a recession occurs, this will change.
Try to reduce personal expenses
Pay down debts
Invest in long terms
Have emergency fund
Keep your credit score high
Have additional income
Live within your means
While every Software Development Company and organization is unique, they must each choose a distinct strategy to deal with a recession. When it comes to technologies that can transform a recession into an opportunity, there is no one-size-fits-all answer. Even in the toughest crises, benchmarking plans and prioritizing assets can produce high-value returns. So, how are you upping your strategy to lessen the impact of recession on your organization?
(Author: Praveena Battila is a chirpy & inquisitive digital marketing executive at TechDoQuest.)