How to Recession-Proof Your Business for a Global Slowdown
Life’s been good for the past few years, but the party may be over due to a global slowdown, Brexit and other factors. According to Rory Duncan, however, research vice president for cloud service providers at IDC, this shouldn’t stop you from growing your organization.
Duncan will share insights and advice in his keynote presentation, “When the Bough Breaks: Recession-Proofing Your Business,” 3 December, during Channel Evolution Europe in London. In this session, experts and thought leaders will outline ways to recession-proof your business.
Hint: It starts with the perfect tech stack, the right customer deliverables and a rock-solid go-to-market strategy.
In a Q&A with Channel Futures, Duncan provides a sneak peak of what attendees can expect during his keynote.
Channel Futures: What is one of the biggest takeaways you’d like to convey in your keynote?
Rory Duncan: Business partners are increasingly interdependent and interconnected as part of a wider technology ecosystem. This is beneficial during times of growth, but less so during periods of contraction.
Protecting your business against economic recession will become a significant challenge should a downturn happen, but can be mitigated against via differentiation, simplification and relationship development while maintaining a level of innovation in the face of emerging technology and vendors.
|Hear from top industry speakers (such as Rory Duncan) and talk with key vendors, distributors and master agents by attending Channel Evolution Europe, 2-3 December, in London. Register now!|
CF: Can you elaborate a bit on how to grow one’s organization, even in the midst of the predicted global slowdown and other factors?
RD: Unless you are a very large organization, doing one or two things really well – rather than just adding more services or more products – reduces the risk of exposure. Security products and services show increasing demand, as well as performance management, regulatory reporting, customer experience management and anything cloud-related (for the moment).
Similarly, consider vertical specialization in one or two related areas (only). The IT and professional/technical services industries are growing well in addition to the traditional stalwarts of banking (+ insurance), manufacturing (+ retail), telecoms.
CF: Can you elaborate on the ways to recession-proof your business?
RD: Unless you have a time machine or an accurate crystal ball, the future is, of course, unpredictable. However, there are indicators, if you take some time each day to look at baseline financial and economic figures. There are a number of specific things to consider:
- Reduce dependencies on only one or two technology vendors — spread the risk if possible.
- Find yourself a niche and own it — with a strategic partner if required.
- Don’t be too innovative unless you have cash to burn (there are cautionary tales …).
- Offer more managed services (coupled with professional services if possible) to benefit from higher average margins.
- Reduce your dependency on infrastructure components/services if possible — commoditization continues and margins are shrinking.
- Even basic automation will help streamline operations, as well as bundling and standardization of offerings (where possible) to reduce costs.
- Investigate distribution via aggregators and cloud marketplaces. It doesn’t suit everyone, but can be a great source of run-rate business.
There are many more, but this gives you an idea.
CF: Anything else you’d like to convey?
RD: In EMEA, due to the fact that the majority of IT spend goes through some kind of distribution channel, technology vendors need channel partners more than partners need vendors. Previous downturns have shown that the channel is relatively resilient, while many vendors have never recovered.