With an economic slowdown all but inevitable, recession is top of mind for most business leaders. If it happens in the near term, it will be a financial cycle like none other.\n\n\u201cWe have record low unemployment, with record high inflation. We have prices for technology and services higher than any CIO, IT leader, or business owner has to deal with,\u201d says Ryan Prindiville, partner-in-charge of consulting at accounting and business consulting firm Armanino. \u201cAt the same time, businesses are coming off of record growth over the last couple of years. So you have a dichotomy that business leaders, forecasters, and prognosticators have never seen before.\u201d\n\nCost cutting ahead of recession is conventional wisdom \u2014 and there are certainly some targets for reduction that would have limited negative impact on the business. \u201cBut better wisdom is to take the opportunities to accelerate investments to improve efficiency long term,\u201d says Rick Pastore, senior research director and IT advisor at The Hackett Group.\n\nCIOs may want to invest, for example, in migrating systems to the cloud because you want the ability to scale up or down in a recession. \u201cThere may be investments that IT leaders and CIOs need to make now to withstand and sustain a prolonged downturn,\u201d agrees Prindiville.\n\nThese ventures aren\u2019t necessarily short-term fixes. \u201cIT leaders ought to be planning for a more flexible environment over time, but these are three to six months exercises,\u201d explains Michael Fuller, principal at The Hackett Group. \u201cThe goal is to think about how they might change the technology organizations holistically and consistently, making sure those investments are leaning out the base and creating flexibility.\u201d\n\nTo get ahead of the pending economic outlook, IT leaders should consider making investments in the following areas, especially where such shifts can reap long-term operational benefits, recession or not.\n\nEnabling better insight into costs and value\n\n\u201cIT leaders should maintain a deep understanding of their cost structure as well as the value that the IT services and investments provide to the organization as a whole,\u201d says Patrick Anderson, director of technology, strategy, and architecture at global consulting firm Protiviti.\n\nIf you don\u2019t already have this transparency and clarity, now is the time to invest in creating it, as doing so will enable you to make intelligent moves to free up costs or support additional investments.\n\nKnowing how each aspect of the IT infrastructure supports the business is also critical. \u201cIn most organizations, this information is tribal knowledge and is not easy to access or action,\u201d Anderson says.\n\nGoing cloud native\n\nBoomi recently made the transition to a cloud-centric stack with investments in cloud-native applications and data integration tools. \u201cWe no longer rely on legacy solutions that require large teams and budgets or lots of manual work to implement changes or new integrations,\u201d says Boomi CIO Neil Kole. \u201cOur transformation initiative has resulted in high employee satisfaction scores, lower IT cost as a percentage of revenue, and faster ROI on our investments.\u201d\n\nGetting real with FinOps\n\nCIOs looking to optimize their cloud costs can invest in FinOps to more accurately manage IT asset costs. FinOps is a business management discipline with accompanying analytics software designed to calculate cloud costs to help organizations better plan, budget, and forecast cloud consumption and spend. \u201cThis provides the transparency to better align your cloud spend with the business value being delivered and eliminate potential waste or misalignment,\u201d says Protiviti\u2019s Anderson.\n\nDoubling down on agile\n\nIf you haven\u2019t already invested in agile approaches, skills, and processes, let this downturn push you toward that change. \u201cCreating an agile toolset can\u2019t happen overnight,\u201d says Kole of Boomi. \u201cIf your business hopes to stay resilient through a potential recession, now is the time to begin making that transformation.\u201d \n\nEmbracing agile will enable IT to increase the frequency of business check-ins creating greater alignment with business priorities and direction. \u201cIt should be a requirement that an agile methodology is used to ensure effectiveness in a shifting environment,\u201d says Eugene Kuerner, CTO at expense management software provider Center. \u201cIncreasing the frequency and depth of agile methodology during challenging times underlines connecting and executing to rapidly shifting business challenges.\u201d\n\nCollaborating and getting clarity\n\n\u201cThe smartest step an organization can take is viewing it as an opportunity to embrace the downturn wave, and intentionally emerge from the recession stronger,\u201d says Stanley Huang, co-founder and CTO at Moxo. \u201cOrganizations should take a step back and outline an overview of their organization\u2019s current business situation \u2014 identifying cash-flow trends, and cost structure layout in as much detail as possible.\u201d\n\nWorking closely with the executive team to map out that overview enables IT leaders to focus not just on blindly cutting costs but shifting spending. \u201cWithout a clarified company overview strategy, IT managers are more inclined to make ad-hoc decisions, whereas they should be spending the time on aligning IT goals with the overall business goals,\u201d Huang says.\n\nUpping the analytics ante\n\nWant to make your finance organization happy? One of the better investments IT organizations can make now is in advanced business analytics and intelligence, giving the organization better tools to understand their own spend.\n\n\u201cInvesting in more analytical capabilities, smarter reporting tools, and greater transparency around what\u2019s being spent and why will enable smart CFOs to make better decisions,\u201d says Pastore of the Hackett Group.\n\nAccelerating efficiency plays\n\nGetting ahead of the potential economic fallout is beneficial, and CIOs should push for and protect those projects that will increase efficiency and productivity. \u201cAccelerating initiatives that would otherwise be at risk should be seriously considered,\u201d says Erik Bailey, CIO at IP software and services company Anaqua. \u201cAny initiative implemented now that reduces cost or increases efficiency will result in a better overall position if a downturn does impact the organization.\u201d\n\nThe Hackett Group found that the highest performing 10% of IT functions automate 2.1 times more business processes than their peers. As a result, they achieve a 47% greater reduction in the cost to run and manage technology. Some functions ripe for greater automation ahead of recession include HR, finance, and IT itself.\n\n\u201cAny IT leaders concerned about a possible financial fallout due to recession should focus on implementing automation and low-code technologies to enable citizen developers and integrators within their organizations in order to free up their IT team members\u2019 time for more impactful work,\u201d says Boomi\u2019s Kole.\n\nPursuing promising new technologies\n\nNow is not the time to go into heads-down, defensive mode. CIOs and their teams should keep their eyes out for opportunities to invest in emerging technologies. \u201cPay close attention to emerging technologies,\u201d advises Huang of Moxo, \u201ckeeping a pulse on technologies that can benefit your organization from an internal and external perspective.\u201d\n\nReallocating operating savings\n\nIn a recession, IT\u2019s operating costs may naturally go down. Smart CIOs will divert some of those idle operating costs to new initiatives rather than losing that money to another part of the business or banking it. \u201cDivert that into infrastructure efficiency projects to accelerate existing projects,\u201d says Pastore.