A global recession in the coming year is looking more likely than ever, with warnings from international bodies such as the World Bank amidst rising interest rates and soaring costs of living across the world.
Countries in South-east Asia will not escape the impact of a recession either, with Singapore and Thailand the first countries most likely to be impacted if the US falls into a recession due to their dependence on trade.
With news of such an event on the horizon, the time for businesses to shore up their defences is now. The good news is, according to GoTo's recent survey on How Global Businesses Prepare for an Economic Downturn, 70 per cent of business owners believe it is important to prepare their business for recession and have taken steps to do so.
Bolstering digital defences is one way and many businesses believe that implementing technological solutions can contribute to economic resiliency.
However, many are still not confident about long term stability, should a recession occur. We look at how some businesses in Southeast Asia are preparing for the economic downturn and provide further recommendations on what to do.
Learning from the past
Having previously been through past recessions, South-east Asian businesses know what to expect and how to prepare themselves.
Our survey found that 53 per cent of business owners and executives said they learned what to do to prepare for any potential disruptions to their business having gone through similar experience in the past.
Attitudes also reflect a belief in creating a recession-proof business. To do so would involve creating business continuity plans, equipping employees with the technology they need and creating a company-wide emergency fund.
The top three actions they have taken to recession-proof their businesses are:
- Making plans of action for potential disasters (47 per cent)
- Improving digital security measures (46 per cent)
- Understanding/documenting how to access economic relief (government grants, assistance, loans, etc.) (45 per cent)
Further recommendations for economic resilience
While most businesses are on the right track in shoring up their defences, there is more that can be done on the technology front, from upgrading the hardware to better managing the operational side of things, as the survey findings have shown:
Keep work and office equipment up to date
Close to half (48 per cent) of business owners believe in maintaining work equipment (employee computers, office equipment) on a regular basis as a measure of creating a recession-proof business.
It is important to maintain equipment, be it technology or the physical office environment, and keep it up to date as this can prevent costly repairs when there is downtime, not to mention missed connections with customers for support and revenue generation opportunities. Downtime costs money - small businesses can lose US$137 to $427 for every minute of downtime.
Employee productivity will also be affected, with more than one-third (38 per cent) of business owners facing disruption while doing important work, due to technology issues. The trade-off is between paying now to maintain your equipment or paying more later with costly impact on both business and the customers they serve.
Consolidate tech stacks to reduce the number of providers
Benefits to tech stack consolidation include simplifying and improving processes between various departments in an organisation. At the same time, it reduces the management and costs businesses pay to different providers.
Unfortunately, only 31 per cent of business owners are prioritising tech stack consolidation. To consolidate your tech stacks, look at any duplication of current functions - for example, are various teams using different software to communicate and collaborate within the workforce and with your customers? Look at software used for managing your workforce, customers, inventory, and finance, to see which can be consolidated.
The employee experience is also crucial to ensuring a seamless remote working experience. Understanding the challenges that employees may have in learning new software, or their experience from using disparate apps, will provide leaders with a view on how the software can be consolidated.
Outsource helpdesk or IT support functions
The survey also found that only one-in-three (34 per cent) businesses believe that outsourcing helpdesk or other IT support functions to a Managed Service Provider (MSP) can help in an economic downturn.
Reducing costs is no longer the key driver for using managed services. The priority for organisations has shifted towards improving and connecting customer, employee and partner experiences.
Depending on the MSP you choose, you benefit from your MSP's prior expertise with clients in the same industry and their expertise in various IT support functions including providing network, applications, and infrastructure support. At the same time, these MSPs have dedicated support teams so that you avoid dealing with technical problems and can channel your efforts to more urgent business needs. Any outage that may occur on the servers is also handled by the MSPs.
It is reassuring that many businesses in Southeast Asia have the foresight and awareness on what they need to do to protect themselves against a recession. Most are on the right track to doing so with the steps they are taking and can afford to further strengthen their defences on the technological front with the recommended steps.
The writer is vice president and general manager, Asia Pacific and Japan at GoTo.