3 suggested strategies for CIOs to navigate the next recessionInflation is rampant and a recession is looming. CIO’s must balance keeping their lights on with reduced budgets whilst still carrying out automation and digitisation initiatives across their organisation. It comes at a time, where the shortage of tech talent is getting worse. As Pat Phelan, Rimini Street VP, Market Research warns: “Businesses are moving full-speed toward a collision. Companies are going to need people during a time of historically low unemployment but at the same time are going to suffer budget cuts due to economic recession.” The challenge for CIOs and development managers is to find a roadmap and strategy to navigate these trends.

A tech talent shortage

The shortage of IT professionals has dominated headlines for well over a year. Some of that is due to the number who have retired (on time or early) or left because of burnout. As many depart the workplace entirely, their replacements’ production is failing to keep pace with demand.

In fact, while hiring good employees is getting harder, the need for them continues to increase, and that is especially true in the IT world. To summarise its recent report on industry hiring, tech placement agency Hired says, “The demand for software engineers is simply not slowing down. We’ve run out of ways to describe how much it’s increasing.”

The obvious causes of this trend are also reasons to believe it will not disappear quickly. As technology continues to spread into every aspect of modern life, it also continues its spread into parts of the globe where it has been unknown. More people are joining the digital world, and everyone in that digital world expects more from their technology. The tech worker pinch isn’t going away.

Recession: A double whammy

Meanwhile, economists are warning of a recession, which portends rigorous spend-reduction. Microsoft, Amazon, Peloton, Netflix, and other firms recently announced layoffs. Reports indicate that Oracle plans the same. They are far from alone. Across the industry, tech titans and smaller outfits alike will need to trim costs.

Companies across virtually every industry will continue to feel these pressures, and their leaders will be forced to make hard choices. “I believe it’ll be tiered by industry and type of job,” says Phelan. “Everyone’s going to have to cut, but it’ll be difficult to force a cut in some places, and some cuts can damage your business in ways you can’t recover from.” The savvy CIO will recognize this trend and separate must-haves from nice-to-haves. “Yes, we all understand belt-tightening, but you’ve also got to keep the lights on. That’ll force CIOs to be creative,” she adds.

How to soften the blow

When you know the collision is imminent, it’s wise to prepare for it. Phelan suggests three actions for CIOs to take now as they brace for the impact.

  • Figure out the must-haves. “To keep any company running, there are some IT services and skills you can’t cut budget on,” she says. Determine those and make the business case for retaining their funding.
  • Align priorities. “Now more than ever, CIOs will want to make sure their spend on the back end agrees with the overall business strategy on the front end,” advises Phelan. CIOs must understand the organization’s priorities and help leadership understand the IT costs of achieving those priorities. That means, she adds, “the CIO has got to be a trusted partner to the rest of the C-suite.”
  • Draw your own roadmap. “Recognize that your IT vendor’s vision for the future may not necessarily match yours,” Phelan recommends. A company’s strategic priorities should drive the plan for applications. For example, software vendors often advise costly upgrades without accounting for how they will be used. A company might opt instead to retain older, still-functioning software that serves its purpose, using the savings to invest in upgrades that are truly necessary. Third-party providers can soften the blow in two ways: by maintaining companies’ older versions or custom software and by providing the needed support at a lower overall cost.

The collision of the tech talent shortage and recession cutbacks is coming, says Phelan. Many companies are feeling it now. CIOs play a crucial role in seeing their organizations safely through it.

This piece was written in collaboration with Pat Phelan, as she is the main contributor she is listed as the author.

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Rimini Street, Inc. (Nasdaq: RMNI) is a global provider of enterprise software products and services, the leading third-party support provider for Oracle and SAP software products and a Salesforce partner. The Company offers premium, ultra-responsive and integrated application management and support services that enable enterprise software licensees to save significant costs, free up resources for innovation and achieve better business outcomes. To date, over 4,800 Fortune 500, Fortune Global 100, midmarket, public sector and other organizations from a broad range of industries have relied on Rimini Street as their trusted application enterprise software products and services provider.


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Pat Phelan
Pat Phelan is responsible for research across the enterprise software market, including applications and technology strategies, software vendor support, third-party support, IT leadership discussions, business development and sales execution by providing enterprise software licensees with quantitative and qualitative strategic insights. She works across the organization to support planning for – and management of – the enterprise applications roadmap. Prior to joining Rimini Street, Ms. Phelan spent 18 years with worldwide analyst firm Gartner, where she served as research vice president for enterprise software and ERP products, and was the leading analyst covering third-party enterprise software support. During her time at Gartner, Phelan provided thousands of CIOs and IT leaders with research and advice on strategies and options for managing the business application life-cycle and costs, and published nearly 300 research reports.Prior to Gartner, she managed the HR systems practice at Grant Thornton, and before this helped to build an HR systems practice at Ernst & Young. Ms. Phelan started her career at Marathon Oil Company as a systems analyst. Ms. Phelan attended Indiana State University, where she studied Accounting and Computer Science.


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