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As we deal with the aftermath of Covid-19, the economic turbulence and political turmoil of 2022, company leaders are asking themselves the same question:
Are we on the verge of a long-lasting economic recession?
And if so…
How deep of an impact will this recession have?
As economic conditions change, the feeling of uncertainty and business disruption grows.
Most organizations suffer during a recession because of both a decline in demand and an increase in uncertainty. For this reason, enterprises should devise a contingency plan to pull through this economic decline, no matter the size.
Declining productivity, higher labor costs and delayed business expansion mean that companies are struggling to compete.
So, how can an organization prepare for a recession?
According to Harvard Business Review, research shows that there are ways to mitigate the damage. The most interesting findings were found in four areas: debt, decision-making, workforce management, and digital transformation.
A key indicator of success during a recession is whether an organization continued to invest in technology.
It’s tempting to think that during an economic downturn one should batten down the hatches and play it safe. However, when an organization strategically invests in the right technology, they’re more likely to come out on top once the market bounces back.
According to Gartner, technology can make your organization more efficient, flexible and transparent.
In their recent report on technological trends in 2023, they put particular emphasis on the threat of recession and the need for companies to have a digital immune system: combining software engineering strategies to create an enhanced customer experience and protect against risk.
Read more: 3 Automation Trends to Watch Out for in 2023
Enterprises want to remain competitive. When they have constraints on hiring resources, they need to do more when it comes to adopting software.
Katy George, a senior partner at McKinsey, says that organizations should prioritize digital transformation projects, such as automation, because they pay off quickly. Automation helps organizations increase productivity and mitigate risk which in turn helps reduce costs.
To stay competitive, organizations need to release software faster and that software needs to be tested. However, so much testing is being done manually and this presents a serious problem. It is now the case that test automation has become a fundamental requirement.
In the short term, investing in automation can help your organization operate more efficiently and with less overheads, while making better use of your existing resources. In the long term, your organization will be ready to make capital out of future economic growth.
Times of economic turmoil give us the opportunity to turn our attention toward our organization’s internal processes. Instead of cutting staff or services, you can look at the challenges your organization has been facing and identify the ways automation could help you improve inefficiencies. Regardless of whether you use automation for RPA or test automation, it will simplify and reduce costs throughout your operations.
A key factor, however, is adoption time. The quicker your employees can implement and adopt automation in their day-to-day work activities, the quicker you will see its economic value.
A way to ensure a short learning curve and quick adoption time is to invest in a no-code automation tool. No-code automation tools allow anyone to automate without previous programming knowledge which in turn improves return on investment (ROI).
Investing in automation can keep your employees productive and creative by allowing them to spend more time on tasks that really have a financial impact on your organization.
If you were to automate processes within a sales department for example, it would help reps spend more time engaged in activities that drive revenue (such as sales interactions) instead of drowning them in admin tasks.
Not only that, investing in your team during an economic downturn can be a strategic way to retain your best employees and limit staff turnover. This will become extremely important once things pick up again.
If there was ever a time when core business processes need to operate at their optimal level, it is during a financial downturn. Automation increases speed, reduces human error, and ensures that all business processes operate as expected.
Some may use automation for data migration, product quality assurance during the software development process, or monitoring critical systems in health or BFSI.
Regardless of which use you have for automation, one thing is certain: mitigating risk during a recession is paramount and the sooner you have a solid automation portfolio in place the better.
Leapwork’s 2022 Risk Radar Report found that among the main challenges in QA were a lack of skilled developers, underinvestment in test automation, and a lack of professional development. It is vital that all of these factors are addressed to reduce risk and gain competitive advantage in the face of recession.
Using technology to handle time-consuming and error-prone tasks reduces operating costs. Automation not only makes things easier for employees but it also helps reduce OPEX in the process. It allows organizations to free up human resources in order to tackle the more challenging work that is needed during challenging times.
Lastly, automation offers a quick ROI that outweighs the initial set up cost, especially when we talk about no-code automation.
“The ROI is absolutely there. Leapwork has provided us a service that makes it easier for us to reach our main objective, which is to deliver 5 times the ROI within one year,”
Many organizations are hesitant to adapt and implement new technologies, especially when they see an economic downturn ahead. However, automation makes organizations more agile and this in turn allows them to endure uncertainty and the evolving impact of a recession.
No matter what the motivation for investing in automation software is, a business will always experience reduced costs and mitigated risk, as well as increased productivity. These benefits will occur simultaneously, as they each reinforce one other.
When businesses fail to see that digital transformation is a vital component of building business resilience, they put themselves at risk during harsh times. However, those that choose to automate can not only survive but find themselves at the top when the storm clears.
If you want to learn more about how test automation can help your business, consider downloading our guide below.