We are now almost three months into the COVID-19 pandemic, with no clear end in sight. As talks of re-starting the economy take root, global executives will begin feeling the pressure to reduce costs to help keep their companies afloat.
According to PwC, managing the financial impacts of COVID-19 —including operations, future periods, liquidity, and capital resources— are the main concern for 75 percent of CFOs. Executives across the board are growing increasingly concerned about a global recession, reduced workforce productivity, reduced consumer confidence, and supply chain disruptions.
“There is little doubt that the US economy has downshifted into recession after a month of a partial shutdown,” explained PwC in their recent COVID-19 CFO Pulse Survey. “Economists are revising forecasts for second-quarter US GDP, with projections from the Conference Board for a contraction in the US economy in 2020 between 3.6% and 7.4%.”
Seventy-four percent of respondents in PwC’s study said they are prepared for a potentially “significant” impact on productivity. And 39 percent claimed that if COVID-19 were to end immediately, it would take one to three months for their company to get back to business as usual.
How are CFOs Responding to COVID-19? Sixty-seven percent of CFOs said they are considering canceling planned investments due to COVID-19. Executives anticipate having to make cuts to facilities and general capital expenditures (82 percent), their workforce (67 percent), and operations (55 percent).
What’s more, 53 percent of CFOs claimed that IT investments are in the crosshairs, while 25 percent are looking to reduce or eliminate digital transformation. And 15 percent are considering reducing customer experience spend. Just 2 percent are looking to reduce cybersecurity spend.
Much of this is alarming, especially when considering the overall impact that COVID-19 could have on the global workforce in the coming months. Altogether, roughly 20 million American workers could be laid off or furloughed by July. And in Europe, at least 60 million jobs are at risk —presenting an unprecedented employment crisis.
Tips for Reducing Technology Costs
The unfortunate reality is that many hard-working people will become laid off or furloughed in the coming months due to COVID-19. In some cases, this will be unavoidable.
CFOs need to understand, though, that it is possible to reduce technology expenses significantly, while maintaining — and even improving —operational stability. Doing so could free more capital to spend on workers, protecting jobs, and to prevent the need to part ways with top talent.
Here are some recommendations that companies should consider during this tough time, and how DTG can help:
Leverage Telecom Expense Management (TEM)
Businesses have a rat’s nest of bills ranging from network, phone, mobile, and everything in between. With complex, cryptic, and hard-to-understand bills, businesses often spend far too much money each month on unnecessary telecom expenses that can be reduced or, in some cases, eliminated. Our TEM experts can help a company get its digital infrastructure ‘house’ in order by assisting them in identifying waste and prioritizing what they need to be using — making it easier to slash costs.
Across the board, IT departments are overworked and exhausted right now — working nights and weekends to keep employees up and running on remote networks. COVID-19 has been a nightmare for IT workers. Yet, most companies can’t afford to hire more full-time IT workers due to the current economic climate.
One approach is to keep a small core of IT workers and augment the IT department with help from third-party managed service providers. Managed services can be used for everything from helpdesk support to network security to WAN management. Managed Services are a flexible, affordable, and scalable approach to IT support. Save valuable resource time and effectiveness by outsourcing your circuit monitoring. This service allows you to keep IT resources focused on their projects that move your business rather than making sure circuits perform.
Explore the IoT
It may seem hard to justify spending money on new connected technologies right now. However, certain IoT solutions can prove to make a big difference in reducing operational costs, especially when deployed on a large scale. IoT sensors that monitor refrigerator temperatures, water leaks from toilets, or flood sensors can offer substantial cost savings and short ROIs after installations.
IoT costs have also fallen in recent years, and connected technologies are now very accessible to businesses of all sizes and budgets. Making a small technology investment now could produce financial savings over time.
For enterprise customers that still insist on running on-premise PBX systems, it’s time to pull out that last bill. Session Initiation Protocol (SIP) trunk pricing has substantially decreased in recent years, providing another easy target for cost-savings.
Explore Mid-Term Renewal
Another way to save money is to lock in today’s rates and by committing to a longer-term with a telecom provider. This is called mid-term renewal, and it’s a strategy that companies tend to overlook because they aren’t aware that it’s possible.
We can help negotiate telecom rates, positioning customers for long term financial savings on essential services.
Re-think Maintenance Agreements
Telecom maintenance agreements typically arise once every few years. And while they’re necessary for system stability and performance, they’re also costly —and companies tend to pay far too much.
It’s possible to reduce maintenance costs by working with third-party providers that offer physical maintenance at a reduced price.
Deploy Automated Assistants
As we mentioned, CFOs are looking to reduce CX spend to save money. However, this can be risky. Customers still expect reliable service, even during challenging times. The demand for seamless service hasn’t gone away —and certain technologies can boost CX while allowing companies to re-allocate staff members to tackle more pressing needs.
Tasks like answering phones, for instance, can now be automated using virtual receptionists. Automated assistants don’t come with any salary or benefits and are available to provide 24/7 customer support.
It’s normal during times like these to be conservative. To protect spend and budgets and that is absolutely the right emotion; however, professionals that take this catalyst to find new and creative ways to accomplish critical tasks, saving money doing so, and enable their companies to take advantage of new technologies to make them more competitive will have powerful advantages over their competitors that attempt to survive the status quo.
Let’s Get Started
As you can see, there are countless ways for the average to reduce expenses across the enterprise—and we’re here to help.
By re-thinking where your technology dollars are going, you can improve your operations and potentially prevent having to lay off valuable workers. To learn more about our approach, contact DTG today.