For the avid In IT Together blog readers out there, you’ll remember that our October edition zeroed in on the importance of market research during times of economic uncertainty. Whilst this month’s blog also has the backdrop of a recession, we wanted to delve into one of the hottest topics running throughout our research this year, sustainability. And to understand – when it comes to sustainability – whether the best laid plans of enterprise organisations could survive the prospect of a lengthy recession?
To do this, we asked 300 IT decision makers (ITDMs) from the US and UK how important sustainability is when purchasing an IT solution, where sustainability sits among other investment areas during times of recession, and ultimately whether they believe their organisation will pursue sustainability goals in the face of a recession.
Resilience in the face of recession
In the face of current world events and economic pressures, we’re mindful that these are going to be trying times, and they mean that individuals and organisations alike will need to be frugal when it comes to their spending plans over the coming months and probably years ahead.
However, despite these difficult circumstances, 50% of surveyed ITDMs are very confident that their organisation can successfully navigate its way through a global recession – with a further 44% reporting that they’re quite confident in this ability. Does this signal over confidence? Or is it just that they know their organisation’s leadership team will do what it takes to ensure that the show goes on?
Once again viewing this through the lens of our October blog, it seems most likely to be the latter. For example, 58% said that their organisation had already needed to refocus their strategies as a result of the global recession. Not only that, but 34% had been redistributing their marketing budget, 32% were investing less in new products, while 30% had already had to take the unfortunate decision of making redundancies – with this theme of redundancies being a regrettably common one in recent months, particularly among big tech companies.
What this does show though, is that senior decision makers in enterprise organisations are not afraid of making the tough decisions if it allows them to keep their company afloat during difficult periods, but what does this mean for sustainability objectives?
Will short-term sustainability costs cloud the long-term benefits?
First and foremost, it’s clear to us from the countless research initiatives that we’ve worked on in the last 12 months that environmental/sustainability objectives have rocketed up the priority list for many businesses around the globe. The importance of these initiatives cannot be underestimated, from the obvious cumulative impact they can have for the future of our planet, through to their potential influence on an organisation’s brand image. Take one of the findings from our June blog, for example, where 93% of respondents agreed that being a socially responsible and sustainable organisation can bolster a company’s image and build its brand.
However, sustainability isn’t always the most cost-effective pursuit – a fact that is highlighted by the 83% of surveyed ITDMs who admit that integrating sustainable practices and technologies increases costs/expenditure for their organisation’s IT department. And with budgets coming under pressure could these initiatives be undermined?
Based on our research, the answer appears to be no with sustainability targets currently well up towards the top of the priority list for IT teams. This is highlighted further when looking at the key factors influencing the decision making process when organisations are purchasing a new IT solution – more than half (54%) of respondents report that being able to run a new IT solution in a sustainable/environmentally friendly way is more important in the purchasing decision than the vendor having a consultative/collaborative approach.
And according to 53% this sustainable element is more important than the availability of support services or demonstrable ROI. In addition, 90% of respondents agree that the presence of a sustainability strategy in an IT solutions vendor organisation can influence whether they choose to partner with/purchase from them.
We’re not saying that all other factors go out of the window when decision makers are purchasing new IT tools, but vendors must be aware of the demand for environmentally friendly/sustainable solutions if they hope to navigate these choppy waters.
So, is sustainability recession proof?
Recession or no recession, it would appear as though organisations – or at the very least IT departments – still have a strong focus on continuing along sustainable paths. But how does sustainability stack up when compared to other core investment areas?
Well, more than a quarter (26%) of surveyed ITDMs cite sustainability/environmental initiatives among the top three most important areas to increase/maintain investment within during a recession. And while this leaves it lagging well behind areas such as IT/IT security (69%) and innovation (44%), it does compare favourably with HR, training, and learning and development (24%), marketing (22%), and recruitment (13%).
It’s probably not a surprise that organisations maintain core business areas that contribute to their day-to-day success in favour of sustainability goals. However, from what we see here it is fair to expect that sustainability won’t completely fall off their radar, even in the face of difficult times to come, with 79% of surveyed ITDMs agreeing that a global recession must not lead to sustainability/environmental initiatives taking a back seat.
Regardless of what ITDMs think SHOULD happen, there is a very positive outlook when it comes to what they think WILL actually happen, with 91% believing that their organisation will continue to pursue their sustainability goals even if they begin to feel the impacts of a global recession.
It does seem clear that ITDMs are confident that their organisation’s senior leadership will not shirk the responsibility of trying to move the business along a more sustainable path. Furthermore, it’s also clear that there’s a commercial imperative here for IT vendors, as they now have even greater clarity that they must be doing what they can to ensure that their solutions are able to be operated in a sustainable/environmentally friendly way. Ultimately, it could be what sets them apart from their competitors when it comes to IT buyers making their next purchasing decision.
So, to answer the central question – yes, it does looks like sustainability initiatives can survive a recession, which is some positive news to end on.
Methodology
300 IT decision makers from across the US and UK were interviewed in October 2022. All respondents were from organisations in the private sector, with 1,000 or more employees.