Forrester report advises leaders on tackling economic shocks

Forrester's latest report has detailed practical steps for business and technology leaders to address the challenges posed by ongoing economic volatility.

The report, "How To Thrive Through Volatility," highlights the urgency for leaders to adapt to global economic disruptions stemming from issues including international tariffs, trade tensions, and supply chain challenges. Recognising the associated risk of pausing initiatives, Forrester advocates for strategic investments and resource optimisations to foster growth while navigating this uncertainty.

One key recommendation focuses on maximising the efficiency of technology investments without indiscriminately cutting costs. The report urges leaders to avoid halting modernisation efforts, instead encouraging them to streamline operations, eliminate software redundancies, and renegotiate terms to enhance savings and efficiency. Emphasising the importance of emerging technologies, the report suggests continuing to leverage artificial intelligence and other advancements.

In addition to technology optimisation, maintaining a strong customer focus and brand value is essential. Responding to variable market conditions requires adjusting brand propositions to better serve targeted customer segments.

Frederic Giron, VP and Senior Research Director at Forrester, commented on the impact of tariff negotiations, stating, "The ongoing tariff negotiations on imports from all APAC countries has introduced significant uncertainty into the market, with the full ramifications yet to unfold. In this volatile environment, it is imperative for business and tech leaders to engage in comprehensive scenario planning to anticipate various outcomes and develop adaptive strategies that ensure organisational resilience."

The report also suggests that strong leadership and change management are critical for addressing volatility. Forrester encourages leaders to engage in transparent communication, foster a learning culture, and build trust to guide their organisations through uncertain times.

Another vital focus of the report is the proactive management of risk, particularly in light of economic uncertainties. Forrester recommends a continuous, holistic approach to managing risks from enterprise, ecosystem, and external sources. Scenario planning for potential outcomes is advised to mitigate these risks effectively.

George Lawrie, VP and Principal Analyst at Forrester, remarked on the ongoing trade challenges, noting, "In the ever-evolving landscape of global trade, the recent imposition of new tariffs and sanctions is leaving many business leaders concerned about the future of their supply chain strategies. Navigating through the complexities of today's global trade environment presents a multifaceted challenge for businesses."

Forrester's analysis extends to specific industry impacts, such as the tariff effects on semiconductors, as discussed by Senior Analyst Alvin Nguyen. He highlighted the complications tariffs introduce to production and cost structures, stressing the need for geographic diversification to build resilience in supply chains.

Nguyen commented on the medium- to long-term expectations: "For semiconductors, we will see more foundries being built around the world as the push for geographic diversity and the supporting supply chains are deployed. This will be beneficial as there is less dependence on Taiwan for the majority of chip production."

Similarly, Lee Sustar, Principal Analyst at Forrester, discussed the likely impacts on cloud computing, stating that trade tensions could drive up prices in the public cloud sector due to increased material costs.

Mark Moccia, VP and Research Director at Forrester, focused on the consequent rise in IT costs, advising CIOs to develop varied scenario plans to manage these financial pressures effectively.

Lionel Nelson, another VP and Research Director at Forrester, highlighted the importance of simplifying leadership strategies and maintaining focus on long-term goals to manage the ongoing volatility and cuts in the technology sector.

Navigating through complex global trade dynamics, Forrester's report posits, requires foresight and adaptability from business and technology leaders to ensure sustained growth and resilience amidst market uncertainties.