What to cut and not cut from digital budgets in a downturn
Budget cuts are a reality in an economic downturn, but indiscriminate cuts in the wrong areas could kill the Goose that Lays the Golden Eggs. One of the greatest risks for agribusinesses is cutting back on a strategic source of efficiencies and future profits, but there are ways to minimize the impact.
We understand that cutbacks may be unavoidable, but judicious budget cutting to digital projects can make a world of difference when the economy recovers. So how can you prioritize digital transformation in a period of budget restraints? Look for potential areas to cut digital fat, not muscle.
I. Reevaluate your pipeline and be mindful of dead weight
Customer buying behavior can be hard to predict during a recession. Economic realities can put loyalty at risk and change customer needs. It may be a good idea to reassess your roadmap to see if digital investments are still aligned with shifting needs.
Are there digital releases that are no longer relevant or planned features no longer useful? Every feature costs money and time to maintain, but as you pivot to your customers’ needs, those components may not be providing value any more.
“It is important to reevaluate throughout the design process to ensure you are not overspending on time or resources, stresses Skyward Apps CEO Kat Crawford. “Ask yourself, ‘am I including this piece because I have an intention for it and still delivers value?’”
2. Improvise, adapt and overcome
When faced with budget constraints, the first thing to do is a systematic analysis of costs associated with each requirement and any related dependencies.
For large companies automating business processes, integrating data silos, or building out digital ecosystems, cutbacks to projects in the pipeline can have a cascading impact on existing applications.
“You want someone who understands the reality of the technical system in which it will be deployed,” advises Nick Elliott, Skyward CTO. “We were brought in to create a portal based on requirements that left out the need to connect to existing systems that were secure and cordoned off. It required three additional months to essentially reengineer the solution.”
Look for alternatives that can conserve cash without sacrificing functionality. This might be reevaluating the product design, finding redundant features, or changing the development process to defer functions that will have minimal impact on customers. Consider microservices for specific uses that can be rapidly deployed to drive value fast.
“It is really important for decision makers to work with their digital product owners to grasp the technical implications, cost benefits and impact on projections,” said Crawford. “Make sure for the money you do spend, you have a clear understanding of its strategic importance, dependencies, and when it will bring money in the door.
In business school, they call this Value Engineering, In the Marines, they call this “improvise, adapt, and overcome.”
3. Complete the Project in Which You’ve Invested
Software and digital transformation can drive the very cost savings you’re seeking, so it’s important to stay the course on strategic projects in which you are already invested. When you are looking at unfinished development, it may be tempting to just cut the project all together, but is it worth flushing down the time and resources that you’ve already spent?
“I worked with a company that had developed a feature that was 95% complete, spending over $200,000 when the team faced budget cuts,” said Nick Elliott, Skyward App Company CTO. “Unfortunately, they cut the 5% of development funding needed to finish it. If they would have put a little time into identifying areas that could reduce the scope, they could have completed the project and gotten closer to a full return on their investment.”
4. UX first > UI second
A common mistake companies often make, regardless of budget restraints, is to get hung up early in the design process on UI – what it will look like when the application is complete. This detracts and distracts from time and resources that ensure the technology and are actually going to work when it’s in the users’ hands. When deadlines are pushed and budgets get short, you may have a product that looks good but doesn’t actually accomplish the business need or deliver value.
“There have been times when a design team hands us designs for great-looking features that need to be built, but they didn’t think through the consequences and flow of the feature. Unfortunately, that meant going back and reworking it once if not twice, costing weeks if not months of time before it was ready to begin implementation, shared Elliott.
A delay in implementation due to inefficient UX, especially in agriculture, can often mean missing the season and putting your digital transformation efforts back a year, costing your bottom line even more.
5. Relentlessly triage to prioritize ROI
Digital development can be interrupted by urgent issues that can’t wait. It may be user problems or requests, or the inevitable bug not caught during testing that could affect any number of things.
The time to triage is before the disruption occurs so you have a process in place to determine what qualifies as critical, needs development immediately, whether the necessary information is there to act on, or whether it falls short of the current digital priorities.
“Development shops that follow Agile methodologies have a process in place to address user problems or requests in ways that minimize the impact on existing projects. There are ticketing systems that track backlogs, changes, and ultimately the efficient investment of resources.”
Expertise that saves money
At Skyward, we help agribusiness customers find efficiencies in digital transformation, without cutting out the goose that lays the golden eggs. Our experience in digital agriculture reduces the unknowns, increases your digital capability, and accelerates speed to market. Ask us to show you some examples.