Why Transformation Must Continue During an Economic Downturn: A CIO's Perspective on Long-Term Stability

Why the Continuation of Transformation during an Economic Downturn is Critical for Stability

TL;DR

Pausing transformation during an economic downturn is a costly error. Maintaining momentum builds resilience, reduces tech debt, and primes your business for growth when conditions improve. As a CIO, I explain why continuity is critical.

Introduction: The Illusion of Pause

It’s a tempting reaction—tighten the belt, halt change initiatives, freeze innovation. Yet in my 34+ years across manufacturing, retail, utilities, and private equity-backed ventures, one truth holds: the businesses that win are those that transform while others retreat. An economic downturn isn’t the time to pause transformation—it’s the time to double down.

The Strategic Role of Transformation in Downturns

1. Resilience Through Modernisation

Transformation is often equated with growth, but it’s equally a shield against risk. During the 2020s downturns, I advised clients across retail and engineering manufacturing who saw operational efficiency leap 40% from AI and automation initiatives introduced during turbulent periods. These weren’t “nice-to-have” projects—they were critical levers of stability.

2. Reduction of Technical Debt

In several global roles, including CIO for a multi-national engineering manufacturer, I led infrastructure consolidation to the cloud (Azure), eliminating over 150 legacy servers. This shaved £2 million in technical debt in under a year. Had we paused due to economic pressure, we’d have carried that inefficiency into recovery—hindering future performance.

3. Leveraging Downtime for Upskilling and Restructuring

Downturns offer rare windows for cultural and structural change. In retail and utility clients, we replaced fragmented systems with ERP platforms like NetSuite and Oracle Fusion. Staff capacity was redirected into upskilling and process optimisation, reducing supplier invoice debt by 29%. Waiting for “normalcy” would have only delayed maturity.

CIO Insight: Transformation is Risk Mitigation, Not a Risk Itself

Transformation isn’t optional—it’s a response to structural fragility. When consumer demand wavers, supply chains get tested, or capital tightens, a business's agility, data capability, and operational visibility define survival.

As I’ve often highlighted in advisory roles—from FTSE 250s to tech start-ups—those embracing business transformation, AI automation, and data-led decision-making aren’t spending, they’re investing in resilience.

The Cost of Standing Still

Pausing transformation may save in the short term, but the long-term costs include:

• Increased tech debt

• Slower recovery time

• Declining employee engagement

• Diminished market relevance

In contrast, forward-thinking organisations—those who advance change agendas even during constraint—emerge leaner, sharper, and competitively advantaged.

A Framework for CIOs Navigating Downturns

1. Audit inefficiencies: Use downtime to identify laggards in systems and processes.

2. Focus on core platforms: Accelerate ERP modernisation or CRM centralisation.

3. Champion automation: RPA can deliver 70,000+ hours in annual savings—I've seen it firsthand.

4. Align IT with business pain-points: Transformation must answer real problems, not create side initiatives.

5. Communicate ROI clearly: Boards need to see cost transformation, not cost escalation.

FAQs

Q: Should digital transformation be scaled back during a recession? A: No. Selective, strategic transformation is essential for surviving and thriving. Focus on ROI-heavy initiatives like AI automation, cloud migration, and ERP rationalisation.

Q: What’s the CIO’s role in economic downturns? A: To lead with vision. The CIO must ensure transformation aligns with business objectives while eliminating inefficiencies and modernising architecture.

Q: Can transformation actually save money? A: Absolutely. At Northumbrian Water, I led an RPA initiative that saved 75,000 hours annually—proof that well-executed transformation reduces both cost and friction.

Final Thought

Transformation during downturns isn’t reckless—it’s essential. As CIOs and business leaders, our job is to lead our organisations through uncertainty by modernising, not retreating. Waiting is a strategy—but often the wrong one.

Richard Keenlyside is the Global CIO for the LoneStar Group and a former IT Director for J Sainsbury’s PLC.

Call me on +44(0) 1642 040 268 or email richard@rjk.info.

Follow me on X https://x.com/cioinpractice & LinkedIn https://www.linkedin.com/in/richardkeenlyside/