Slower overall spending mixed with turbulent and lumpy employment trends will make it difficult to navigate 2023 planning and budgeting. According to Forrester’s report titled 2023 Planning Guides , business leaders who plan for “business as usual" modest spending increases in the year ahead will fall short.
Most leaders in every function expect at least some increase in overall spending in the next 12 months; less than 10% expect a decrease, with the exception of B2B sales.
Marketers and product management leaders are the most bullish; B2B sales and tech/IT leaders are much more cautious, said the report.
Due to an unpredictable economy, leaders will need to tackle planning with discipline and precision in order to trim waste, experiment, and make bold, smart investments. The reports highlights that business must start investing more in customer insights and engagement. With 2023 unlikely to look like any past recession, many assumptions about customers and their behaviour will be rendered useless.
Leaders should also invest in new customer data and analytics tools, such as experience research platforms (XPRs), to sharpen audience targeting strategies. Current economic headwinds will require focusing on technology tuned for optimisation and resilience. Leaders should invest in tools that drive loyalty and reduce operational costs, such as robotic process automation (RPA) and agent-assist apps.
Where should you decrease investment in 2023?
According to Forrester, while many thought the cloud would be the antidote to technical debt, but yesterday’s lifted-and-shifted workloads are now debt themselves given how inefficient to operate and difficult to upgrade they are. In 2023, leaders should consider early cloud deployments as candidates for technical debt reductions.
Partners will also continue to play an important role in growth, but two key areas are ripe for cuts. As the quality of third-party data continues to drop, leaders should streamline these partnerships to only those that add value to customer relationships. Second, firms that relied too heavily on partners for digital innovation during the pandemic-induced digital sprint should bring more innovation in house.
Where should you experiment?
Extended reality, the metaverse, and Web3 that offer immersive experiences are areas that should be on your radar, said the report. These aspects are interlinked, and arguably are overhyped. But the technologies hold the promise of immersive experiences linked to token-based ecosystems that use cryptocurrencies and public blockchains. Leaders in consumer industries should experiment with metaverse precursor platforms such as Roblox and Decentral to open doors to new audiences.
Meanwhile, an intelligent agent (IA) is also recommended to experiment with as it can make decisions or perform a service based on its environment, user input, and experiences. Leaders should plan to experiment with IAs on an ongoing basis to utilise their full potential.
“Leaders are faced with navigating a tumultuous business landscape defined by global unrest, supply chain instability and soaring inflation, as well as the ongoing aftermath of the pandemic,” said Sharyn Leaver, chief research officer at Forrester.
“Tackling 2023 budget planning is a daunting task, but Forrester’s Planning Guides will help leaders make more strategic and disciplined decisions to drive business growth at a time of such uncertainty.”