American companies are worried about recession, but not so worried they’ve stopped their digital investments.
Investment in technology has remained durable in the face of economic downturn, a trend that seems like it will persist this year, The New York Times reported Monday (Feb. 13).
The story illustrates the trend via the example of Wisconsin smart building company Johnson Controls, which last year added 500 employees to a team of 2,500 software engineers and plans to hire 350 additional tech workers.
“We have to continue to invest,” said Vijay Sankaran, the firm’s chief technology officer. “You can’t do what we’re trying to do without technology.”
While Big Tech firms like Alphabet, Amazon and Meta have laid off workers recently, the Times notes the same isn’t true of the larger tech economy, as most technology workers don’t work at tech companies.
The report points to a recent poll by research firm IDC which found that while 82% of corporate technology managers expected a recession this year, 62% said that tech spending at their companies would be at the same level as last year, if not higher.
That’s in keeping with recent research by PYMNTS that shows companies increasing their spending on tech innovations such as new accounts payable (AP) systems.
Eighty-one percent of companies say they are investing or planning to invest in AP to improve their business processes.
And while modernization is becoming increasingly important across all types of payment investments for retailers and manufacturers alike, the data shows that manufactures overwhelmingly cite one reason for investing in AP innovations.
PYMNTS research found that 77% of manufacturing CFOs are investing to improve payment processes. By way of comparison, the next most popular reason for this investment is to modernize operations, and just 19% said that motivation was most important.
“This drive to continually improve payment processes has led manufacturers to continue investing in improving their current systems, including key financial innovations such as modernizing and reducing costs for AR and procurement,” PYMNTS wrote last month.
This includes 40% of manufacturers who had not already done so, but are focused on investing in enterprise resource planning (ERP) for their AP systems, leveraging an automated “all-in-one” process that is expected to further streamline AP systems.
And with a majority of transportation, shipping and logistics companies telling PYMNTS they expect their business-to-business (B2B) volumes to keep growing, 41% of transportation companies think of accounts receivable (AR) and accounts payable (AP) innovations as their most pressing investment priorities.
As B2B bill-pay volumes rise, manually writing and mailing physical checks will become an increasingly less viable solution.