Ready.Set.Midmarket! Podcast: Tariffs, Economic Turbulence: The Impact On Midmarket IT

In this episode of “Ready, Set, Midmarket,” host Adam Dennison and co-host Samara Lynn engage with CIOs Jay Ferro, Eric Tewey, and RC Woodson to discuss the current economic landscape and its impact on IT planning and spending. The conversation explores how organizations are adapting to economic uncertainties, the importance of strategic partnerships, and the role of technology and innovation in navigating challenges. The CIOs share insights on project management, cybersecurity concerns, and team dynamics during turbulent times, emphasizing the need for flexibility and proactive planning in their organizations.

The full episode can be watched on YouTube, heard on Spotify and Apple Podcasts.

Previous RSM! Episodes:

Ready.Set.Midmarket! Podcast: Security and Best Practices For Implementing Agentic AI

Tackling Tech Debt With Ken Knapton

Leading The Girl Scouts’ Technology

The Midmarket’s Tech Road Ahead In 2025

TRANSCRIPT:

Adam Dennison: Hello and welcome to another episode of Ready, Set, Midmarket, the podcast brought to you by MES Computing. Today I’m joined by my co-host Samara Lynn, Senior Editor with MES Computing. Welcome, Samara.

And then we have three CIOs joining us today that I’d love to introduce. We have Jay Ferro. He is the CIO and Chief Product Officer with Clario. Hey, Jay.

Jay Ferro: Hey buddy, good to see you, Adam. Great to see you, Samara. Thanks for having me.

Adam Dennison: Absolutely. We have Eric Tewey here. He’s vice president with Swisher. Eric, welcome.

Eric Tewey: Oh, thanks for having me. Welcome, everybody.

Adam Dennison: And we have RC Woodson. He’s a CIO at Bristol Bay Native Corporation out of Alaska. So RC, welcome here from the distant state of Alaska.

RC Woodson: Thank you very much for having me. Good to see everyone.

Adam Dennison: Awesome. So, this episode, I think it’s kind of timely. We’re going to talk a little bit about the economy, not just the US economy, the global economy, how that might be affecting some of your current plans, both now and in the short term and maybe long term, as far as your IT planning is concerned. But before we get into that, if each of you could just give us a real quick brief bio of who you are, what your role is. And then what does your company do?

Jay Ferro: Yeah, yeah, we’re in the life sciences space, so we do digital endpoint collection for clinical trials. Anytime you have a clinical trial, you’re trying to prove that the drug is safe and effective, and you do that with data. And we partner with large pharmaceutical organizations, CROs, biotech, etc. on solutions that help them collect that in the most accurate, the most, the highest quality way.

I have the privilege of being the chief information technology and product officer for Clario.

Adam Dennison: Eric, why don’t you tell us a little about Swisher?

Eric Tewey: Sure, I’m the Vice President of Swisher IT over there. Play the, my role is a CIO role, CTO role and the CISO role. Swisher is in the consumer packaged goods space, particularly in the adult product space, which is cigars. We’re the largest cigar manufacturer and reseller in the world. 160-year-old company. Just celebrated a hundred years in Jacksonville, Florida.

Adam Dennison: Perfect. And RC?

RC Woodson: I’m R.C. Woodson, Senior Vice President, Chief Information Officer, and also wear the security hat, the CISO hat here at Bristol Bay. We are one of native corporations here out of Alaska, about 17 different lines of business. So we serve as a holding company, but we operate businesses across the country, government services, construction, seafood, and a few others.

Adam Dennison: Perfect, thank you. So, I’ll start the line of questioning by painting a little backdrop. You know, Jay, you mentioned data. CIOs, IT leaders love data, love numbers. So I was looking out at some reports and IDC recently came out, obviously the major analyst firm. There it looks like they’re gonna be changing their spending outlook. Just a couple of weeks ago in March, they were projecting a global IT increase in spend of about 10 percent. Now, with everything that’s happening from a global economy standpoint, they’ve got a lot of concerns around the technology sector, they’ve got a lot of concerns around supply chain, we can get into that a little bit as well. And it looks like this month, they’re looking to decrease that to 5 percent as they’re increased.

Not unsubstantial, a 5 percent dip in two to four weeks, if you will. I don’t know if you’ve seen that data. I don’t know if you follow IDC, but I’ll just throw that out there in general. When you see an analyst report like that and that sizable of a shift in just a few weeks based on all the things that we’re seeing in the news, does that sound a little bit rash to you? Does that sound like it might possibly be the case? And if you can tie that back to maybe how you’re having some of those discussions and what you’re preparing for in your organizations to shed a little bit of light on it.

Jay Ferro: I think that feels directionally correct. I think the uncertainty, the choppiness in the unpredictability right now is, I think, forcing people, forcing organizations, maybe to be a little bit less optimistic as to how they thought ‘25 would go, and some of the operational realities are maybe setting in.

Eric Tewey: I’ll kind of chime in. And we look at it kind of in three sections. The short-term buys that we were going to make, we’re still trying to make those as quickly as we can. So strategically, we’re looking at just cost of goods as it relates to the changing tariffs, supply chain impacts, because a lot what we’ve seen is a lot of the bigger players, as soon as they were announced, right before the hiatus or the pause, they decided I’m gonna go spend my next two years budget right now. And so they bought up a lot of the pipeline of materials that we need, particularly around laptops, cell phones, some things that we’ve got. So we’re looking at our supply chain, where can we find other vendors and knowing that there’s a cost impact of that, but looking at it short term. Then we’re looking at it long term to see more strategic supply chain. How can we near-shore that or on-shore that more so?

But still keeping in with our strategic plan. I think that’s the key is that in this very fluid environment, it’s easier to make very short-term decisions. And then we’re looking at manufacturing costs and pricing. Because most of a large portion of our products are made out of the country. So, they’re imported in. We’ve always dealt with some taxation. Obviously, it’s a little changed now. We’re trying to make sure; do we hold shipments into the US? Do we accelerate shipments in the US looking at those? And then we’re also looking at the kind of the technology landscape. Is it does it make sense now to invest technically in the US, or should I invest in a country that we’re in that has a much lower economic footprint? I can put them down there, right? I mean, we’ve seen manufacturers on some of our machines, we’ve seen increases of the tariffs of a half million dollars per machine and that makes our product, which is very specific.

Jay Ferro: Yeah, I mean, we’re certainly seeing a lot of the same things. I mean, nothing like 2021, you know, in the prime of COVID or anything like that. But look, there’s still lead time risk. And I think we’re doing a good job of being proactive with our forecasting and leaning on our vendor relationships. Our customers depend on us to have our specialty hardware or, you know, the things that support the platforms that they count on, they expect us to be able to grow and provide what they need. I think cloud mitigates some of it a lot, which is nice. But yeah, your edge devices, your custom devices, your specialty hardware, your components, if you assemble medical devices like we do in certain markets, still requires significant planning with a little bit of strategic stockpiling.

Eric Tewey: Yeah, we’re also we’re also trying to look at the longer tail. So as Jay mentioned, the cloud providers kind of offset some pain right now, but they’re going to feel that later when they go to invest and they go to buy their equipment. It’s going to more expensive, which means my services are going to go up, which is more kind of an indirect cost that will hit us.

Adam Dennison: Yep, these are not minor discussions to be to be having and my guess is that they came on rather rapidly.

Do you have a couple of different plans? I think I heard someone, you know, you’ve got, do you have ABC plans right now until things sort of settle in? that, and it’s a tough way to do business, right?

Jay Ferro: My CFO and I talk pretty much every day in some way, shape or form. He’s a terrific partner and he and I are focused on the same thing, resilience and ROI. This is not about cutting across the board. This is about ruthless and surgical prioritization., agreeing on what’s mission critical, what’s delivering value, near term, how do we continue to place longer term strategic bets, and how do we align our spend to outcomes. I think if you do that and you have a framework, regardless of where the funding is and supply chain issues are, you empower yourself to make better decisions.

Eric Tewey: With us, my CFO sits right next to me. So his office is right next to mine. We have an open discussion of consciousness. Just going back and forth.

He’s in my office half the time, I’m in his office half the time, we’re having a hallway conversation outside one of our doors. So we’re very, very lockstep in what’s going on. But as this started to happen, you know, last couple of weeks, we kind of started breaking up into some business impacting meetings, some process meetings, and then some technology meetings. So the business meeting was, what are we going to do about price? Because we’re a consumer product, it’s going right to the consumer. Do we pass that along? Do you absorb some of it? Do you split it? How it makes the most sense as it relates to our financials and investments that we need to make. And then it’s more looking at what’s the process. How are we going to make sure this happens? How we communicate to our customers? How do we take a price increase in 10 days or not take a price increase in 10 days? And how do you communicate that out? And then the last conversation is about the technology. How are we going to implement those new fees, whatever they are and wherever they’re implemented?

Adam Dennison: Yeah, I have another question. Since the uncertainty started kind of kicking in economic from an economic standpoint, have you either? put any specific IT projects on hold and said, let’s wait and see how this is going to play out or on the flip side of that. Is there one that you said let’s lean into this big-time right now? Either get it done.

Maybe you got to make some purchases from overseas. Let’s get these things in and done. is it something that, maybe it’s an AI type scenario that can help you out through something like this. And you said, let’s lean into this right now. Let’s bring this up to the top.

RC Woodson: I’m in a unique position because I have two hats. I have an operational role, but I also have a business development slash business continuation role from a strategic perspective here at the company. I want to go back to the meetings just for a second. I work for a CFO as well. And we do what we call strategic alignment meeting. We talk about the business goals. We talk about current economic goal, trends, we talk about what the IT roadmap looks like, but most importantly, we talk about how the money is going to work. We operate under a flexible spend. What’s going on? What do we need to readjust? And that feels comfortable to me as a CIO [and] doesn’t tie my hands. So leaning into your question, yes, there are a few things that we put on hold because we rely on supply chain. There are also some things we put on hold because we rely on talent from other places. I kind of shared with the group before we came on the call, we do government services. We do a lot of things that impact DOD and things like that.

Long story short, yes, we have to be specific, we have a lot going on in AI on many different levels, from operational to strategic all the way. We’re almost a household name in AI already. But that being said, current economic trends say you know, slow down, take a look at the vendors are the vendors that you’re working with going to be here three years from now. Uh, and that’s what’s keeping me awake at night. Most of our companies are mid-market companies. So, some of the vendors that we work with are kind of young, you know, that they’re not as mature as some of the companies that have been out, you’ve been around 15, 20 years.

So things that we used to look at back when we used to do this old SAS 70 reviews and things like that to make sure that you were going to be around, you know, that type of work is important as we make new partnerships. So the economy specifically is causing me to look not only at my projects, what I have going on. I published an 18-month roadmap. That thing has changed six times in the last six months.

Because it has to be correct because I’m dealing with people, time and money. But to add, no, this is a long answer to your question, but that’s what’s kind of on my mind as I drive back and forth to this building. So yes, it has impacted projects. It has impacted my strategy. And it’s also caused leadership to take a look at not only how we’ve been doing IT, but how we want to do technology in the future.

Eric Tewey: Yeah, we’re leaning in. We are leaning in on every aspect because most of the enhancements of our ERP, which we’re finishing rolling out to 70 of the more companies that we have the CRM, our new data platform, all of the analytics and AI around that is only going to make us better when we when we think it gets tougher.

So those are all-year to two-year projects that are in role and we’re leaning in the terrace of not their economic environment has not changed that at all. Strategically, we haven’t changed our strategy, but we now have different inputs or different factors that we need to think about, supply chain, location, pricing, and revenue and things like those lines. that’s the big impact. And those, we have those meetings, the strategic meetings two, three times, four times a year at Swisher. And then what R.C. said, we’re a little bit ahead of the eight ball there. We have a business case which we call ITAG, which stands for Information Technology Alignment Group. It’s a group of business leaders and a couple of me and my technology leaders. And every single project that we do goes through a business case. We’ve got a template to go through pretty quick. You’re capturing ROI, know, net present value. It does all that work. And so to be able to factor in additional costs with these economic environment creates, it’s pretty easy. Just go ahead and plug it in and it’ll tell you, maybe we prioritize it, but it is prioritized all in ROI. So our point and focus like RC’s is definitely on that.

Jay Ferro: Yeah, I mean, I feel the same. know, strategy is our strategy. I think like anything like a sports game, you get too behind or you have a key injury or whatever economic uncertainty. You have to pivot maybe the game plan, but you still your desires to still score points and win the game. And so I, you know, for us, sure, there’s been a little bit of a delay, maybe with some lower priority initiatives.

Maybe you’re taking a fresh look at those with longer payback periods. But like the core stuff and Eric, you touched on it and so did you RC. But the core modernization product enhancements, AI, certainly security and compliance programs are moving forward full speed ahead. And so, we are always looking at our capital allocation or our cost allocation.

And trying to make the best decisions in real time as we can. And that sometimes means making the tough choices to either pause or slow burn, you know, an initiative with a longer tail and take on new work. know, going back to your example, Eric of ITAG, and which I think is great, I may have to steal that, but it’s, you’re gonna get new business opportunities. Could be an acquisition, could be a new technology, could be a customer request, you’re not going to go back and go, well, that wasn’t in my ‘25 plan. We’ll take a fresh look at it in ‘26, Mr. Customer. You’re going to pivot, right? And you’re going to find a way to either expand to absorb it or reprioritize what you have if you can’t add any more capacity. Those are your two choices. Or to say no, which is usually not a great choice when it comes to a terrific money-making opportunity or a customer request.

Samara Lynn: Can I jump in with a question for the gentlemen? So, you know, our sister publication is CRN and they focus on the channel. And I know a lot of you probably deal with solution providers in the channel. How much have solution providers or MSPs been helping you navigate this economic turbulence? Or have you been pretty much feeling like you’re going at it alone?

Jay Ferro: I’ll jump in real quick and just say that we have terrific relationships with our partners. We’re leaning on them pretty hard. certainly you can talk about just price or whatever, but just partnership and support. So we have terrific relationships with our suppliers. We do not feel like we’re going at it alone. And I think this is where the rubber hits the road with your supply partners, with your MSPs and VARs, et cetera.

When times get tough and you know they’re feeling it too, do they disappear or are they leaning in, to use Eric’s term, reinforcing the partnership? And I’m happy to say that.

I can’t think of really an exception our partners have leaned in.

Eric Tewey: You know, we’re kind of the same way with the Jay mentioned. Our partners are coming calling me. Hey, you need help? What can we do? Let’s show you this. Here’s what other groups are doing. Our vendors aren’t and we bifurcate that, we have partners and we have vendors and vendors are folks that just supply you stuff. They don’t necessarily have the depth of the thought leadership to be able to bring extra value to you. But partners, you know, they’re folks that they know my strategy. They know my road map.

They’re in it with me and when I need when I need them, they’re usually there. And so I’m having the same experience that Jay has is that the partners are stepping up. Vendors are just ... the vendors wait for me to call. We try to we try to eliminate vendors.

Adam Dennison: Just to clarify, when you say partners, that could be a vendor that you consider a partner?

Eric Tewey: Yeah, it’s a channel partner. It’s just we have a different relationship with us. It’s more partner than a vendor.

Jay Ferro: 100 percent. Yeah, I think Eric nailed it . And there are vendors who are just transactional. And sometimes that’s fine because they’re not providing a strategic asset. And it’s fine where you really don’t care. I want to hear from them once a quarter or once a year. And as long as you don’t jack up my price, I’m not going to get much from you anyway. But the ones who should be adding value and they’re not, I’m with you 100 percent, Eric. I like to kick them to the curb pretty quickly and I like to work with partners.

RC Woodson: And I think that’s a pretty good discriminator. Okay. Where do they fit in your organization and your role from a strategic perspective? Okay. you know, I call them strategic partners. Even when we’re at any MES events, when I take a look at, know, a possible vendor that I want to do business with, where do they fit in the business? Okay. How well do I get along with them at the end of the day? You know, when the rubber meets the road is if I call you at 2:30 in the morning, Alaska time, you know,

Do I have to wait till six o’clock in the morning on Saturday? And that’s a big deal with us. rolling back to risk and cybersecurity projects, things like that, this economic situation has helped me to push a lot of my risk-related projects upfront to the point where I’ve gotten additional funds even after being asked to reduce my budget for next FY by 4 percent, that was the number that I was tasked with by our CFO, I was still able to get some new vendors on board. So, you know, maybe I’m balancing it, right? I don’t know. Maybe I’m lucky. But at the end of the day, I’m able to shift some funds around to make sure that we’re doing what we need to do.

Adam Dennison: The cool stuff into the risk initiative.

Eric Tewey: 4 percent of RC’s budget is just his food bill.

RC Woodson: So, yeah.

Adam Dennison: Yeah.

RC Woodson: Eric and I go back over 10 years guys. So, but here’s the thing, know, Eric and I match with a lot when it comes to this IT thing. We don’t see each other but a couple of times a year, but I have a similar group in my organization called the BTAT, the Business and Technology Action Team. And we do the same thing. And that has been a godsend. All right, because, you know, as all of this turmoil goes on around us, we’re in the room and I’m in the room with the movers and shakers in my organization that are making the decisions. So there’s nothing happening in the dark. If we need to step back and slow down on spending, we all do it together. They don’t come to IT and say, you know what, let’s go to IT. Let them take something off of our seats desk. They don’t do that to me. So I’m very fortunate when it comes to that from an operational perspective.

Eric Tewey: You know, our philosophy is desperate measures create desperate people. So we truly believe we’re going to see a whole different realm of cyberattacks that are begetting from this environment. Those people that were going into groups that maybe making bad decisions to open their doors are now going to be much more vulnerable. So we’re really cognizant of that knowing that hey, don’t look for the same thing. Start looking for something different because we believe that this economic environment will also change the bad guys.

Jay Ferro: Anything that distracts people from keeping their eyes on the glass and getting on that wall and protecting the organization. They take advantage of chaos. They take advantage of distraction. So whether it’s a political turmoil, economic turmoil, world crisis, certainly a pandemic that we saw a huge uptick in cyber warfare and cyberattacks, but can be something as innocuous as an acquisition or just a press release.

While you’re busy doing a victory lap or talking about something and you look away for a second and next thing you know you’re clicking on a malware link and because it happens to be right on point with the press release that you that you just released. So yeah we don’t take our foot off the gas when it comes to vigilance.

Adam Dennison: So we just spoke a little bit about people and the human element and that’s a big part of what you do, right? You’re all IT leaders, you’ve got teams. When things are uncertain, when things are chaotic, that takes a toll on the human individual as well. can you kind of, we don’t have a lot of time left, but kind of talk a little bit about that in terms of how you’re managing with your teams,

Eric Tewey: We’ve got a great HR team, and we provide us a lot of financial resources, availability to everybody in the company. And I don’t know that the impact of the tariffs have hit everybody yet personally. Now folks that are that have gray hair, Adam, like you and I, obviously we’re thinking about it, trying to figure things out there, but I don’t sense in Swisher there’s a sense of panic at all.

And then for the how’s the business going? Swisher is in a growth period. mean, we are, you know, been growing and growing and growing. We’re going to continue to grow for the next five years. So the idea of, you know, my job in danger is a company going to, you know, go under that fear. We don’t have it. We’re very fortunate with the leadership that we have and the markets that we’re in that we don’t have that concern. So for us, I think it goes on another couple of weeks and starts to filter down and trickle down to the consumer who’s going to really start seeing the impact. I think then people really start to talk more about it. Right now, a lot of the talk and concern is how’s it affecting our business?

Adam Dennison: Yep, got it.

RC Woodson: Yeah

Jay Ferro: I think the same. Go ahead.

RC Woodson: Yeah, in our organization, we what we call it right-sized, we right-sized last year. We’re not having any issues with our employees and IT. Actually, we’re growing a few of our areas in IT, a few departments. But that being said, we provide a career path. You know, we bring them in early and then we keep them as long as we can. And we give them positions along the way. So right now we’re stable.

And I think we’ll be looking good through this entire period.

Jay Ferro: Yeah, you know, I want to steal the word you used, RC, stable. Think our employees are cautious, but stable. I think anybody thinks their team is the best. I know I’m selfishly going to claim that the folks at Clario are. They’re very passionate about what they do. We love what we do in the space that we’re in. But you can’t help but read the headlines all around the world, and we’re a big global company, and say, gosh, what does this mean for our company? What does this mean for me? You wouldn’t be human if you weren’t impacted by that on some level, depending on your situation. So we try to be understanding. think transparency as much as possible from leadership helps in accountability.

Adam Dennison: Yeah, Samara. You have any final questions you want to ask?

Samara Lynn: I mean, there’s a ... people thought they only had AI to worry about. Politics said, ‘hold my beer.’

Eric Tewey: This is about the only time in the last two or three years that AI hasn’t been the focus.

Adam Dennison: Yeah, I know.

Jay Ferro: AI is one of our strategic growth pillars. In our particular space, I consider us a front runner in leveraging AI for what we do, but it’s augmentative to our science and our specialty. It’s not meant to replace. We’re in a highly regulated space. We follow the science. We follow the regulations.

Our customers want to be able to trust us. They want to know that we’re doing things responsibly. And so for us, AI is a huge part of what we’re doing every single day, but it augments our folks. It doesn’t replace them.

Adam Dennison: Well, I want to say thank you to Eric, RC and Jay for joining Samara and I on another episode of Ready, Set, Midmarket. Hopefully next time we speak, which Eric and RC, it’ll be in about nine days. Hopefully things have settled down some more from there and we’ll have more clarity. If not, maybe we’ll have a part two of this sometime in the late summer and see how things are progressing there.

But thank you again so much for taking time out of your day and we’ll see you at MES soon.