Relentless chaos will force enterprises into permanent contingency mode

The era of stable assumptions is over. From unpredictable tariff swings to erratic fiscal signaling, the US government’s economic stewardship is veering into incoherence—and global enterprises are caught in the crossfire. Flip-flopping trade policies, fragmented regulatory responses, and mixed signals on industrial strategy are upending how enterprises plan, prioritize, and protect value.

For enterprise leaders, the real risk isn’t any single policy; it’s the absence of consistency. What’s required now is not incremental adjustment but a complete recalibration of enterprise technology and operating models around a new normal: chronic instability (see Exhibit 1).

Exhibit 1: Designing for chronic instability requires rethinking current approaches

Source: HFS Research, 2025

It’s time to redesign cybersecurity strategy for the age of policy volatility

With regulatory positions changing faster than chief information security officers (CISOs) can update their playbooks, cybersecurity can no longer be treated as a compliance checkbox. It must evolve beyond compliance and into continuous readiness. Today, it’s all about maintaining operational resilience against technical and policy-driven disruptions.

Enterprise leaders should:

• Deploy AI-native threat detection that adapts to shifting digital risk surfaces.
• Build zero-trust into the fabric of distributed ecosystems—not just edge endpoints.
• Automate compliance monitoring to keep pace with unpredictable cross-border shifts.

Why it matters: The next vulnerability may not be in your code but may be in your policy exposure.

Generative AI is an uncertainty hedge—not a nice-to-have

Enterprises will begin doubling down on GenAI not out of tech enthusiasm but necessity. It’s the most scalable lever to absorb economic uncertainty by driving efficiency and speed into core operations. Generative AI is no longer an experimental play; it’s fast becoming a frontline defense against economic and policy chaos.

This isn’t about innovation for innovation’s sake. It’s about using AI where it directly neutralizes risk and drives resilience.

• Deploy AI in supply chain analytics to simulate and adapt to fast-shifting tariff regimes and trade war scenarios before they hit the bottom line.
• In contract management, AI can help ensure legal and compliance frameworks keep pace with the constant churn of cross-border regulatory changes—something traditional tools simply can’t handle at scale or speed.
• Employ AI-enabled pricing engines to enable real-time recalibration in response to inflation, tariff shocks, and sudden demand volatility—turning pricing from a lagging function into a proactive margin-preservation tool.

Cloud is the only infrastructure that moves at policy speed

Physical infrastructure is slow. Cloud infrastructure is fluid. Enterprises must move workloads for scale, regulatory flexibility, and geopolitical redundancy.

Prioritize:

• Multi-region architectures that can absorb regional disruption.
• Financial ops (FinOps) capabilities to dynamically control spend in a cost-shock environment.
• Real-time visibility into cloud provider exposure to policy risk.

This is not cloud transformation; this is cloud as economic insurance.

Supplier networks need to mirror policy fragmentation

‘Global sourcing’ is no longer the risk hedge it once was. Tariff engineering is now a constant exercise in managing policy asymmetry and geopolitical risk. Enterprises need proactive, policy-aware sourcing strategies—not just cost arbitrage.

Shift from static to dynamic supplier models:

• Build multi-vendor, multi-region redundancy into Tier 1 and Tier 2 supply chains.
• Formalize contingency agreements that can be activated under policy-driven disruptions.
• Push for shared-risk contract terms to buffer sudden tariff or regulatory costs.

Don’t overlook the strategic role of Global Capability Centers (GCCs). GCCs aren’t just delivery centers—they’re geopolitical stabilizers when designed for flexibility, not just scale. When deployed in diversified locations, they can offer enterprises a stable base of operations insulated from short-term vendor risk and tariff exposure. But to function as true risk hedges, GCCs must go beyond labor arbitrage and become nodes of agility—able to absorb demand shifts, enable rapid compliance adaptation, and support modular digital execution. GCCs can help enterprises internalize core capabilities in unstable regions while retaining control over IP, quality, and continuity.

Put spending on ice where volatility will undermine ROI

Pause hardware refreshes—sweat assets, go virtual. Hardware costs are ballooning—not just from inflation but from unpredictable tariffs that can change overnight. Enterprises should focus on extending asset life and virtualizing workloads to maintain flexibility.

Tactical plays:

• Extend endpoint lifecycles with virtualization and remote device management.
• Defer non-mission-critical data center expansion.
• Shift to hardware-as-a-service to de-risk CapEx-heavy bets.

Don’t get stuck in monolithic ERP overhauls. Big-bang ERP transformations are the prime casualties of economic unpredictability. Enterprises should avoid locking in multi-year, inflexible projects that may not align with future-state policy or business conditions.

• Use composable modernization instead:
• Integrate SaaS modules that deliver value without total system replacement.
• Use APIs to bridge gaps instead of full re-platforming.
• Deploy low-code automation for near-term workflow optimization.

Dial down frontier tech pilots to disciplined exploration

Yes, quantum, Web3, and edge AI all have transformative potential. But exploratory budgets must now reflect economic reality. Over-indexing on speculative tech is a liability in a budget-constrained, policy-volatile environment.

How to right-size frontier investments:

• Cap experimental initiatives at 3–5% of total IT spend
• Require clear scenario modeling for each pilot’s business case
• Review quarterly for relevance to evolving macro trends

Build for permanent volatility

This is no longer about weathering a single storm. The bigger risk is assuming conditions will stabilize. The most resilient enterprises act like portfolio managers—designing operations, investments, and ecosystems that can flex in real time.

Strategic actions to take now (see Exhibit 2):

• Move to rolling scenario planning instead of annual static plans
• Establish economic policy task forces with direct CIO, CFO, and COO oversight
• Deploy real-time trade intelligence tools integrated into pricing, procurement, and supply chain systems
• Reallocate 15–20% of IT and operations budgets to dynamic buffers for responding to geopolitical or policy shifts
• Treat modular architecture as table stakes—for tech, org design, and sourcing alike

Exhibit 2: Flexibility is critical to survive in a continuously moving space

Source: HFS Research, 2025

The Bottom Line: Uncertainty is not a phase—it’s the new market architecture, and structural agility is key to survival.

The US government’s economic and trade policy vacillation is no longer just a political headache—it’s a C-suite imperative. The only sustainable response is structural agility.

Enterprise leaders must abandon the illusion of predictability. Instead, they must architect their technology portfolios and operating models for optionality, speed, and resilience. Those who do will not only emerge intact but also gain an advantage when the next policy pivot hits.