How To Keep Technology Costs From Spiraling Out of Control
In a connected world of trade and business, investing in technology is inevitable. Whether old computers that need to be recycled or new software implemented to manage more information, the cost of technology is inescapable but can also spiral out of control. This could happen to the point where technology costs start eating into your bottom line and undercutting your efforts. Having worked with over a dozen mid-sized companies that were looking at enhancing their efficiency and productivity through technology, we have distilled a list of three things you must avoid (or keep an eye on) in order to rein in those runaway technology costs.
If it ain’t broke don’t fix it
A tried and true saying when it comes to investing in technology. One of the great temptations when it comes to technology is to want the latest and greatest tool or software lately released into the market. For instance, tablet computers are a major trend in the world of mobile computing but this does not mean you have to buy tablets for your employees. It’s also not enough to “think” that your people will be more productive “if only” they had tablets. Technology is an enabler, not a substitute for hard work so if your employees are not productive without tablets, tablets won’t make them more productive.
We suggest a different tact, a needs-analysis approach. Every year, do a review of all the technology you use in your business and run an audit. How have people been performing with the current technology? Can they perform better with better technology or is the current technology actually hampering their efforts? How much will it cost to purchase new technology or upgrade existing ones and will this be recovered through increased efficiencies and throughput? These questions help you lay a business case foundation for any investments you may make in technology.
Managed over bought
Buying technology for your company can be expensive. Think about the cost you will incur if you had to set up a data center for your company versus leasing space in an outsourced data center. When it comes to technology, always consider managed services as your first option. It may seem like owning technology is the best way to go but technology changes fast and you may (will) find yourself left behind by current trends and advancements because you cannot keep up if this isn’t your core business. If you need a warehouse inventory management system, it’s better to hire a technology company to implement this for you and add any customizations you require on the fly. This way, someone else loses sleep over whether the system is running rather than you. Of course there are those instances where buying is better than leasing. For instance if you want a custom built platform that is unique to your business.
It must pay for itself
Technology can be a fancy white elephant that simply adds no value to your company’s bottom line. Whenever you plan to invest in technology; whether a mobile app or a new accounting system, always ask yourself, will this technology pay for itself? How do you know whether it will pay for itself? This is where working with a third-party technology company comes in. They will be able to look at your company from an eagle point and advise you on what you may need based on what’s currently in the market. For instance, they may tell you that as hot as mobile apps are, they simply aren’t for every business. They will also tell you that when you do switch over to Windows 8, you will need to invest in touchscreen monitors. They will be able to tie in various business cases with what’s in the market currently. In some instances they may even advise you to scale down or remain as-is.
The bottom line is, technology in business and in personal life play very different roles. You probably have a dozen or so games on your smartphone because entertainment is part of your life. In business, everything is measured against bottom line thresholds. If it’s not bringing in more money either directly or indirectly then it’s not worth the cost.
As you look at various technology advances happening around you, always keep an eye on your business and its innate dynamics. Some types of technology will multiply your efforts exponentially while others will drag down your productivity. Choose wisely before you sign that check.