Knowing when it's time to invest in new technology for your business is sometimes easy—a system fails, or you have a new line of business that requires a change.
But other opportunities for a tech upgrade may be lost if you are not specifically looking for ways to improve operations. When business is ticking along, issues getting managed and deliverables being met on time, why look any further?
There are actually several reasons why you should always be on the lookout for ways to improve operations through better technology.
First, it will keep you ahead of the competition.
Second, it will enable more efficient operations, which translates to better bottom-line results and the ability to take on more business without the growing pains that a less up-to-date company will suffer.
Third, advances in information technology over the past few years have come so far and so fast that not keeping up with the opportunities they afford can put your business in jeopardy. There can be a significant opportunity cost in failing to make smart tech investments.
Barriers
But unfortunately, not everybody understands the importance of what is essentially a constant process of renewal. There are a number of barriers—some real, some imagined—to tech acquisition.
First is the "if it ain't broke, don't fix it" attitude. The logic is simple—if a process or solution is doing an adequate job, then there's no reason to spend the money to upgrade it.
While the desire to leave well-enough alone is understandable, this approach can lead to poor decision making and can result in the waste of resources. For example, if your systems are working, but you are having to add extra personnel hours to make them work, or they require elaborate work-arounds that have evolved over the years, are you really being efficient?
Chances are there is a better solution available.
The second principal argument managers make against getting the upgrade path is the notion that new technology requires a huge upfront investment and serious, long-term commitment. This is no longer the case. Businesses have choices now, and with cloud-based applications available for a monthly service fee, the initial investment is minimal, and the risk of committing to software that's not quite right is also diminished.
The cost of the status quo
Ignoring the potential of new technology to improve your business operations is like keeping your head in the sand. It's nice and quiet, even though there could be an apocalypse going on around you.
While your head is buried down there, bad things could happen to your bottom—and bottom line—while it's left sticking up in the air. In other words, you could be exposing yourself to numerous risks.
If you are making operational decisions based on data that's not in sync with current realities, you'll be unable to predict demand and trends that will affect your ability to respond to market changes. (1)
As well, you are potentially missing out on whole new worlds of efficiencies that new technologies are delivering.
And, to make matters worse, you are sitting on a potentially very costly IT upgrade if your old system fails before it can be replaced with proper planning. [1]
Be brave…and reap the rewards
While it's easy to continue doing things the way you always have, just because it's comfy, you are running a big risk of being left behind by more proactive competitors. You also leave yourself open to the potential nasty surprise of learning how much money you were actually wasting while you thought you were saving by avoiding outlays on IT.
Take a hard look at your processes. Better yet, get an outsider (an analyst) to take a look—someone who doesn't know the workarounds. Research what your competitors are doing.
In the current market, where speed, accuracy and constant evolution are the benchmarks for business success, you may be managing, but can you advance? If your systems don't position you for agility and efficiency you need to take another look.
Just because it's working, doesn't mean it couldn't be better. Don't be afraid of new tech—learn about what it can do for you. And do the cost-benefit analysis. You may be very pleasantly surprised by what you find in a modernization scenario.
As the Business Development bank of Canada noted in a recent blog: "Technology is changing our world and ratcheting up the competition on your business. You can make up for lost ground and win the race, but you’ll need to invest to compete and seize new opportunities." [2]
- "When should you invest in new technology", http://bpanalytics.com/when-should-you-invest-in-new-technology/
- Pierre Cleroux, Technology: An opportunity not to be missed. BDC blog, https://www.bdc.ca/en/blog/pages/technology_opportunity_not_be_missed.aspx
- Larry Alton "How to Know When to Invest in New Small Business Technology" March 06, 2015; http://www.smallbusinesscomputing.com/News/ITManagement/how-to-know-when-to-invest-in-new-small-business-technology.html