5 Factors to Consider Before Investing in Technology for Your Business

Deciding which technology to invest in can be a challenging guessing game for any business owner. There seems to be a new gadget or service that comes out everyday – offering to make your work easier in some way.

Being a good judge of new products – and being able to separate the facts from the hype – is important. But the most valuable gauge is how each technology is able to deliver a return on investment (ROI), while addressing your business goals. Here are some considerations to keep in mind as you ponder your next purchase.

How will this make your business more profitable?

It seems like an obvious question that every business owner would ask before making a big decision, and yet it's not hard to find companies (including very successful ones) that regularly skip this crucial step. This is particularly true at larger firms where money isn't tight and executives have greater latitude to forge ahead with the latest systems, in an effort to stay up-to-date.

Generally, there are three key ways a new technology should improve your business: by saving you time, by saving you money and by improving productivity.

If you can't identify how the new product will support all three factors in your business, it's worth rethinking the investment.

There are other potential "qualitative" justifications that are not as easy to calculate – such as improving employee morale or improving reputation or image – but you should have some very strong evidence (i.e. feedback from employees or customers) if you choose to rely on them.

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If it’s not broken…

Even if your business is profitable, you should still be conservative in how you use your funds to support your company growth. Unfortunately, it's common for businesses to quickly implement new technology to assist its steady growth, only to find that it fails to meet the organization's requirements.  

For instance, many companies assume that they can reduce labor costs or make workers more productive by mechanizing certain customer services and replacing human operators with answering systems. You don’t have to look far to find a customer who will become disgruntled with a company due to these automated systems providing inferior service.

Indeed, a a recent survey of small business owners found that "poor user experience" accounted for a third of instances when owners said that an investment in a new system did not provide the ROI they anticipated. Before diving into the latest system, ask yourself: How is this fixing or improving the processes or tools that I’m already using?  

The cost of training

When a technology company quotes you on the cost of an application, it's also critical to factor in the time that goes into implementing the system, as well as the time to train everyone to effectively use it. New software, for instance, will require a fair amount of time to get everyone to a stage where they are comfortable adopting it.

Training and onboarding staff can be a hidden cost, given that it takes time away from employees performing their normal job functions. When evaluating vendors, ask them about what documents and procedures they have to help you roll out the solution – and if they deliver ongoing service as you get up to speed. At Timesheet Mobile, we pride ourselves on the ease-of-use of our employee tracking solution. We offer multiple language availability, integrated voice response (IVR), desktop and smartphone app options, as well as integration with bookkeeping and payroll software. Providing user guides, training videos, a free online demo and 24/7 customer support ensures a smooth transition.

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For any implementation, always consider whether the eventual improvement will make up for the productivity lost during the training phase for you and your team.  

Do your research

If you're making a substantial investment, be sure to conduct considerable research first – especially if the type of technology you are seeking to invest in is outside of your area of expertise. There are plenty of great online resources that you can consult to get a sense of whether the product you are considering is right for your business.

Mainstream and niche tech publications, such as ZDNet, SC Magazine (for security products) and Engadget (for gadgets, consumer electronics) are great sources for expert insight on the latest product releases. In addition, there’s a thriving ecosystem of business software reviews online, with sites such as Software Advice and Capterra, often described as the "Yelp for IT."

Additionally, you can gain some valuable insight by asking your peers about what products they are using, and the pros/cons from their experience. Many small business tools – including Timesheet Mobile - will let you try the product for free for a period of time, before you opt to buy.

Worth the wait?

While the latest and greatest innovations always tout their game-changing features, it's not always what it claims to be. There’s a long list of inventions that promised to transform the world, but flopped miserably, proving that sometimes hype is just that.

Sometimes it's best to wait a couple of months to see if a new and intriguing product produces the promised results. This gives you the chance to more comprehensively assess the issues that people may be experiencing with the product. Alternatively, you may find that the hype is justified, making you more confident about adopting the technology.  

Is there existing data?

Every new product promises major changes, but only some can prove it to you through data. While some changes to your business will be intangibles that are impossible to quantify through objective metrics, you should seek that type of analysis whenever it is available.

Timesheet Mobile, for instance, delivers measurable ROI for businesses through the massive amounts of data that its employee timesheet app generates. One Texas construction company reports that switching from a paper-based system to Timesheet Mobile's employee tracking app saved the company $5,000 a month.

Factor in employee opinion

Anytime you make a big change, you should be sensitive as to how it will be received by your workers. Whenever possible, solicit their opinions on what technological changes, if any, will help them improve job performance. Your employees will appreciate the opportunity to voice their thoughts on the matter, and provide their two cents on what big changes might be coming.

The buck stops with you and sometimes you are going to have to make changes that some of your workers won’t like. But they'll feel better about them if they are at least given an opportunity to present their concerns and see that you have taken them into account. It will be critical to communicate with them thoughout the process and make sure that the technology lives up to its promise to improve efficiency.  

Active assessment 

No matter what business you’re in, you need to remain current on the latest innovations so that you don’t miss out on a key tool, feature or product that could give you a competitive edge. Equally important, however, is to approach every new technology with a critical eye, asking yourself as well as the product vendor, insightful questions about whether it will truly contribute to the success of your business.

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