In this week’s post, we examine how small businesses can maximize the value of their technology investments, whether ensuring what is already in place still is suitable or injecting a new solution to solve a particular problem. Before diving in, let’s recognize that technology continues to reshape almost every aspect of almost every industry. Companies of all shapes and sizes continue to examine technology trends to better understand how changes in the technology arena can help them. Not all technology trends, however, will prove a game changer, especially for small businesses. Therefore, a structured approach is necessary for small businesses who want to maximize the return on their technology investments.
Most technology fads come and go without adding much business value, but every so often something comes along that truly has potential to change the way we do business.
Think about broadband expansion, cellphone adoptions and the social media explosion over the past 20 years as examples. If history is any indicator, only a few will adopt early, but in a relatively brief time, acceptance takes hold and this “thing” that was once cutting edge is now a standard. These technological revolutions will continue to affect and shape the business landscape. In fact, we can count on increased technology inflection points occurring at a faster pace. The impact on people, industries, sectors and companies will continue to prove significant.
Let’s examine that structured approach that will prove an advantage to small businesses. STEP 1 – Formalize the Decision-Making Process The first step for a business that wants to maximize their technology investment is an understanding of the decision-making process that directly affects the spending on technology-related goods and services. If there is no discipline behind the decisions, with guiding principles to align those decisions with company goals, then each technology investment risks failure right from the beginning.
STEP 2 – Optimize Costs
The next step is optimizing costs. Of course, this can mean different things to different people. Too often “cost optimization” is interpreted as “cost reduction” or “cost cutting”, but this is not what we mean. Cost Optimization, in today’s parlance, means continuous discipline to align spending with company initiatives (both tactical and strategic), reducing cost where applicable and maximizing business value from the technology budget.
Just because a technological solution is expensive does not mean it is not already optimized; especially if it generates tremendous business value. The idea around cost optimization is to drive out unused and/or wasted cost so that investment in value-generating solutions can expand.
STEP 3 – Optimize Technology Assets
There are many studies that say approximately 30% of software and SaaS is unused. This doesn’t mean, however, that there is potential to save 30% of software and SaaS spending. It’s important to examine license agreements, renewal terms, maintenance agreements, warranties and company use to understand the value a company gains from software subscriptions, hardware purchases, online services and support contracts. This is called “Technology Intelligence” and it’s tremendously important, especially for small businesses who want to keep control of their technology spend.
It was not too long ago that a Lithuanian man was caught after scamming Google and Facebook out of more than $100 million in an elaborate scheme involving fake invoices. The criminal sent invoices to these big tech companies hoping they would simply pay them without question. And he was right. It’s critically important that careful examination of technology spend is conducted on a regular basis with an associated critique of the value that spending brings to the company.
Anniversary or renewal dates are an excellent time to review use and consider the cost/value relationship. A good practice is setting up a calendar reminder each time a subscription is started or renewed. This will ensure timely review a year or more later when circumstances are likely to change. The reaction of vendors to questions that are raised about their service is sometimes a good sign if further investigation is called for.
STEP 4 – Prepare for New Investments
Despite cutbacks, reviews, a search for savings and optimization efforts, the time will come to invest in a technology project or solution; it’s inevitable. If the phone system dies a business can make do with cell phones, but that’s a temporary solution and a new phone system will need to replace the dead one. Preparation for planned and unplanned tech investment is the key to maximizing the return on investment (ROI) for these necessary expenditures. Understanding and staying prepared for the implementation is just as important and the solution itself. Partnership with a reliable technology support team can make the difference between a smooth transition and a larger nightmare.
Technology influence will remain pervasive in all industries, across all sectors and in all vertical disciplines. Businesses of all shapes and sizes must make technology investments at one point or another, even if it is purely a defensive posture to ensure proper cybersecurity measures. Small businesses can take control of their technology investments by keeping them strategic and building them into budgets before there is an emergency.
Keep these points in mind to ensure a healthy bottom line when it comes to technology ROI (return on investment).
Roark Tech Services is the perfect partner for small businesses that want to understand how to optimize their technology investments. We understand the necessary approach, the fit-for-purpose need and the critical nature of vendor management. We are experts in the field and are uniquely qualified to help small businesses stay safe & competitive. Always consult with us first. If you don’t have an IT Partner that you can trust to give you the right support and advice, we’d love to help. Contact us.