How Should Entrepreneurs Deal With New Technology?
Despite all the praises you will read on adopting the latest in technology to boost your business, the decision to acquire new technology must be thought out carefully. The truth is that, for most companies, jumping on the bandwagon without a careful assessment is rarely a wise move.
Dealing with technology is a complex decision and there are so many factors to consider. Hopefully, I could jumpstart the process with a few basic suggestions:
Review your current equipment/ software for untapped capabilities. One time, I bought a software package to replace the old one we were using. There was one new feature that I particularly liked because it automated a procedure that previously took many steps in the old version. To my surprise, one of our staff pointed out that the old software also had this function. Had I known this, I would have opted not to upgrade just yet. This also applies to production equipment. It is very possible that you have not discovered all of your old machine’s capabilities. Sometimes a less costly modification is all that is needed to bring about the desired new performance without incurring the huge expense of buying new equipment.
Get feedback from your personnel from both the production and marketing departments on what are the most essential technologies to obtain. It is imperative that you consult with both your production and marketing people since they would have better ideas of what could best help their operations.
Survey the field for potential technological boosts or threats to your business. Get information regarding this from the leading firms in your industry, not only here but also from those in advanced countries. Check if the innovation is indeed useful or just a waste of money.
Understand the technology. If you take some effort to gain understanding of the technology you are studying, then you have a better idea of its potential and limitations. One of the most critical factors to consider is the technology’s robustness. How reliable is it in actual conditions? Often it is not mature enough to be adopted, so perhaps it would be better to wait first until all the bugs are corrected.
Compute the return on investment on the technology. Since new technology is often extremely expensive, there must be an objective basis to justify its purchase. In doing so, you must track not only the purchase price of the equipment or software but also all the costs associated with the new acquisition. Some of the items that must be accounted for are the cost of training and transition expenses.
Do not be left too far behind. While I do not advocate grabbing the latest technology just for the sake of being first, it is also dangerous to be left too far behind. People have a tendency to be attached to the ways of the past and you must be careful not to be biased in favor of traditional methods. You may not be getting accurate feedback if you express your preference for the old ways, especially if you are the owner or their superior.
Consider the availability and cost of service and parts. Being among the first to utilize a technology usually means that the support system to sustain its use is probably still being put into place. See if this fact would offset the advantages, especially if it would be for a critical aspect of your business.
Make sure your employees can utilize the technology properly. I learned of the importance of training when I caught an employee using the old manual method instead of using the newly purchased quality control devise. Vendors of new software or equipment often allocate too little time to train buyers on their use. This is then aggravated by the buyer not monitoring if their people are able to use the product properly.
Factor in your company culture and personnel demographics. If a large part of what drives your people’s motivation is having state of the art equipment, then it may be one major reason to upgrade. The age of your personnel also plays a role—the younger they are, the better they can adapt to the new acquisition.
Consider your image with customers. Besides the return on investment, this factor is among the most crucial. Unfortunately, the positive impact of addressing customer expectation by indulging them with the latest technology is hard to quantify. In the vast majority of cases, as long as what are you using achieves its purpose, it would be wasteful to spend just because the newest thing came along. However, there are other factors that may change this assessment. It may be that you could use the technology to reinforce your image as the most advanced company in the industry. A good example of this is seeing some retail shops buy consumer gadgets in the grey market before the official release of the gadget in this country so that they would be first to have it in stock. Your company gains the impression that you are the most up-to-date vendor.
Setting company policy regarding new technology is one of the key decisions that will heavily influence the future bottom line of your company. It is best to have a long-term view of such matters. Eventually it is inevitable that new technology would take over the old. Still, the question remains on how soon and what type of technology you should invest in.
*Originally published by the Manila Bulletin. C-6, Sunday, February 17, 2013. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.