by Jim Martin
Too many small business owners fail to include a technology path In their business plans. They do so for a variety of reasons. Some feel their businesses will not change enough to need new technology. Others view this as an issue they will address as it arises. Some argue that technology isolates them from their customers. Some simply fear technology. They are all wrong.
They fail to consider several important points. First, technology (at all levels) evolves at a mind-boggling rate. In 1980, I paid $3,600 for a computer with 256k of RAM, a text-only green-and-white monitor, three floppy drives and no hard drive. Today, you can drop one 0 from that price and buy a computer that will blow that one away. The shift in memory is particularly dramatic. Last week, I bought a ruggedized USB flash drive with 64Gb of memory for $19.95. That’s over 250,000 times the memory of what was the state of the art 37 years ago.
In layman’s terms, that means today will always be faster and denser than yesterday. This is what the vast majority of everyone’s customers now expect. They expect response times on your web site to decrease. They expect to be able to ask questions of your web site and receive answers almost before they’re done typing. They expect those answers on their computers, their tablets and even on their phones and watches. They expect you to have the computer power and versatility to track every shipment to every customer in real time, and make it available to them. And they will continue to accelerate those expectations over time. Used creatively, technology, rather than isolating you from your customers, can bring you closer to them. You might even find yourself serving a larger geographic area. The internet can cause that.
In most cases, newer technology will allow you to manage your business better. There are programs that can automate your payroll, automate your production control, automatically order fresh inventory, keep track of your inventory (utilizing bar codes) and many more tasks that now consume too much of your time. You can also manage planned employee absences (days off, vacations) with computer programs that will alert you to conflicts before (rather than after) you have agreed to requested dates.
You should also consider that the programs to safeguard the security of your data and the integrity of your data, the software to handle customers credit and debit cards and the hardware to protect your valuable systems from surges and power outages have all become more sophisticated. That translates to fewer worries for you. And I haven’t even mentioned the impact of the incredible advancements in phone technology and digital imaging.
Hopefully, you’re now convinced you need a technology plan. The next step is obviously to establish one. You can make it simple or complex, depending on how much technology you use in your business. But every good technology plan should contain a few core elements.
Your first step should be a technology audit. Develop a complete picture of what you use, how you use it, who has access to what systems, how rugged is your password system, how well protected are your systems, are the customer side of the system and the in-house side totally fire-walled from each other and so on. Part of the audit should be a list of the problems you have encountered over the last three to six months. You cannot write a good technology plan unless you know what it’s based on and where the flaws are.
Secondly, set a schedule for future technology audits. Depending on how much IT equipment you use and how it is set up, this should happen every three to six months (again depending on system complexity). If you have an IT technician (either on staff or under contract), he should be involved in all audits. You should rely heavily on his inputs in structuring the audits and the plan.
What you want to quickly examine in each audit are the key metrics of your systems. First, how well do they work? Are they doing what you expect of them? Logging all customer complaints is a key tool in making this determination. How do they compare with other firms in the same industry? Falling behind your competitors is a mistake when technology drives customer expectations. Are your employees comfortable with them? New technology offers more ways to establish user-friendly routines. Do they offer the speed and precision that your set of tasks requires? Having automation doesn’t help when its inability to handle the rate of demand slows it dramatically. Are your security targets being met? Your data is one of your most valuable assets. You should minimize who has access to that data, and strictly limit access to the underlying software. And lastly, do your employees each understand that part of the technology which they access in their day-to-day functions. After the first audit, subsequent audits should take less than an hour (if there are no major problems).
After you’ve completed the audit, determine what upgrades you will need to make now and in the near future. Determine what new training those upgrades will require. For example, if you install voice recognition software, you should train employees in its use. In looking at upgrades, you need to be aware of the changes involved in the upgrade. Everyone who recently migrated to Windows 10 found it was different in many aspects. Some people became comfortable quickly; others needed short tutorials to bring them up to speed. If you plan an upgrade that will require employee training, establish the training schedule to coincide with the installation. (The employees will be uncomfortable with the new system if they haven’t been oriented to it, but you can’t orient them without installing it.)
As part of each audit, you should look at what your competitors are doing. You want to not merely keep up, but to remain ahead of them. E are in an age in which technology is a business advantage. You want to make sure you’re the one utilizing it.
In addition to those upgrades driven by your audits, you also need to set specific schedules for adding new systems that are over and above those currently employed. To a degree, your audits should anticipate those future changes in order to assess compatibility with the current systems.
Lastly, you must budget for technology maintenance and upgrades. This should be a somewhat flexible budget. You can’t always predict the exact timing of expenditures. The key purpose of the budget is to ensure that you have the funds allocated specifically to IT and other technology so that they are there when needed. You don’t want to suddenly divert money from other areas of the business (thus starting a painful game of dollar-chasing catch-up for different parts of your business). The first year or two might be difficult, but this is where you could use some advice. What you need to set meaningful estimates is some knowledge of the prices of what you will need. There are a number of catalogs on line that will help you with that.
You should probably plan on an upgrade cycle of two to four years. As Gordon Moore forecast sixty years ago, technology evolves in two-year cycles. The nature of your systems will define whether you want to participate in ever cycle or in every other one. You should not try to extend your upgrade cycle out too far, though. The people who produce these incredible gadgets we all depend on are not interested in supporting technology that is already two cycles obsolete. When you need help, you want to find them still supporting what you’re using.
If all of this has confused you a little, talk to your SCORE mentor. He or she can help you with your planning, and he or she is free (unlike the tech that your system’s manufacturer will send).