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CCS Blog

Manage Your Technical Evolution

by Jim Martin

New technologies spring up daily. Many of them promise to enhance your business and improve your products. They all activate your awareness of the need to keep yourself current. After all, customers don’t want to buy from those who are behind the times. However, it’s a mistake to leap too rapidly. Ensure that the promise is real, at least where it concerns your business. At SCORE, we encourage updating, but we also stress the need for a process for managing change.

First, whenever you consider a change, start at the most logical point. You don’t embrace change simply for its own sake. You do so because it offers you something. Decide what that something should be before you consider how you’ll get there. What do you want to accomplish? If you cannot establish a goal for the technology, it might make more sense to pass on it.

Consider an example: A new program called Whack-a-Job has been announced as a tool for saving millions by trimming bloated payrolls. Don’t rush out and buy it. Ask where you might target a reduction in your staff. If you really wanted to reduce your forces, you could probably decide who would go, without the aid of some fancy (and expensive) software that could never know your business or your needs. But let’s say new software offered to simply your sales system. Ask yourself what goal you might establish if you used it. If you owned a car dealership that sold four vehicles a day, it would be of questionable use. If you owned aa high volume business where sales had to individually logged for inventory purposes, you might find it attractive. But you still wouldn’t want to buy it unless you could establish specific goals for faster inventory replacement or quicker customer throughput.

Second, look at your budget. Calculate the value of the new technology relative to its cost. Right! I’m telling you to make a return-on-investment (ROI) calculation. Now take that number and slide it up against your budget. Can you see where the funds will come from over the cost recovery period that best fits your long term objectives? If you can’t, reconsider your choice. Buying technology that will not realistically pay for itself may create a serious financial crunch later. Or buying it could keep you from adding a different, more-effective technology downstream when the funds are already allocated to what has now proven to be a mistake. No technology is valuable if it weakens the bottom line.

Remember to include in your budget whatever training will be needed to allow your employees to work with your new “gadget.” You can’t hand your employees a box and tell them to install it and use it (unless you’re the owner of a computer repair business!).

Third, look closely at the alternatives. Quite often the “new” software is a mildly improved version of another program that can be purchased much less expensively. Also, there may be existing programs that have to features you need but not the added ones that, for you at least, only make the software more expensive.

You might also want to see who else has used the new product, and (if possible) ask them what their early impressions were. Other users could tell you what features are valuable and which are not. You could see which of those is important to you.

Your final step should probably be to talk about the new technology with your staff. In most cases, they will be the ones to use it. If they aren’t comfortable with your present technology, it might be risky to install something more complicated. On the other hand, if new software made their work less complicated, if it automated the steps they had trouble with, they will probably be very supportive of the change. Talking with them has the added advantage of alerting them to the impending change, and of giving them the feeling that they have been involved in the decision.

I have talked mainly about software decisions, largely because it is one item that is now common to almost all businesses. What I have said is equally applicable to any other technology your business uses. The point is that your decisions must be carefully considered.