By the DynaSis Team
If you follow our blogs, you know that we talk frequently about the value of technology for driving better business results. For many business owners, the question, then, becomes: “How can I ensure it makes a difference at my company? How can I quantify its benefit?”
To be honest, a lot of technology is notoriously hard to quantify, in terms of overall financial benefit. Small improvements and upgrades are easy to quantify. If, for example, your order processing clerk’s PC crashes and you replace it, you can fairly easily quantify the value of the orders that might have been lost had they not gotten processed on a timely basis.
Even on a larger scale, you can quantify the hard dollars of specific improvements. For example, if you implement a new inventory management solution, it might reduce inventory costs in a way that you can actually see, on paper. A new teleconferencing system could reduce hard travel costs. So far so good.
The crux of the problem, for the ROI equation, is that technology benefit is not a simple dollar for dollar equation. For example, if you upgrade your infrastructure to a faster, more stable platform and give your employees better access to information, it will likely improve your customer service. Your customers will likely think more highly of you, because they will perceive you as being “on top of your game.” Try to put a price tag on that.
On the flip side, if you make a dramatic change without having the proper framework in place, it won’t deliver the results you expect and you could negatively impact customer service or employee productivity. That’s what makes the “intangible” benefits of technology so elusive.
Business owners hear horror stories of companies that spent millions of dollars and reaped very little benefit―tangible or intangible. That makes them hesitant to engage in technology upgrades unless they can see a bottom line number that indicates the improvement will pay for itself in hard dollars.
We encourage you not to think that way. In reality, when a firm spends a fortune on technology with very little benefit, generally either the solution was the wrong one or they implemented it prematurely or unwisely.
Technology is like a house. If you don’t have a good foundation, no amount of bells and whistles are going to result in a quality product. In the example of the inventory solution we mentioned above, if a company deployed a major platform like that without having the appropriate infrastructure in place to integrate it with the rest of company operations, they likely wouldn’t achieve the benefits they sought. The new system might actually reduce the efficiency of their inventory management and delivery mechanisms.
To resolve this conundrum, firms should evaluate their existing technology thoroughly and then plan improvements and upgrades from the bottom up―the foundation. Above all else, you must achieve stability, performance, availability and security in your corporate technology platforms. That alone will result in a huge improvement in productivity, and can foster better customer service and faster delivery. Then you can add the rest of the layers to build something that’s really stellar.
Such an approach requires a roadmap that looks one, three or even five years into the future. If you don’t have a strategic technology roadmap that steers every decision, you may luck into the right combinations of solutions, but you won’t be able to quantify their benefits. You won’t know where you were or how far you have come.
Don’t get us wrong―solutions that promote mobility, better data management and other important functions are vital to the success of most businesses today, but they pieces of a puzzle, not the answer on their own.
We invite you to fill out our inquiry form or give us a call at (770) 569-4600 to discuss what you want to accomplish and how you will need to prepare for it. Optionally, if you want faster results, we can show you ready-made, cloud-based solutions where someone else has already laid the proper foundation.