Technology: Cost Center or Competitive Advantage?

by David Moorman, President

Technology should not be considered a cost center but, rather, should be viewed as a way to gain a competitive advantage in your marketplace. Day-to-day management of a company’s infrastructure should be just a small part of what IT staffers do.

An IT spending survey from Accenture reveals that most companies spend 70 cents of each IT dollar on continuing operations and maintenance, but the ideal ratio is 55 cents for maintenance and 45 cents of each dollar on value-added IT services that can bring a competitive advantage.

If you’re not already, here are a few projects you should be working on:

1. Conducting data mining of your customers or your market. Data mining is the process of finding patterns in your data that can help identify your target demographic, Web site traffic trends, and what types of products or services are most popular. That information can be used to tweak your offerings to hit the “sweet spot” of the market and identify likely new customers. This can be much more effective than renting a list for direct marketing or e-mail marketing.

2. Planning for a disaster scenario. Data varies by year (and the prevalence of terrorist attacks or major natural disasters), but few companies have comprehensive business continuity plans in place. While a major incident is unlikely to occur, the simple loss of communications or data could put your company out of business if you’re not adequately prepared.

3. Exploring a CRM solution. Customer relationship management solutions have been making inroads into the small- and medium-sized business market. Deploying an effective CRM product can result in more sales and happier customers. Isn’t that what every business wants?

Deploying technology for technology’s sake will not gain you the competitive advantage that you want. Before investing in any product or service, you should determine your ROI, a fancy acronym that simply means, “Will I get my money’s worth by making this purchase?”

That should be the job of your IT staff, to make those determinations so you can make wise business decisions. In today’s lean and fierce marketplace, the success or failure of your business could ride on the outcome.