Selecting your technology- how to strike the right balance
By: David Nelms
Numerous factors impact an organization’s technology-related needs. Expansion of the business, operational changes or inefficiencies, obsolescence of current technologies, and increased risks or regulations are just a few things that often cause business leaders to evaluate new technologies or technology partners.
With most technologies, there is rarely a perfect, “one size fits all” solution. Making the appropriate selection typically requires evaluating tradeoffs and striking a balance between several factors. When organizations are faced with choosing new technologies or partners, we recommend taking the following steps:
STEP 1. Understand your needs and the problem(s) to solve – We’ve seen too many cases where organizations are aware of issues that need to be addressed, but the issues described are actually symptoms of other potential problems or needs. Don’t pursue major technology-related investments without clearly understanding the problem(s) to fix. Also, take into account potential needs that will arise in 12-24 months.
STEP 2. Establish each criteria for evaluation – Define the criteria for evaluating potential solutions based on the organization’s goals and needs. Examples of criteria may include cost, functionality, ease of use, scalability, security, reliability, and vendor reputation. Realize that there will often be overlaps or correlations between many of the things that need to be considered, such as cost and capability. However, if the factors used for evaluation aren’t clearly identified upfront, it is challenging to assess tradeoffs to make an informed decision.
STEP 3. Evaluate multiple options – Even if there seems to be a slam dunk fit for a given need, take the time to identify other potential alternatives. Evaluating multiple options can help you make a more informed and objective decision and ensure that you select the best technology for your needs.
During this evaluation process, consider the following to help you determine the best path forward:
#1. Cost – When reviewing costs, consider upfront and ongoing costs, integration costs, return on investment, and opportunity costs. Weighing these factors will enable organizations to make informed decisions. Remember that major technology expenditure is an investment– Do not lose sight of the benefits the investment will have.
#2. Security and Risk Management – Secure systems and understanding security-related capabilities and potential risks are essential for all software, hardware, support providers, or cloud systems. It is up to you to assess the potential risk by asking the right questions while considering your risk tolerance.
#3. Reputation – Regardless of whether you are looking for a system or a provider, evaluate their reputation in the marketplace. This can be accomplished by reviewing customer reviews, ratings, testimonials, and case studies. This will help you understand the partner’s reliability and track record. Note that cutting-edge solutions or innovative partners offer competitive value. However, they will most likely have little or no track record, and as a result, these solutions often bring unexpected risks.
#4. Overall Capabilities – Flexibility is key – make sure your new potential system and/or provider is flexible and capable of growing with your business to help you stay ahead of the curve. Strive to structure any agreements so you only pay for what you need as you need it. Don’t pay for things you won’t use within a reasonable time frame. The great news here is that many commonly available, reasonably-priced systems already have terrific features that can efficiently address the needs of most mid-sized businesses. These systems are also constantly adding capabilities to remain competitive. However, still, do your homework and make sure the features you need support your business.
#5. Workforce Implications – Considerations related to the workforce have always been critical, but in today’s business environment, they are more critical than ever. Expectations are high, and tolerance for issues is low. Tools an employer provides for employees can directly impact job satisfaction. For partners, are they a good cultural fit? For systems, are they intuitive and flexible enough to meet your employee’s needs and expectations? Can employees be easily trained on the system?
#6. Overall impact associated with the change – Change is good, but don’t just make changes without fully understanding what’s involved. Understand both hard costs and soft costs. Consider the internal processes or workflows that may change with the new system or partner.
There are many things to consider when making technology-related investments. The areas mentioned above are brief examples of some items to be considered. Any decision made will be based on a balance of many factors. Where technology is involved, take the time to be objective and consider the relevant factors before committing.
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If you are faced with critical decisions and are not comfortable with how to get started or how to manage the process, our team is happy to help. If you would like to discuss potential needs or issues related to your technology or business operations, please contact David Nelms at dnelms@warrenwhitney.com.
MAKING POTENTIAL HAPPEN
