Seeing the Unseen: Hidden costs of Technology

Hidden costs involved in businesses are challenging to identify. Depending on their nature or extent, hidden costs lead towards wrong price decisions or business results. These may vary for technology; however, its impact can have a significant short or long-term effect. They might differ depending on the technology. However, the popularly known hidden costs include transaction costs, opportunity costs, the cost of intangibles, external costs, and psychic costs.

There goes a good saying – "Cheaper is more expensive when it doesn't work!" Usually, experts recommend a "wait and watch approach" for technology purchases. The recommended waiting time is around two weeks. According to human psychology, our emotions might take over our logic. One might get 'attracted' towards a particular product, service, application, or technology. If so happens, there is much possibility that we might ignore the hidden costs involved. In addition, the marketing professionals might take us on a ride. We might end up paying more during the first purchase and for consecutive transactions such as updates, add-ons, Etc. Following the waiting time will help every consumer make logical decisions, saving costs and time.

Another perspective is to understand that marketing professionals are very much aware of consumers’ buying psychology. Hence, we could see various advertisements flashing across all advertising platforms. The solution is to respect this waiting time. After this, if we still feel that purchasing a particular product or technology is necessary, then it is a green signal, as it would cover both emotional and logical thinking.

Purchasing any technology involves many options. Hence we must be clear of the hidden costs such as the availability of spares, after-sales services, scalability, security, Etc. This calls on for a proper understanding of requirements. Cost control is fundamental for the success of every organization. However, achieving this can be challenging, as it requires exhaustive supervision of the processes being developed. As an example, a failure in the execution of the process leads to delaying the tasks and also hidden costs. Another cause could be the miscalculations in the cost of production and the need for additional monitoring of actual production volumes about the reported volume in inventory.

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