Unlock the Secret to Making the RIGHT Investment in Technology: How to Ensure You Choose the BEST Option

Choosing the B.E.S.T Technology Solution

When making an investment in technology, the challenge of identifying the right option can be daunting. With so many solutions available, how can an organization ensure they make the right decision? The word "solution" is often thrown around as a way to market technology products, but it's important to remember technology is not a solution in and of itself. Technology is an enabler and accelerator, allowing processes to be performed more efficiently and freeing up valuable human resources to focus on value-added activities.

To gain a deeper understanding of this concept, be sure to check out my article, "Technology Won't Solve Your Problems". In it, I provide more detail on why technology alone cannot be considered a solution.

Now let’s define the B.E.S.T technology.

Beneficial

For technology to be truly beneficial, you must ensure there is a return on investment. This isn't just about money, but more so about how it accelerates and enables your business. Investing in technology without the need for it is not just a waste of time and resources and can be quite costly too.

Remember technology is an accelerator and an enabler; it can help automate certain processes, but only if you truly need it. Just to give you some insight on me.? I am one of those technology people that do not believe in using the latest and greatest thing. More on that in the section about Tested. Before investing in any technology, make sure your business processes are well defined.? The people and the business as a whole are ready for this change. Investing in technology without understanding the full context of your business can be a costly mistake.

To know what technology is beneficial, start with your business goals and objectives. What are the deficiencies in the business? How will this change affect the culture of your business? Believe it or not, culture can have a bigger impact on the benefits of technology more than the technology itself.? If your company operates on tradition of “We’ve always done it that way” VS a company that emphasizes continuous improvement.? The traditional company will have a much harder time incorporating these changes.??

Investing in technology can be a great financial benefit to any business. While Moore’s Law states the rate of technology advancements occur every 18 to 24 months, most businesses don't need to be cutting edge to stay competitive. Instead, be a part of the early or late majority on the Technology Adoption Life Cycle, (Shown in the graph below).? This will keep the organization competitive, while benefiting from the lessons of others.? This will be covered in more detail in the sustainable section. Being in the early and late majority will maximize your ROI.? For those businesses that are part of the laggards, they are likely missing out on the potential benefits of technology and the acceleration opportunity. Ultimately, where your company should be on this cycle is dependent on your industry and business model. I don’t advocate keeping up with the Joneses when it comes to technology but you should pay attention to what they are doing and determine if it can accelerate your business.? Which leads us to the E for Economical.

Economical

When it comes to investing in technology, you have to make sure it's something you can afford. Just like buying a car, you'll find three levels: basic, moderate, and advanced. Each brand of technology has its own unique features and capabilities to consider. When it comes down to it, the budget will determine which level to invest. You may want a Toyota Mirai ($49K), but available funds say Toyota Corolla ($22k).? Don’t get caught up in the bells and whistles.? A Corolla will help move the company towards its objectives.? If I have not said it enough, technology is an accelerator and enabler.? The Corolla will not run as fast as the Mirai but it is much faster than being on your feet.????

After the due diligence, it is determined the budget affords the basic model, investing in the basic model now is more beneficial than waiting to afford the advanced model. Not only will it be easier for your team to adapt, set up, and use, but it also prepares them for the advanced model in the future. Inside Tip: Software vendors also provide cost incentives to upgrade to a higher model.? It is more cost effective for them to make it easier for you to upgrade than you choosing one of their competitors. The Corolla will not be your permanent solution.

The management of the system must also be included when evaluating cost. To ensure the economics work, one must consider Total Cost of Ownership (TCO). Cost doesn’t stop after the purchase and implementation. There are maintenance fees typically around 15% to 20% of the software license fees.? Can your organization handle the support needs and changes the company will experience? Do you have the technology staff capable of supporting the software?? Will you need continued support from the provider?? As the business changes the technology will need to change as well.? The last thing you want to be is ERP poor.? Having a high end system that requires support but, you don’t have the funds to make those changes.? It is a recipe for disaster where you have a system and cannot afford to do anything else.? It must fit into your overall business strategy and budget.? This leads us to the “S” Sustainable.

Sustainable

When it comes to sustainability, we look at sustainability in two ways. Durability of the software company and can we maintain the software over the next 5 years?? Most companies under $100 million in revenue do not have the technology to support high technology like an ERP system.? We want a system where we can reasonably believe the software company will be in existence in the foreseeable future and how much effort it takes to support the software.?

Sustainable software company is more than will be around.? It is also tied to how invested they are in the software you are choosing.? I have seen companies receive a letter or email informing the system will no longer be supported. It takes the business from having a strategic plan to reacting to the news and having to shift strategy budget, etc to deal with this new scenario.? The one thing you do not want is to run on unsupported software.? The software is too critical to your business to allow that to happen.? Too many things can go wrong and running on an unsupported system could result in huge disruptions in operations, accounting, reporting or most importantly sales. How long has the software company been in business? Is it well funded? One of the worst things that can happen is for the company to suddenly go out of business, leaving you with no support and a technology that is rapidly becoming critical to your company.

Some questions to ask:

What is the technology roadmap for the software of the next 5 years?

What is the research and development budget for the software???

How does the customer support process work?

How large is their software development team?

So let's look at the “T’? for Tested.

?Tested

Of course, we want to test the software before going live.? However, this goes a little further than that.? Remember Technology Adoption life cycle with innovators, early adopters, early majority, late majority, and laggards.? There are very few companies that need to adopt technology at the pace of innovator or early adopter phases. It is not needed to maintain a competitive advantage.? We allow the innovators and early adopters to be the guinea pigs.? Let them work through all the bugs in the software.? Improve the system before we jump in.? Once the company has released a release or two, we know that they have corrected many of the issues.? I personally like to wait at least six months. It is inevitable for an initial release to contain a few bugs. That's why we prefer to be behind the curve, allowing the early adopters to find the bugs.? We should benefit from their enthusiasm to stay at the cutting edge of technology.

Being Tested doesn’t just apply when bringing in new software, it applies to software you already have as well. Here is an example, a health plan was using a software product, to manage their claims adjudication.? The software had been? in use for several years.? The company released an update.? The company did not have a protocol for verifying the software before releasing it into the live environment.? Shortly after installing the software, they noticed certain claims were not being processed correctly.? The company asked me to look into it. We determined the only thing that changed was the software update.? We made contact with the software vendor and it took them several days to acknowledge the problem.? This did not include the time for them to fix, test and prepare for release.? In the meantime, the company had to pay us to develop work around to correct the issues to allow them to timely adjudicate the claims to meet their service level agreement.? The update took only a few minutes to apply.? But it cost the company dearly, in time and money.??

A retail store did the same thing.? The update was applied.? Everything went along smoothly until the store realized one of the features they counted on was no longer available. After five months of back and forth between the company and the vendor, it was determined their latest update, a developer had inadvertently left out a link to a certain portion of the program. The company had to wait another month to get the fix. This was an honest mistake and nothing malicious, but the company wished someone else had found the error first.

The moral to the story is:? When looking to invest in technology… always look for the B.E.S.T

Until next time…

This article was originally posted on my blog.

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