So you’ve taken your passion and made it into a business. You anticipated the hard work, the budgeting, the marketing, and the sales; but what you didn’t expect was to be thrown into the deep end of buying and managing technology. You are not alone. Many small business owners find that to be competitive they have to quickly come up to speed as to how technology affects their business. These days even small business owners need to be tech savvy. That doesn’t necessarily mean that you have to become an expert, but you do have to know how to match technology spending to your core business needs.
As the Internet boom and bust of the late ’90s showed us, technology is not a silver bullet. It must be managed like a business, with clearly defined costs, benefits, and objectives.
Start by thinking about what your company needs to run smoothly, serve its customers, and support its staff. What are your core business needs and what are your problem areas? Then ask yourself if technology can be used to address any of these needs, solve any of these problems, or perhaps make a marked improvement in the development of the business.
Here are a few questions that can help you decide whether a technology investment aligns with key business objectives:
- Will the technology satisfy customer relationships by providing support, communication, or product delivery functions?
- Will the technology help you manage the value of your business by protecting your intellectual property, supporting your staff, or improving the quality of your product?
- Will the technology investment help you meet planned growth objectives?
It is a mistake to look at the technology first and then try to apply it to your business. By first asking these types of questions, your company’s organization, goals, and purpose will head your search. From there you can research what technologies support your requirements.
Once you’ve identified your core business needs, it’s time to prioritize. Make a list of the most critical needs and determine if they can or should be solved through technology.
Do a cost/benefit analysis of each potential project before heading further down the investment path. Will the benefits produce an incremental improvement in your business, or will they be substantial? How much is that improvement worth vis-à-vis money, employee productivity, customer satisfaction, and other key business benchmarks? Who will manage the technology and do you have the necessary support structure to handle it?
It’s always a good idea to look around and see how other companies in your industry have used technology to address their similar problems. There’s no need to reinvent the wheel; you can learn a great deal from those who have already successfully tackled these dilemmas.
While surveying how other companies are using technology to solve business problems, keep in mind that each business is unique. You want to make an investment that is appropriate to your specific business and budget.
Develop your own IT strategy and be able to justify the investment by showing how it will help you meet core business objectives. Finally, make sure you understand the requirements of the solution before you sign off on a project.
Once you’ve made the investment, continue to track the technology to ensure that it aligns with your current objectives.
While technology has certainly transformed the way in which we do business, apply it like a medicine rather than a cure-all. Identify your company’s specific needs and pain points before prescribing a remedy. Just as taking the wrong medicine can sometimes hurt you, so can applying the wrong technology.
For more information on managing your IT investments, read Who Should Manage Your Company’s IT Investment? and Match Your Technology Goals to Your Company’s Future Strategy.
Scarlet Pruitt is a freelance writer and business consultant based in San Francisco. She has covered business and technology for publications in the U.S., Europe, and Latin America.