While most small businesses require technology to grow, they are also likely to have tight budgets and be unable to invest in “pie in the sky” IT projects with no guaranteed returns. That’s why it’s important to lay down a technology investment strategy that aligns with the specific goals of your organization.
Begin by looking at your business strategy over the next two to three years and determine in which areas you plan to grow, change, or improve. It will be easier to identify technologies that can help your business if you have a clear picture of where you’re heading and what steps you must take to get there.
Once you’ve set down your business strategy, you should appoint a member of your organization to track IT trends and advancements in the marketplace. With the explosion of possible technologies available to you, it can be helpful to have someone on your team who is on top of the current products and trends.
Sit down with this person and list the key technology areas they should be monitoring based on your business needs. For example, these areas could include business applications, data warehousing, Web services, or wireless technologies. By creating this list you can begin to assess which technologies are likely to impact your business. Do any of the technologies you’ve listed present growth opportunities or offer significant improvements in performance or customer service? Are other players in your industry using these technologies to enhance their businesses, and if so, how?
This list of technologies and opportunities is a way for you to narrow down your technology requirements and come up with a well-thought-out investment plan.
Once you have some technology projects in mind, talk to a trusted IT advisor and run a cost/benefit analysis. (If you don’t already have an advisor, be sure to read How to Choose an IT Consultant.) Look carefully at your technology budget over the next few years, taking into account the cost of maintaining and supporting the IT you already have.
Create a short list of IT investments that you can not only afford, but will also help you achieve your stated business goals. Prioritize these investments according to the benefits they will give your business and then start to look at factors such as the time it will take to implement and test the new technologies, the staff required to support them, and any necessary training.
The project that offers the greatest benefit may also be the one that requires the most time, money, and staff. Investing in one large project may mean you don’t have the resources to invest in others, so you will want to do a risk analysis of any significant project you consider undertaking.
Technology projects are notorious for running over time and budget, so make sure to plan for possible overruns. It’s better to have a realistic idea of the costs you could be facing. If the project comes in on time and on budget, it will be a pleasant surprise!
Finally, continue to update your IT investment plan and monitor new technology developments. The last thing you want is an aged IT strategy that misses out on the current opportunities in the marketplace. Keep in constant communication with your trusted IT advisor, and once you embark on a project, update your investment plan with new deadlines or cost estimates.
Keep in mind that while most recognize that technology advances at a rapid pace, many small business owners neglect to plan for technological obsolescence. Read Anticipate Obsolescence When Planning Your Technology Investment Strategy for some good advice.
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.