There’s always a new tool, piece of software, or gadget on the horizon. And, of course, your business wants to stay ahead of the curve. But you also don’t necessarily have the budget to fund every new innovation.
How do you keep the costs at bay while still remaining competitive in a constantly evolving landscape? How do we separate new technologies that are here to stay from those that are just a passing trend? Here are 8 questions to ask yourself to help you prioritize funding for technology at your company.
1. How Do I Define Value?
It all starts with your metrics for defining value. In other words, what does a tool need to accomplish in order to be useful to your organization?
Along with your key stakeholders, define what value means to you as an organization — what you need the technology to accomplish to make a meaningful contribution to your business. This definition will guide your decision-making as you move forward in budgeting and purchasing.
2. How Great an Impact Will a New Tool Have on My Business?
If you invest in new technology, will it have a small or large impact on your overall business? It’s critical to think about this before you take the plunge.
For example, perhaps you’re considering contracting an outside software development team to ramp up your cybersecurity efforts. For most companies, this would be enormously beneficial since ensuring your business and systems are completely secure is critical to all of your efforts. Therefore, the impact would be large — and the system would be quite valuable.
3. How Does the Technology Fit into the Bigger Picture?
When you’re wondering how to prioritize funding for one tool over another, consider big-picture technology and small-picture technology. The former affects multiple people and processes, while the latter only concerns a handful of people and processes.
Take, for instance, enterprise technologies, such as enterprise resource planning (ERP) software. This is a big-picture tool that will affect practically every department — and possibly even every employee — within your company. In many cases, it will allow you to streamline your efforts and make everyone’s lives a little easier. Of course, implementing such a solution will take a lot of effort, while implementing something at a smaller scale can have a more immediate impact. You’ll have to balance these 2 in order to decide which one is better for the bigger picture.
4. Are We Using Any Outdated Technologies?
Technology that’s outdated is problematic. Not only could it break at any moment, but it can also introduce bugs and allow threats into your existing systems. If you have been ignoring updates and failing to replace tools and platforms that are old and inefficient, then it’s time to take a good, hard look at them.
Replacing, updating, or designing entirely new systems to fill in the gaps left by old ones should take priority over any other ideas for innovation you’re weighing at your business. After all, until you’ve fixed what’s broken, it will be difficult — if not impossible — to move forward.
5. What’s Our Budget?
Any company is limited by money — the amount of money they have in their budget to accommodate technology and improvements to their infrastructure. This will certainly play a role in how they prioritize spending on exciting new products.
But budgets don’t just limit funding. Depending on the organization and how money is allocated, a business might be required to spend a certain amount on certain departments and projects in order to ensure they receive the same budget the following year. This can incentivize a company to invest in more tools than they might have otherwise. Either way, budgets have a real, measurable effect on how companies prioritize spending.
6. What’s the True Value or ROI of a Project or Tool?
What’s the return on investment (ROI) for the product you’re considering instituting? If the tool, for example, will streamline your sales system, enabling your representatives to make sales more quickly and efficiently, then chances are, the ROI is high. But not all investments are quite so valuable.
Remember, too, that value isn’t always about tangible money or that the impact can take an indirect route. It could mean improved employee satisfaction — after all, many employees will probably be excited about new technology, which can positively affect their productivity. While it can be difficult to quantify, do your best to run the numbers to calculate the ROI of tools you’re considering. This will help you determine how to best allocate funds and prioritize spending.
7. Which Personnel Used or Are Involved with These Tools or Systems?
Again, this isn’t just about the number of employees who will ultimately use the platform or system. It also concerns the type of work they do and how they fit into the bigger picture. It’s up to the leadership at your business to prioritize new technology in order to best streamline operations, taking into account the roles and responsibilities that will be affected by these tools.
Perhaps it involves multiple teams — in which case it may be all the more worthwhile an investment. Or maybe it will affect a single individual, one who is critical to keep the organization running smoothly.
8. What Other Resources Are Affected?
Finally, how does or will a particular tool or piece of equipment affect the other tools and resources at your organization? Part of determining what technology you need the most involves figuring out how it fits in. Will it fit in seamlessly, helping the other system function even better? Or will it create a domino effect, causing other tools to become outdated?
Sometimes, having to replace multiple systems at once is unavoidable. But other times, you may want to prioritize focusing on technology that won’t wreak havoc on your infrastructure, forcing you to overhaul it.
Technology is vital for running your organization. But not all tools are equal. These questions will serve as a guide to assist you in determining the most critical technology for boosting your business.