Considerations when purchasing technology for your company

Determining the value of your technology investment

Determining the value of your technology investment begins with a metric.  Let’s use a home DIY basement renovation project as an analogy.  The project includes framing new walls.  While contemplating how much nailing is required, and your mediocre nailing skills, you consider alternatives to simply using a hammer.  This leads to the conclusion that using a nail gun makes the most sense.  Now you must choose which make and model nail gun is the right tool for the job.  Is it the tool with the most features or is it the one that is least expensive?

Defining a basic value metric

You head to the local big box hardware store and are overwhelmed with the choices available.  There are different styles, angles, sizes, and features.  Being practical, you ask yourself:

  • Will I be doing several types of projects that require a nail gun?
  • Does this mean I need the most versatile model?
  • Is longevity of the tool a concern or does it need to last for this one DIY project only?

You decide that the tool with the greatest versatility makes the most sense.  Today, the tool is needed to frame a wall, but you envision building a fence, constructing a tree house for your children, and several other future projects where a nail gun would be useful.

Assessing Technology Investment

Whether to purchase or rent

Does it make sense to purchase a tool that will spend most of its useful life hanging gloriously on the wall of your workshop making neighbors and friends jealous? After careful consideration of the number of projects, how long each project may take, and daily rental costs, purchasing the nail gun makes the most sense.

Will the nail gun save you time, money, or both?

The decision to forgo using a hammer was driven by an honest assessment of your marginal skills and the project size.  You concluded that a nail gun saves time, is less exhausting, prevents bent nails, and is safer for your thumbs.  Bottom line, the benefits outweighed the costs.

How the heck does a nail gun analogy tie into purchasing technology?

How do companies most often purchase technology?

Consider how most corporate technology purchase decisions are made.   They are driven by a departmental need or issue.  The need could be mitigation of a specific business risk, the desire to operate more efficiently, better reporting, to appear “cutting edge,” or a client requirement.  Regardless of why the purchase decision was made, if its impact on the entire organization was not considered, it may prove counterproductive.

More tools does not equal improved productivity

Technology purchased piecemeal, and not as a component of an overall tech strategy, can negatively impact productivity.  Perhaps the new technology makes the performance of a particular function more efficient, but at what cost?

Does the new tool result in additional data entry for others in the group?  Will the data entry be redundant with other tools already in use? Is the new technology intuitive for users or are there so many features and functions that it is overwhelming to those who did not participate in the vendor presentations?

Don’t be intoxicated by feature rich software

Vendors often market the value of their software by demonstrating all its amazing features.  The vendor, effortlessly clicking through screens, intices the business leader with amazing features, reports, and dashboards.  Soon the business leader is considering purchasing functions their company does not need.

Most technologies today are like a Swiss Army Knife®.  Users purchase the knife because of all the features and are enamored by its versatility.  Truth is, most people only use one or two of the features.  They end up carrying a bulky and heavy tool when all they really needed was a simple pocket knife.  They already have a pair of scissors, a cork screw, tweezers, saw, and pliers. All those other tools are located where the work is typically performed and the user is very proficient using them.

How purchasing technology is similar to purchasing a nail gun

When purchasing a new tool, whether a nail gun or software, the purchase decision often hinges upon cost versus gained efficiencies.

In our analogy the nail gun was purchased for an individual.  Had the nail gun purchase been for a cabinet shop, the buyer would need to consider how the new tool impacted the overall shop.  How different is the new tool from the nail guns currently used by the shop?  Does the new nail gun require different nails or air pressure?  Are the controls in the same location as the other nail guns?

Purchasing technology for a company is similar to purchasing any other tool.  The purchase evaluation cannot be limited to how the tool performs a specific function, or even how it serves the needs of a single business unit, impacts to the operational efficiency of the entire organization must be a consideration when purchasing new technology.  In other words, technology purchases must align with a technology strategy.

Implementation is equally important!

How new technologies impact users

Introduction of a new technology or process is disruptive for all users in an organization.  Technology proficiency is the product of frequent use, interface intuitiveness, and training.  Most business leaders reasonably expect for their teams to be less productive during the learning curve.  However, if the software requires more data input, or data entered differently, the result will be additional keystrokes and decreased efficiency.

Plan your implementation well for best results

Successful technology implementation is built upon clearly defining why the software was chosen, which features and fields are used, when the data is entered, and by whom.

In the past 30 years, we witnessed dozens of failed technology implementations.  Most failures were attributable to a poorly defined, or completely absent, implementation strategy or plan.  A well-defined plan or strategy is a must for getting the most out of a new technology investment.

Spending the time to define why the tool is needed, how it is used, and how it complements the existing tech platform pays huge dividends in the long run.  Adoption of a new technology is significantly improved when users understand why, how, and when the tool is used.

Quick tech platform health checklist

  • Is your team entering the same information in multiple systems?

  • Are managers cobbling information from multiple sources to produce reports?

  • Do team members really understand why they are entering each data element?

  • Is the executive team satisfied with the level of strategic and analytic data?

Measuring the health of your technology platform
Gary Davila, CEO of 7iOG

About the author

Gary Davila is the founder and CEO of 7i Operations Group (7iOG™), a business optimization consulting company.  In addition to his duties as CEO, Gary serves as the lead solutions architect for most client projects.  He enjoys helping companies operate more efficiently by integrating their technology, workflow, and training.