It all starts with your metrics to define value. What does a tool need to accomplish to be useful to your organization?
There's always a new tool, software or gadget on the horizon. And, of course, your company wants to be ahead of the curve. But you also don't necessarily have the budget to fund every new innovation. But in a rapidly changing business landscape, it's important to stay ahead of the curve.
How do you keep costs under control while remaining competitive in a constantly evolving landscape? How do we separate the 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 to define value. In other words, what does a tool need to accomplish to be useful to your organization?
Together with your key stakeholders, define what value means to you as an organization – what you need technology to accomplish to make a meaningful contribution to your business. This definition will guide your decision-making as you move forward with budgeting and purchasing.
For example, maybe you want to attract more visitors to your website. An increase in the number of users is therefore something valuable for your business. In this case, you would want to invest in analytical tools as well as technology that supports SEO to drive traffic to your website.
2. What 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 business as a whole? It is essential to think about this before taking the plunge.
For example, maybe you're thinking about hiring an external software development team to step up your cybersecurity efforts. For most businesses, this would be extremely beneficial, as ensuring your business and systems are completely secure is critical to all your efforts. Therefore, the impact would be large — and the system would be quite valuable.
3. How does technology fit into the bigger picture?
When you're wondering how to prioritize funding one tool over another, consider big picture technology and big picture technology. The former affects multiple people and processes, while the latter concerns only a handful of people and processes.
Take, for example, enterprise technologies such as enterprise resource planning (ERP) software. This is a comprehensive tool that will affect virtually every department – and possibly even every employee – in your company. In many cases, it will allow you to speed up your efforts and make everyone's lives a little easier. Of course, implementing such a solution will require a lot of effort, while implementing something on a smaller scale can have a more immediate impact. You will have to balance these two to decide which is best for the big picture.
4. Are we using any outdated technology?
Outdated technology is problematic. This is often the case with legacy systems, technologies that not only can break at any time, but can also introduce bugs and enable threats into existing systems. If you've been ignoring updates and failing to replace old, inefficient tools and platforms, then it's time to take a good look at them.
Replacing, upgrading or designing entirely new systems to fill the gaps left by old ones should take priority over any other innovation ideas you are evaluating in your business. After all, until you fix what's broken, it will be difficult—if not impossible—to move forward.
5. What is our budget?
Any company is limited by money – the amount of money it has in its budget to accommodate technology and improvements to its 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 company may 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 encourage a company to invest in more tools than it would have otherwise. Either way, budgets have a real, measurable effect on how companies prioritize spending.
6. What is the true value or ROI of a project or tool?
What is the return on investment (ROI) of the product you are thinking about introducing? This is the relationship between profit or net profit versus cost or investment.
If the tool, for example, streamlines your sales system, allowing your reps to make sales more quickly and efficiently, then the ROI is likely to be high. But not all investments are so valuable.
Also remember that value is not always about tangible money or that impact can occur indirectly. This could mean greater employee satisfaction – after all, many employees will likely be excited about new technology, which can positively affect their productivity. While it can be difficult to quantify, do your best to calculate the ROI of the tools you are considering. This will help you determine how to best allocate funds and prioritize spending.
7. What personnel have used or are involved with these tools or systems?
Again, it's not just about the number of employees who will use the platform or system. It also concerns the type of work they do and how they fit into the bigger picture. It is up to your business leadership to prioritize new technologies to better streamline operations, taking into account the roles and responsibilities that will be affected by these tools.
Perhaps it involves several teams – in this case, the investment may be even more worthwhile. Or perhaps it affects a single individual, someone who is critical to keeping the organization running smoothly.
Consider factors beyond using the tool itself, such as the training needed to get everyone up to speed, which takes time from the trainer and everyone who needs to use the tool.
8. What other features are affected?
Finally, how will a particular tool or piece of equipment impact or affect other tools and resources in your organization? Part of determining which technology you need most involves figuring out how it fits together. Will it fit perfectly, helping the other system work even better? Or will it create a domino effect, causing other tools to become outdated?
Sometimes having to replace multiple systems at the same time 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 financing: first steps
Technology is vital to the functioning of your organization. But not all tools are created equal. These questions will serve as a guide to help you determine the most critical technology to drive your business forward.
