Digital Advisory Services

5 Questions to Ask Before Any Big Technology Investment

Posted on March 8, 2023 by

Ben Smith

Ben Smith

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Man Considering Tech OptionsIn today’s always on, work-from-anywhere business environment, it is crucial to choose productivity tools that boost your competitive edge. Besides cost savings, the right technology stack can deliver gains in customer experience, employee engagement and your ability to innovate. The trick is making sense of the countless options out there. 

Here are five questions to help you and your team evaluate productivity tools with confidence: 

 1. Will this tool solve a business problem?

Your tech team is likely swamped with one-off requests for new software of all kinds, not to mention the constant “shadow IT” struggle to protect the business from risky do-it-yourself downloads. The balancing act here is that moving too slowly when it comes to replacing dated legacy systems can be just as costly as spending too quickly on fragmented point solutions. 

A clear technology policy can help everyone have transparent conversations about the way your company will handle digital upgrades. What process steps can be improved or eliminated? What will the total cost of ownership be when you factor in licensing, data migration, support burden, user training or customer support? 

Does the business problem you are solving have a clear process? Digitizing a flawed process can rapidly erase any short-term cost savings and take your business in the wrong direction. Rigorous process mapping and simple prototyping can help you make a business case for technology changes before you commit to any big investments.

2. Can this tool integrate with my other applications?

Software companies want to keep you in their ecosystems and grab as much wallet share as they can. Their sales engineers will paint rosy pictures of full integration across your whole technology stack but getting there is unlikely. 

A best practice is to make sure that new technology investments will support basic integration around things like single sign-on (SSO) and two-factor authentication. Another consideration is application programming interface (API) capability which enables your most important systems to share data.

3. Does this tool offer growth potential?

Related to process mapping, forecasting your company’s growth prospects is an important preparatory step when you are planning any significant technology investment. Whether you are considering a new platform for inventory tracking, team collaboration or manufacturing control, it should have the capacity to flex with the scale of your business. 

Beyond the software’s raw processing capacity, growth potential considerations also include licensing terms, security capabilities, service level agreements (SLAs) support and access to new releases. Growth potential could also be a deciding factor in choosing a cloud-based solution or software-as-a-service (SaaS) over an on-premise installation.

4. Can this tool solve more than one business issue?

Technology consolidation can reduce change fatigue in your workforce while completing two or more upgrades in one cost-efficient migration. Examples include a document control system that also automates compliance and governance functions, or an HR tracking platform that comes with built-in employee community, motivation and recognition features. 

This step connects in part with the process mapping considerations we covered earlier. The more you know about where the friction points are in your business, the better decisions you can make about tech consolidations that will bring the biggest net gains.

5. Has this tool been tried by anyone in my business network?

Word of mouth can add just as much value to your decision process as sales demos and bid scorecards. Ask around at conferences. Talk to people you trust whose businesses may be in a similar market to yours. Industry peers can give you valuable feedback on their implementation experience with a tech solution you are considering. 

Although two platforms may have comparable functionality for the price, one may offer a distinctly better user experience than the other or may require far less technical support. These are insights you can get from an industry contact that may not come out in the sales pitch. Factors like these could have a significant impact on overall uptime or transition cost. 

Continue the Conversation 

Clayton & McKervey provides trustworthy advice on tax strategy, succession planning, employee incentive programs and overall financial health to leaders in the manufacturing & distribution, industrial automation, and architecture & engineering markets. We would be delighted to talk with you about your individual business situation. Contact us today to learn more. 

*Content on this page contributed by Tevon Campbell

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Ben Smith

Shareholder, Consulting

Ben leads the firm’s consulting group, helping middle-market clients optimize results through transaction services and digital advisory support.

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