Don’t invest in the next big thing

We’ve all had the conversation about the latest and greatest technology that is sure to revolutionize the local business scene. It typically starts with some phrase like, “You're missing the boat” and ends with the warning, “If you don't sign up, you’ll be out of business in six months!”

The conversation always remains the same, it’s just the buzz words that change. The buzz words have ranged from cloud computing to social media to the latest killer mobile app. If you take a step back, you’ll see that it was the same for client-server applications, mobile phones and even mainframe computers. IT research firm Gartner has coined the term “hype cycle” to describe this overall introduction of technology and, in particular, the “peak of inflated expectations.”

 As business owners, we're exposed to this banter from a wide range of sources, not all of them well meaning. It may be from friends who are excited about a new tool, other busi­ness­ peo­ple who may also be competitors or that cheerful sales rep who just wants to let you in on a great new feature. The problem for most small business owners is that the advice you receive is often contradictory or would cost more than you have to invest. It’s difficult because you don't want to miss an opportunity but you don't want to go broke chasing hunches.

This is especially true for small business owners who don’t have large margins that allow a lot of experimentation. They need a way to cut through the hype fog and keep their business on course.

 As I tell the business people who come to me for advice at SCORE DC, this is the point to step back and review what it is that you would use that technology to accomplish. Are you trying to increase sales or do you need to improve your cash flow? You need to start with your business objective as you consider the options. Notice that it has nothing to do with technology or the buzz word.

Once you’ve identified the business goals, you can take a look at what tools can be used to impact those goals. Consider:

●You want to look at tools that can impact more than one business goal. Technology tools take time and money to learn. If you can get by with fewer tools, your learning curve will cost you less.

●You want to use tools and vendors you already have. This may include new modules to an existing tool or a complementary product. Using fewer vendors will simplify support and may improve the integration of the tools (data sharing, etc.).

●Don't overlook different ways to use existing capabilities. I know clients who have used their Outlook calendar as a project management tool.

●Look into the ways to measure the impact of your technology to reach your business objectives. Tying things back to your business goals is an important concept to stop you from chasing technology bells and whistles. Check the metrics offered by your tool and relate them to your business goal.

●Prioritize your technology initiatives according to those that have the biggest impact on your business objectives for the dollars spent. This is the cost benefit analysis. Don’t forget that cost includes a lot more than the purchase price of the tool — it includes the time to learn and use the tool. Things like social media are free to buy but take a lot of time to use.

 Next, after you’ve put together your list of technology tools that are a good fit for your objectives, don’t rush out and buy all the tools at once. The next step is to lay out a reasonable plan or roadmap that takes into account factors like the ability of your staff to learn and adapt to the technology.

This is the time to be realistic about the capabilities of your staff and not just assume that they’ll catch on. There will be a period of time during which productivity will dip. You should plan for that and spread out your deployment efforts to allow for that loss is profit.

For more information, check out eBusinessNow.org, a site created by SCORE and a host of corporate sponsors which provides free advice on how to select technology, improve your Web site and make effective use of social media.

Joe Clarke is a small business mentor and chapter chair at SCORE DC .

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