To a small-business owner, choosing technology can be daunting. On one hand, the latest gadgets can glitter like a well-stocked toy store, with vendors promising to put a company on the cutting edge. On the other, budget constraints mean purchases must pay for themselves in the long run.
So, what is the best way to ensure that technology outlays will be money well spent? Although answers to this question can vary widely based on a firm’s industry niche, employee base and maturity, experts say that for every growing business, there is a perfect technology recipe. The key is finding and exploiting it.
Les Wanninger, a professor at the University of Minnesota, said small businesses should start by identifying what their customers want them to do better. Chances are that salespeople or employees who handle complaints already know what these things are, he told the E-Commerce Times.
“The important thing is to align that purchase with what your customers most want you to do, rather than what a vendor is pushing that month or what seems like the next big thing,” said Wanninger, who has organized an e-commerce conference at the university every year since 1996 and recently completed a National Science Foundation-funded study of e-commerce trends.
“For a small auto service station, it might mean being able to access my car’s records online or make appointments,” he added. “Something like that can be done for a very small outlay of money up-front, really only a few thousand dollars. It doesn’t need to be expensive or fancy. You’re not doing it to show you’re high-tech or cutting edge, you’re doing it to show you care about the customer.”
For far less than US$5,000, for example, a working Web site can be set up and even maintained for two to three years, according to Wanninger. Other options include adding outsourced or hosted customer-service applications to existing Web sites. Such products, which are offered by KnowledgeBase.net, among other companies, start at less than $5,000 and can pay dividends by reducing the number of customer calls made to an employee-strapped company.
“If the customers see you’re thinking of them, it will pay itself right back,” Wanninger noted.
Other companies may benefit more from looking inward at their own IT infrastructure. Because almost all technology gear has come down in price, items such as computer networks and data storage, once the purview strictly of well-heeled enterprises, are now available to businesses of almost any size.
For example, a company of fewer than a dozen employees could network all of its computers for just a few hundred dollars. For a few thousand dollars, it could step up to a hosted virtual private network that would give remote workers, traveling salespeople and others access to the network.
Likewise, whereas enterprises may set aside entire buildings to store data, small businesses can use online backup services, such as LiveVault, to store information that can be retrieved easily in the event of a problem. Pricing on LiveVault’s services starts at about $3,000 for a typical small business.
Of course, the end goal of all technology purchases should be to enable employees to work more efficiently so that companies can complete more work in less time, boosting the bottom line.
“The biggest impact of the technology revolution has been the impact on employee productivity,” John A. Challenger, president of human resources consulting firm Challenger, Gray & Christmas, told the E-Commerce Times. “The impact has been greater among bigger companies because of the scale, but smaller companies have enjoyed the benefits as well.”
Think Long Term
One of the hardest aspects of deciding where to invest money is determining accurately how much a purchase will cost over the long run. Research firm Gartner estimates that even for a device as simple as a desktop PC, 80 percent of the total cost of ownership (TCO) is attributable to management, administration and upkeep over the machine’s lifetime. The PC’s ticket price represents just 20 percent of TCO.
“Firms can get bitten by the back-end costs at times, especially those that have less experience with buying technology,” Steven Toole, vice president of marketing at small business ERP vendor Icode, told the E-Commerce Times. “Larger vendors have been slow to evolve their offerings for smaller companies, so there is danger there if they go in without knowing what they’re getting.”
For instance, a PC will require updated virus protection and other software updates during its lifetime. Networks probably will need even more attention than PCs from a security and operational standpoint. Also, buying group licenses for a variety of software programs can prove costly when it comes time to renew those licenses, Toole added.
“Businesses need to think of the whole picture before they buy,” he said. If they do so, in this buyer’s market, real deals can be forged.