Technology runs business. Even small businesses rely heavily on technology. Yet, as technology advances, businesses are slow to take advantage of those advancements.
Sometimes, the technology is too new and unproven, and companies choose to wait and see if it will be worth the investment. Other times, they perform studies to determine if they will see a return on investment if they do upgrade. This is smart for the business. If the technology does not provide a solution for the company, or if it there is no ROI if an investment were to be made, then the business will save themselves money in the long run.
There is a third reason as to why a business does not react to improving technologies: they do not want to spend the money it would cost to invest. This mentality is coming, not from an intelligent assessment of the new capabilities and long term cost savings the technology could provide, but from an unwillingness to spend.
This can be detrimental to a business. The determination to continue to do things they way they have always been done, with the tools that are already available, can lead that company to ruin (as you will see later). This could force the business to take on additional debt in order to continue operating. Here, you will find the main reasons why businesses should invest in the technology they are using and prevent going deeper into debt, or worse: shutting their doors.
#1. Cost Savings
Businesses have to think long term. If they focus on simply the here-and-now, then they have no chance of growing; too many companies have this mindset, however. Thinking long-term will allow them to assess the cost of doing business with the current technology and compare that to the cost of operating with newer technology. More often than not, switching over to an upgraded piece of equipment can save a company in terms of manhours, maintenance, and supplies.
#2. Improved Operations
By installing the latest advancement, companies are able to improve the processes within their business. Cloud-based software allows a company to take advantage of a fully-developed program that is maintained from outside the company. It promotes accessibility and collaboration across different departments, countries, and continents. This can generate a final product for the business faster than older, more costly methods of collaboration.
#3. Improved Profits
The above scenario can also lead to an increase in profits. By producing at a faster pace, whether from Cloud-based apps or improved machinery, the business can produce more in the same amount of time. This gives them the opportunity to take in more clients or sell more of a product. The more that is sold, the more profit there is from that increased cash flow; and it is profit that keeps companies in business.
Remember the debt we talked about earlier? Besides the business debt, it can cause business owners to take on personal debt to cover their own expenses because they may need to take a pay cut in order to keep the business operating. This can all stem from not investing upfront on technology that can save you in the long run. The right investment can keep the business and business owner’s personal finances healthy.
#4. Surpass Competitors
If you remember (or knew to begin with), K-Mart was the top retailer in the United States in the 1980s after 90 years in business. Wal-Mart had only been operating for 20 years back then, but it was the younger company that quickly overtook the more experienced company.
Why? Because K-Mart thought that the tried-and-true ways would keep them on top of their competition. Wal-Mart, on the other hand, invested in new technologies that allowed them to cut expenses, improve their operations, and increased their profit margins. In less than a decade, K-Mart had not only been surpassed by its younger competitor but forced into bankruptcy; and after 30 years of struggling, the company is near its end.
These four reasons are the most important ones to consider when new technology becomes available. Companies of any size – small businesses or big corporations – can only benefit from incorporating new technology into their operations. They need to be cautious about which ones they end up investing in, but the ROI is worth the initial expense.