When I first started working in the mailing industry over 25 years ago, postage amounts were set by turning small dials on a meter. The latest model copiers included two paper trays, instead of the standard single trays used today. Word processors produced output using a daisy-wheel printer. Fax machines, cell phones, e-mail as well as personal computers were unknown to the general public.
Back then, it was easy to make technology purchasing decisions. There were few choices, and many of the products were so expensive that few companies could afford to make the change. And it was difficult to make a business case for changing. Why would attorneys ever want to edit something with a keyboard and a screen when they could mark up paper copies with a pen and then have their secretaries retype the documents?
It may feel good to have a laugh at our attitudes in 1980, but none of us know what awaits us in 2030. In fact, few of us know what new technologies will hit the market in 2006. With so many unknowns, it's important to build a sound technology investment strategy. That strategy should consider: The Big Picture, Risk Assessment, Your Personal Risk Tolerance, Continuous Feedback Loop and Upgrade and Abandonment Planning.
The Big Picture
New technology is often alluring, promising faster processing speeds, less downtime and better reporting. It's nice to have the newest tools and capabilities. However, you must consider how that technology fits in "The Big Picture," including your corporate strategy and interfacing with your department's other systems.
Before starting down any path with technology, make sure it's heading in the same direction as your company's IT department. For example, IT may only support certain platforms, like Macintosh, XP or UNIX. There may be enterprise agreements with certain providers that offer special pricing or include the right of first refusal on any purchase. If your company's IT department is outsourced, new purchases may require a review to determine if support will be provided and at what cost.
Get to know the people in your IT department. Ask for a meeting with a senior manager to gain insight on their direction. Discuss what you're considering and see if it fits in with the company plan. While you're in the planning and development stage, ask for an IT person to be assigned to your project to ensure support later.
After making sure your plans are consistent with your company's strategy, make certain that any new technology is compatible with the other equipment in your department. You need to consider: Can you interface with the other systems, or will you have to create workarounds? Will the new equipment feed information directly into your reporting system, or will you have to build a new procedure? Does the new technology have an open architecture, or will a proprietary system require you to use only one vendor?
These questions aren't meant to stop a purchase but are designed to bring out any challenges a new system may bring. Workarounds are used every day, but if a workaround requires too much effort, you may want to consider other options. A new reporting system could be a good thing, but that may require additional resources. Choosing to stay with a single vendor usually brings pricing and support advantages, but it also may limit future growth. Do your research, weigh your options and be prepared to explain your decision.
As shown in Figure 1, most technology purchases can be characterized as:
Minimum Risk: Projects with little exposure and low cost (e.g., buying a digital camera for yourself).
Political Concern: Projects with a high degree of exposure, even with a low cost (e.g., a new coffee maker for the office, especially for offices with a lot of coffee drinkers).
Budget Concern: Projects that may not be seen by many people, but are expensive (e.g., purchasing a big screen television for a conference room).
Maximum Risk: Projects that impact many people and are also very expensive (e.g., upgrading the network server for your company).
Personal Risk Tolerance
Map out where your projects are on the quadrant and determine the exposure for your company and yourself. Your company may have policies that limit the risks they're willing to take. As a manager, you should have an established
comfort level on how much risk you're willing to take. It's appropriate to consider your comfort level when selecting new technologies.
With technology, most people fall somewhere on a risk scale of laggards, mainstream, leading edge and bleeding edge (See Figure 2).
Laggards generally acquire technology long after it's been introduced and often after it's been replaced with something new. They wait until the technology has become so invasive they feel forced to buy it, and then only grudgingly. Think of someone who's just bought his first VCR.
Mainstream is where most of us fit in. We wait until the technology has been proven and costs have come down. We're comfortable knowing that the product will work and most of the bugs have been worked out. For example, many people bought their first digital cameras over the last year.
Leading Edge people enjoy trying new things. They keep their personal computers up-to-date with the latest versions of software. As soon as a new gadget is announced · in the trade publications, it shows up in their offices. These people probably have personal Web sites or blogs.
Bleeding Edge technophiles want more than new equipment; they want to be the first ones with the new equipment. They volunteer to have beta versions of software and equipment. Their names or companies are often case studies used by vendors to plan their next moves. Bleeding Edge buyers a
Where you are on the risk scale will greatly influence your investment strategy. You should also consider where you need to be. The greatest opportunity for success is somewhere between the mainstream and the leading edge points on the scale. The greatest risks have been taken by others, but the technology is still new enough that you don't have to worry about it becoming obsolete too soon.
Success with technology purchases isn't reached at implementation; it's realizing the promised benefits or discovering unplanned benefits. The best way to know if you're being successful is by establishing a continuous feedback loop.
Asking for feedback is risky. You may have to listen to the complaints of dissatisfied users. Not getting feedback is riskier. Dissatisfied users will still complain, just not
to you. And you may not be aware of the problems until it's too late.
Establish regular meetings with users and technical support. Encourage open dialogue with questions such as:
1. How well is the software/product working?
2. What did you think about the training you received?
3. What are the system's greatest strengths/weaknesses?
4. What improvements would you want in future releases?
5. How does this product work with other technology being deployed?
Upgrade and Abandonment Planning
There are few certainties in life. The only three I know of are death, taxes and the fact that the replacement for any technology you buy today will be available tomorrow. No purchase can "future proof" your operation. You don't know what products will be supported a year from now, what new equipment will be released in the upcoming months or what companies may file for bankruptcy within the next week.
All technology purchases must include upgrade plans. These plans could include free software patches or credit towards the purchase of new releases. Discuss these items when evaluating products and have the upgrade plan written into the contract. If the financial situation allows, lease, don't buy, technology.
Abandonment must be planned for two reasons newly created technology may address your business needs in a new way or the product you bought doesn't perform as planned. The former may be hard to recognize and the latter may be harder to admit.
Fax machines exploded on the market in the 1980s, and companies invested a lot of money in hardware. Fax servers have been available for more than 10 years; however, companies are still reluctant to give up the small, inefficient, expensive equipment on their desks. Keep your eyes open for new opportunities. Study the leading-edge buyers, and stay close to their moves.
Admitting that a product isn't performing as planned is a greater challenge. Many businesses invested in customer relationship management (CRM) software at the beginning of this decade. Despite unfulfilled promises or difficulty interfacing with existing systems, most companies kept the products and kept spending more money to try and get the systems to work. Budgets were blown and people lost their jobs. Few leaders were courageous enough to face the facts and stop the projects.
Fail to Plan, Plan to Fail
Selecting new technology is a risky venture. There's no crystal ball to tell the future, and sometimes you may end up purchasing the wrong product or selecting the wrong technology. Developing a strategy for selecting and investing in technology will reduce the risks and help you be successful.