Almost half of private small and medium-sized companies spend between 1% and 5% of their revenues on tech investment. A whopping one-third of companies aim to spend over 5% of their annual revenues on technology. However, the majority of companies agree that they want to increase their investment. Tech is part of their growth strategy and they can’t afford to delay essential expenditures.
However, while technology is designed to increase performance and/or productivity, the investment can also backfire. Indeed, sometimes your technology investment drives higher costs than returns. At an age when technology is essential, it seems odd to imagine that it could be detrimental to your growth strategy. But here’s why your tech plans could go flop:
You’re too quick to replace old tech
Manufacturers rely on highly precise equipment and machines as part of their production strategy. While manufacturing equipment is a long-term investment, tech progress and advances are constantly changing. Equipment bought one or two decades ago may have become unreliable and environmentally-hazardous. Unfortunately, too many businesses think of tech investment as a way of replacing their old machinery. Renewing your entire manufacturing equipment may seem like a good idea, but it can be a devastating cost for the business. Instead, it’s worth considering cost-saving solutions, such as the GFF Power retrofit system that can bring an older machine into the 21st century. Bringing old tech to modern standards can meet tech objectives without breaking the bank.
You don’t research your options
What’s the right tech for you? With a variety of options available, businesses need to consider tech investment carefully. You don’t want to spend more than you need, and that’s why you should compare quotes and specs before committing to any purchase. Software technology and machinery can be demonstrated in a variety of ways. Therefore, it’s best to ask for a demo that is tailored to your needs than to take the product description for granted. Don’t buy until you know for sure that it’s the right tool!
You don’t check the market
It looks cool. It sounds cool. It’s well-priced. But is your business going to need it in the future? Market research can highlight the most relevant technology for the next years in your industry. We can expect some tech trends to shape the 2020s. In other words, you want to focus your attention on the technology that is going to be relevant in the future, such as artificial intelligence or voice interfaces. Otherwise, you’re wasting your money.
You miss the training part
You can’t introduce new tech tools to your business without considering how it will affect your team. Regardless of the type of technology you bring to the company, it can be beneficial to organize training sessions for everyone. Training can ensure that every member of the team is familiar with the new functions and processes. Additionally, it’s a great reminder for those who only use tech occasionally. Besides, it’s the best way of making technology a natural part of everyday processes.
You can’t grow without tech investments. But that doesn’t mean that every tech investment will boost your growth potential. Indeed, you could hit a wall if you fail to invest in the right tech for your sector or miss out on cost-saving opportunities that tick all the boxes without breaking the bank.