3 Tips to Determine if That Technology Is Worth Your Investment
By Jimmy Harris
Inventory is over, and now it’s time to get ready for annual meetings! As you’re lookingat all your income and expenses from the last year – and considering what to spend money on next year – I thought this would be a great time to continue looking at how new technologies can impact your company.
If you read last month’s article, we compared “Gadget Gary” - an early adopter of all new technologies to“Slowpoke Sam” – who only adopts new technology when he is absolutely forced to. Interestingly, both Gadget and Slowpoke believe their method is the best for ROI. But which one is right?
As with most things, the answer is somewhere in the middle. On the one hand, if you adopt every new gadget on the market as soon as it comes out, you are going to pay the highest price, and you are going to end up investing heavily in some technologies that never get off the ground. On the other hand, if you wait too long, you could really lose a lot of business to your competitors who are using new technology to do things faster, better and cheaper.
And not to be an alarmist, but if you fall off the proverbial wagon too far on either side, you might have to close shop.
So how do you decide which new technologies to adopt, and which ones to forego? Well, every business is different from the next one, but I have come up with a few guidelines based on my own bumps and bruises that I’m happy to share with you.
Guideline#1: Determine the real cost of the technology. This means you have to look beyond the sticker price, and determine what it will cost you to actually use the new technology. In our business, we do a lot of small run brochures – 200-300 copies. Some years ago, I saw the local print shop was advertising color copying while you wait. So, I went to the office, created some beautiful brochures, and happily took them to have them printed. A half hour later I was back at my office, suffering from $1 per page per side sticker shock! I ended up buying a high quality ink-jet printer for about $500, and reduced my cost to around 30 cents per page, per side. Of course it took hoursto do 100 copies, and I could only do one side at a time, but I could run the copies in the evening, and if something didn’t go wrong (and it did about 50% of the time) I’d have my brochures in the morning! So, best case scenario on a two-sided brochure was two days. Not a perfect solution, but better than paying $2/page!
A couple of years ago we bought a laser printer for about $350 that made GREAT color copies much faster than my ink-jet printer. Still didn’t do double sided stuff, but it was much faster, and I had heard laser toner was cheaper than ink-jet refills. This one fell into the “I should’ve done my homework” category! While black toner is cheaper than black ink, color is a whole different ball game! When the starter-toner ran out, we found it was cheaper to buy this same printer again - with starter-toner – than to replace the toner! This was a mistake we lived with until about 6 months ago, when I decided to research laser printers again, and took a look at three different printers offered by Dell. We bought the printer with the highest sticker price because it ended up being the least expensive printer to use! Now, I can print 100 full-color, laser quality, double sided brochures in about 6 minutes at a toner cost of about 15 cents per brochure! I paid about $750 for the printer, which is rated for95K copies per month.
Guideline #2: Think about how this technology will impact the other business systems you already have in place. Take for instance computer software and operating systems. Just before we bought our new printers last year, we bought some new computers. And all the computers we found were running Windows hot new “Vista” operating system. Trouble was, we would have had to upgrade at least two or three of our other software packages on multiple computers to be able to use Vista. This would have been an expensive software investment, in addition to paying our IT folks to upgrade all the computers, plus the down time while our people were learning the new software.
Of course, we’d have also had to buy more licenses to upgrade other computers in the system to Vista, and pay for hardware upgrades for the slightly older computers to run the memory-hungry Vista. After all this expense, we still wouldn’t have the ability to do anything we could not already do with Windows XP! So what did we do? We finally found a supplier who would provide Windows XP on a limited number of models, and bought those computers. I know we’ll eventually have to upgrade to Vista, but we were able to forego the additional expenses for at least another year.
Guideline #3: Think about how the new technology will benefit your customer. About 8 years ago, we wanted to offer our customers remote-load on-hold marketing to make it easier to implement and manage their on-hold marketing. When we called our supplier, they immediately suggested we sign up for the latest and greatest new technology that would allow us to offer higher- than-CD quality recordings sent over the phone line as digital packets. We promptly invested in all the head-in hardware and software, learned the product and began offering it, designed the brochures and started selling. We soon learned that this technology worked great in urban areas, but not as well in rural areas, where most of our customers are. Why? Because the telephone company infrastructure didn’t allow enough bandwidth in many rural areas to send the size packets we were trying to send before they would simply “time out”.
So while the customer had a unit in place that could receive and play high quality audio – we couldn’t get the audio to them! After a few months of trying to make this work, we decided to drop back one technological step to a unit that allows us to play the actual audio over the phone line. Now we could get in, load the audio and get out without a lot of hassle. And you know what the real kicker is? While the newer units do play a higher quality audio signal, you simply cannot tell the difference over a telephone line.
As a side note, I continue to keep my eyes and ears open and test new on-hold marketing systems and equipment every year. I’ve even seen some come on the scene and become obsolete in just a few years. I’m glad we didn’t adopt those. Sometimes it is really tempting to offer the newest thing on the market just so we can seem more “cutting edge”. I still haven’t found a new technology that provides a better solution for our customers than the ones we offer right now. But stay tuned, you never know when things will change!
There are many other questions to consider when you are looking at new technologies. Some of those questions include: What is the time cost? What is the marketing cost? What is the learning curve? What are my customers doing? Probably the most important one – and one we haven’t looked at yet – is “What is the expected ROI”? These are all questions you’ll have to ask yourself.
I’ll leave you with one parting thought, to paraphrase the good Dr. Ian Malcolm from Jurassic Park fame: “Just because you can, doesn’t mean you should”!
Till next month . . . Stay Sharp!
Time for Something New... Or Is It? (part 2)
