The big problem with technology is that it can be so darn good you want to use it all. Making matters worse, it’s cheaper and cheaper so there are less purchase barriers.

Like all consumption, too much technology will give you business lethargy. Wasted time, wasted investment and the scary one - redundant technology (that’s the kind you stopped using almost as soon as you paid for it).

The golden rules of technology investment:

1. Use a few really good technologies to keep it simple.
2. Make sure you make full use of those technologies.
3. Be prepared to change a technology for a better one.

Use A Few Really Good Technologies To Keep It Simple

What is the turning point where buying technology stops generating productivity gains. I’d argue it is a lot sooner than you think. Complexity costs money and distractions cost money. What is a really good technology:

Good Engineering and Design

The automotive industry has proven this time and again. Engineer and design well and the market will be all over your business to buy your goods and services. People will pay disproportionate amounts of money versus the practical gains. Does Hyundai really underperform a BMW when taking you from A to B. No, but the BMW driver is willing to pay for the design and engineering difference that gives them sheer driving pleasure. You can have 3 or 4 Hyundai’s for the same money. The point being it is disproportionate assessment of value by the consumer. People don’t buy on price, it’s a 2nd or 3rd order consideration.

Photo by The Aga

Automation Creates Time Where It Didn’t Exist

I always say to people,

Experiences and time are limited in life, money isn’t.

The number one thing you all want more of in your life and seem powerless to get it is time. Automation using technology buys time. Dishwashers, Email Campaign engines, Cars (automate walking) and Finance Engines like Saasu.com) are just a few obvious ones

Total Cost of Ownership (TCO) Is Not The Goal - Terminal Effect On Equity Value Is More Important

Good technology has a low total cost of ownership. What rubbish! Care about your terminal effect. It may cost you ‘x’ to buy, train, support, implement but this is not the terminal effect on the value of your business. This terminal value is the present value of all effects on your business over time if you discount them back to today. You don’t have to do the maths, just understand the concept and your mind will think differently. This can mean extremely obscure effects like not dual keying a contact from a business card into your accounting and CRM system. This one task might save a sales person 10 minutes a day being 2,000 minutes a year. That’s just one person. When I say total I mean total, you need to look at the knock-on effects the technology causes, the productivity gains and costs associated. Go way beyond software sales peoples TCO rubbish.

Make full Use Of Those Technologies

At some point you need to stop adding technology to you business process, stick to what you have got and concentrate on getting stuff done, better, faster and cheaper using what you have. For a practical way to do this just get a piece of paper and a pencil. Write a list in order of the work flow, production line or whatever is appropriate. Pick a couple of things in that list that cause you problems, delays, losses and then get a second bit of paper and write a list (in order) of what you need to invest/do to fix them. Keep work on the worst parts of your technology solutions and you will end up producing a Nintendo Wii or an Apple iPod product like result.

Be Prepared To Change A Technology For A Better One

Sometimes you need to make the time investment and move to a newer technology that will pay you a return over time just like any good investment. If you suffer from procrastination or short-term thinking you probably don’t do this one very well. The reality is it takes an upfront investment in time and money. Its the ant’s preparation versus the grasshopper’s complacency.

This isn’t rocket science, it’s quite the opposite, you buy the rocket scientists that will help you create time where it didn’t exist and build quality into your product or service in a continually improving way.