Tuesday, October 19, 2010

How Technology Can Improve Profitability and Productivity

More on technology from a CFO or CEO's perspective:

The tail wags the dog when small business (or medium-sized business) owners, CFOs, or managers make decisions about technology that abandon business principles. This article will share ways to avoid common business sense to navigate "techno babble."

Several months ago, I was approached to purchase a voice mail system for my company. The technical reasons were somewhat incomprehensible to me . . . "It would load-share incoming lines . . . we could track long distance call patterns . . . the computer could be programmed to provide messages in four languages . . . & every other firm had one!"

I declined.

That weekend, I was jogging with a company CEO and the subject came up. He said, "We were able to save the $20,000 - $25,000 salary of a receptionist, phone messages could be retrieved 24 hours a day, and we could hear a detailed client message, complete with inflection & emotion." He amortized the system in 12 months.

I bought an upgraded voice mail product the next week.

People need different types of computers to do their jobs. Some need powerful PCs. Some need powerful laptops & some need simple devices running off of a network to word process. The key to a business decision does not lie with hardware or even mega servers but with meeting company needs.

As a business decision maker, you have to replace "I need" with "This is how my purchase will improve productivity & profitability."

Companies must understand that technology is a major tool in staying competitive & squeezing more productivity to increase profits.

Most companies today have a network or are contemplating one. The mistakes I see result in wasting money, under-sizing the network, or being dependent upon a network engineer as the only person to touch the network.

Here are 3 keys to network upgrading or installation:

  1. Go through a design/planning stage. Decide what you want the network to achieve before you get into specifications.
  2. Ask for options if you expect to allow employees to work remotely (i.e., from home or from various destinations when traveling for business) or expand your operation. Also ask for support & training after the installation.
  3. Always, always use an external entity to provide an assessment. Get two or more, if necessary. Why? Sometimes a company's IT arm/department makes decisions based on their own job security and what would be really cool technology to have, instead of what makes the best sense from a company perspective. This is how so many companies end up with shelfware. (Shelfware is technology or hardware purchased but never installed because the business units don't understand the benefits.)

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