Collectively, businesses spend trillions of dollars each year on acquiring and upgrading their technology infrastructure. Enterprises rightfully see investing in technology as pivotal in realizing their goals.
Yet, technology is not a magic wand that companies can simply wave and all their operational challenges disappear. Every day, numerous businesses make catastrophic mistakes when buying new systems. Such costly errors can be avoided by paying attention to the following common pitfalls when it comes to technology acquisition.
1. Don’t Focus on Price Alone
Budgets are necessary because no person or entity has infinite financial resources at their disposal. However, the place of a budget in driving purchase decisions can be overemphasized. Whereas you shouldn’t venture into the marketplace without a clear understanding of how much you are willing to spend, it shouldn’t overshadow the reason for buying the new system.
If you fail to prioritize functionality and instead focus on getting a system at the lowest price, you will get what you pay for and eventually be forced back into the market for a replacement. Ultimately, your attempt to spend as little as possible could see you spend much more in the long term.
2. Don’t Forget Your Requirements
System acquisition must be driven by business need. Every so often, you’ll hear of a large organization that implemented a new system that ended up being a colossal waste of time and money. Often, the problem has little to do with the system itself. It’s simply a case of useful technology applied to the wrong problem.
That’s why the process of spelling out your requirements and expectations is much more important than the process of evaluating different providers. Spend more time in defining what you need the system for.
Separate the must-have from the good-to-have requirements. Only purchase a system that meets all the must-haves and accommodates a significant proportion of the good-to-haves. For instance, age verification to prevent sales to minors is a must-have requirement for businesses that sell age-restricted products like tobacco and alcohol, but detection of fake IDs is seen as a good-to-have because the legal expectations are less strict.
3. Don’t Expect it to be the Same as Your Current Technology System
Just because a system is categorized the same way as your existing software does not mean it will be the same. For example, no two banking systems are the same. Even when buying a newer version of your current software, it’s never simply plug-and-play.
When buying new technology, factor in the time and effort that will be required for it to completely replace your current system. Your existing system likely interfaces with other enterprise applications. You have to be sure that after installation and configuration, such compatibility can and will be retained.
4. Don’t Nurture Silos
We often underestimate just how easy it is for employees to fall into organizational silos. Each department within a business is tasked with a specific responsibility. It is therefore only natural that the department will seek to find technology that will perfect the execution of its function with the assumption that other departments within the same organization will strive to do the same.
Silos are a notorious source of bottlenecks, inefficiency, and conflict. When line managers are allowed to make their own technology purchase decisions with little regard for the needs of other departments, the end result is chaos.
To discourage silos, technology acquisition should be centralized. As much as possible, businesses should seek to purchase systems that have enterprise-wide functionality. Where that isn’t possible, the system should be compatible with existing systems within the organization.
5. Don’t Overlook the Provider’s Reputation
Great technology can provide massive efficiency gains for a business. However, you cannot separate the human element from the technology. The company you buy the system from will be involved in its implementation. You’ll also need them to provide support in the event that you run into problems that your in-house IT team cannot resolve.
The technology provider’s reputation is therefore fundamental. What is their corporate culture? How responsive is their customer service? When they promise to call you back, how soon do they do so? Do their employees exhibit a solid grasp of what their system can and cannot do? Most times, the warning signs of poor service will be apparent fairly early in your communication.
What do organizations who have bought this or any other system from them have to say? Thanks to the internet, a bad reputation is difficult to hide. Google now includes review ratings in search results.
One of the reasons you should avoid making an expensive technology purchase from a brand new company is that you have no past experience to refer to. More established providers have already earned a certain reputation which will give you a good idea of what you can expect.
6. Don’t Ignore the Long-term
A new system can be an expensive undertaking. All that can go down the drain if a business focuses on just the here and now.
Keeping up with the competition and responding to fast-changing market dynamics can be compelling reasons for a business’ fixation with immediate needs. However, a company that loses sight of the bigger picture and long-term goals sets itself up for failure.
When buying a system, anticipate future requirements, so you do not have to return to the market for a new system a few months later. All IT project teams should maintain regular communication with senior management to ensure the project is aligned with the overall long-term strategic objectives of the enterprise.
7. Don’t Be Discouraged by Initial Downtime
When you acquire new technology, you can expect some growing pains. The new system must be configured and existing software updated to ensure a smooth exchange of data. Employees must be trained and standard operating procedures changed.
During these early days and weeks, you can expect several outages as the organization adapts to the new environment. You’ll also face resistance from staff who’ve grown accustomed to the old system and a particular way of doing things.
Do not assume you made the wrong decision simply because of these early hiccups. Even the best systems will be plagued by problems during this early phase. As long as testing and implementation are planned well, these pains should clear out in a month or two and a return to normalcy experienced thereafter.
Acquiring new systems can be an arduous process that is prone to wide range miscalculations. By looking out for these pitfalls from the get-go, you increase the chances of successful implementation.