Measuring Technology ROI for Your Small Business
By Rieva Lesonsky
Small business owners are all about achieving new goals for 2017—and they think new technology will help them get there. The majority of small business owners polled in the report, The Business Relevance of IT in the SMB Market, say technology is a primary or secondary factor in reaching their business goals and priorities. But when it comes to measuring technology ROI, these small business owners often struggle.
What are small business owners’ top business priorities for 2017? Finding new customers/markets, implementing new systems to make the workplace more efficient, putting new ideas and innovations into practice, introducing new products or services, hiring new workers and launching new branding and marketing campaigns top the list of what small business owners in the survey by CompTIA hope to accomplish this year.
What technology updates do small business owners have on their “wish lists” for 2017? Their goals include improving IT security, effectively managing and using data, and upgrading/modernizing aging equipment and software.
The technology you use can make or break your business in today’s competitive marketplace. No wonder four in 10 small business owners in the survey worry that they aren’t spending enough on technology. Unfortunately, small business owners say, all too often technology fails to live up to its hoped-for return on investment. Among the top reasons why technology ROI falls short are:
- Ongoing maintenance costs/fees (cited by 41 percent of respondents)
- Required upgrades/built-in obsolescence (37 percent)
- Staff time needed to operate (37 percent)
- Upfront cost too high for what you get (36 percent)
- Complexity/poor user experience (32 percent)
- Insufficient features/capabilities (30 percent)
- Not as reliable as expected (29 percent)
How can you improve your odds that new technology will deliver the expected ROI?
Have realistic expectations. Technology is often positioned as “capable of delivering on the seemingly impossible,” the report states. When these magical technologies fail to live up to unrealistic expectations, disappointment is inevitable. Be sure you clearly understand what proposed new technology can actually do, including how it can work with your existing technology to solve business problems.
Balance your desire for new technology with the realities of business operations. When asked what technology would most help their business objectives, respondents cited technology that would improve customer experience, such as upgrading their websites or adding e-commerce or m-commerce capabilities. However, when asked about their technology “wish list,” small business owners tended to cite innovative, emerging technologies. Yes, new technology with all the bells and whistles is tempting. But you should never choose new technology just for the sake of the new. Instead, focus on products and services that can help you achieve key business goals.
Get help calculating technology ROI. Many small business owners calculate technology ROI very loosely, based on rough estimates or ballpark figures. Ask vendors you are considering for case studies, statistics, calculators or comparisons that can help you figure out the true cost of ownership for a technology product and the ROI you can expect. Go beyond the direct cost of the product or service to include measurements such as:
- Time savings from faster performance
- Time savings from greater reliability
- Direct cost savings such as lower fees or energy costs
- Time and cost savings from reduction in errors
- Travel cost savings
Also consider qualitative measures of technology ROI such as increased customer satisfaction, increased employee satisfaction and improved functionality.
Take advantage of software-as-a-service. Compared to purchasing and downloading software, “renting” software as a service can improve technology ROI. Upgrades are included, so you save time tracking and installing them. The software provider’s IT team handles updates and ensures security issues are patched, so you save time and hassles. And it’s easy to scale up and down as needed so you’re not spending money on licenses you don’t need.
January 03, 2017 at 09:30AM
Posted on 01/03/2017, in Business and tagged Entrepreneur, Finance, Marketing, Professionals, Small Business, Startups. Bookmark the permalink. Comments Off on Measuring Technology ROI for Your Small Business.