Deciding when to invest in new technology can be a complicated business decision. Besides the obvious capital cost, transitioning to a new operating system or app can also create an entire cultural shift inside a business. When weighing whether you should limp along for another year with your current technology, here are some signs that it’s time to iterate into a new business phase.
What would you do with an extra 700 hours of free labor? Due to slow internet connection, employees that have to wait for files to download or pages to upload cost an employer 71 hours of downtime per employee per year. If you have just ten employees, you can see how quickly lost productivity adds up while staff waits for the internet to catch up with work demands.
Work productivity can be affected by other factors well. An older software system that needs constant patching from the IT department can delay projects and inhibit productivity. Both the IT professionals that are diverted from other tasks and the employees that have downtime while they wait for the system to be fixed aren’t producing anything of value. This lost time could mean hundreds of hours a month are spent maintaining inadequate systems and processes. If your employees have to regularly wait for software systems or other technology to be fixed, then it’s time to upgrade your tech.
One of our clients had significant cash flow disruptions because they were still submitting insurance claims via paper. With a 28% rejection rate, our client had to submit paper claims again and again before they were accepted. This decreased their cash flow as they waited longer than normal for insurance reimbursement. We integrated a new system with an older EDI (Check out their case study), reducing their number of rejected claims.
Are paper processes slowing down your ability to scale up your business or to comply with laws and regulations? Paper processes can literally cost you time and money. In a worst-case scenario, they can cost you your business. If the government audits your company, can you easily find all of the paperwork you need to prove your case? Automating your paper processes allows you to not only reduce errors and remove redundancies when you store data, but also to easily find the legal or financial documentations you may need.
Digitally-native consumers shop differently than preceding generations. They spend more time researching a purchase online. But when it comes time to finish the transaction, they prefer to go into physical stores. Researchers describe this purchasing behavior as letting “technology drive the shopping experience”.
Do you still use a keychain fob to access your loyalty program when you go to the grocery store? Those days are numbered. Tech-savvy consumers prefer digital to physical items and convenience over tradition. In the last few years, physical stores have had to synchronize their online and in-person shopping inventory so that consumers can order online for pick-up or delivery. Companies that don’t adapt to changing consumer behavior will be left behind as customers search out businesses that cater to their changing shopping preferences.
In a recent McKinsey study “CIOs reported that 10 to 20 percent of the technology budget dedicated to new products is diverted to resolving issues related to tech debt. More troubling still, CIOs estimated that tech debt amounts to 20 to 40 percent of the value of their entire technology estate before depreciation.”
If a company spends more than half of its IT budget on fixing legacy systems, they’re stuck in a scenario where they are constantly paying the interest on a debt that is always growing. At this point, they need to decide if the cost-benefit of repairing a legacy system is outweighed by the cost of replacing a legacy system. Technical debt is unavoidable—however, there is a tipping point where maintaining a legacy system costs more than replacing it entirely.
Information can be a crucial business asset if you have access to it. With data spread across websites, social media, in-person customer interactions, online transactions, and POS systems, getting a clear picture of buyer habits can be difficult. Information siloes make predicting trends even more difficult. But if a business can turn disparate data into a comprehensive data collection, it’ll create a roadmap for success. In order to do that, the business needs to put data at the center of its business.
Executives who make business decisions based on gut feelings have created a recipe for uneven and inconsistent growth. Applying data principles will prepare a company for exponential growth. Data can answer questions that inform business strategy. Answers to questions like these can change a product line, a website layout, or even the services that a business offers.
Hinge Research Institute reports in High Growth Study 2021, Technology and Software Edition that high-growth firms, with a compound annual growth of 20% over three years, use more technology than low growth firms. The data analytics that high-growth firms can gather from technology are a key part of their tremendous growth. Data is applied to their marketing, business strategies, and product development to provide a clear picture of future direction.
If you need better insights, it’s time to invest in technology that can track and quantify your company’s performance.
The phrase “business transformation” encompasses everything you could do to upgrade your business, from overhauling your work processes to investing in a new website. But the kind of technology or services you need will depend on your industry and business. You might need an internal app that replaces laborious paper processes so you can hire more employees. Maybe you need visibility into business data analytics. Navigating app development for small businesses can be tricky.
There’s no one-size-fits-all digital solution. Custom-built technology designed precisely for your business needs gives you exactly what you need to succeed. Waiting until you absolutely must invest in a digital solution may be too late. Ventive helps business owners and entrepreneurs place data-centered processes at the core of their business decisions. Let’s get started on your digital transformation today.