The Role of Technology

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Dan Weiss 115 kb

Many business people have longed for the simpler times when computers were not integral to most business operations. As much as we may embrace technology in our daily lives, it’s not difficult to think of situations where a good old paper and pencil might be the most efficient choice for a business task.

At some point, each organization must consider its pursuit of technology in light of overarching organizational goals. Even with this analysis, the role of technology seems to haunt many organizations, both for-profit and nonprofit.

What are our goals? When it comes to technology, are we a market leader or a follower? Even if we want to be at the leading edge of technology, we will want to avoid the “bleeding edge” where the “bugs” outweigh the utility. Whatever strategy we pursue, consistency is a good policy.

What will new technology do for us? I’ve seen too many companies layer on technology, year after year, with the promise and intention of saving labor costs; yet the savings never materialize. That’s because labor costs will continue until management takes an affirmative action to reduce costs, which isn’t always easy. Inertia will lead to higher fixed technology costs along with higher labor costs — a double whammy.

What will it cost? This is a tough one, because I’ve rarely seen technology projects finish within their original budgets. Will a project be worthwhile if we spend 125% of the budget?

While it’s tempting to calculate a return on investment (ROI) to determine whether a project is worthwhile, it’s often difficult to reduce technology “investment” decisions to these terms. Improved customer service and better information for decision making are certainly valuable results, but they can be very difficult to measure in monetary terms.

Are we investing for the right reasons? Business managers are people, so they are prone to making business buying decisions just like they might make personal buying decisions. Sometimes they want the latest and coolest stuff, but that may not be consistent with your organizational goals. Do you have controls in place to prevent those types of purchases?

Summary. Technology strategy decisions are among the most important ones that business managers must make. Good decision making requires a comprehensive integration of long-term business goals with cost-effective solutions.


Do you need help evaluating practical technology solutions for your organization? Contact Counterpart CFO for a free, no obligation consultation, and we’ll identify specific ways we can help you.

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