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Keeping up with technology print Print

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Rapid technology change has opened up so many new opportunities for businesses that the task of keeping up can seem quite daunting. This guide offers some simple principles to help you make the right choices.

Technology has brought many benefits to businesses, such as the ability to:

  • Speed up work processes by automating functions (such as accounting tasks and financial reports).
  • Keep powerful databases of customers (for example, for direct marketing campaigns)
  • Enhance communications (for instance through email and the Internet).
  • Compete better with larger businesses by being able to produce professional looking documents and presentations.
  • Open up whole new markets via the Internet.

However, since resources are seldom unlimited, technology also brings the need to allocate your resources to greatest effect.

Falling costs

The good news is that the cost of most technology equipment has fallen dramatically in real terms over the past 10 years. Even the smallest businesses can now afford computers or laptops, cellphones, fax machines, scanners and printers that produce very acceptable results. Some of this equipment was simply too expensive 10 years ago to feature in most offices.


Follow a system

But the speed of change also means that anything you buy is soon outdated. So the worry is always if you're buying the right equipment or the appropriate model. This guide aims to make your decision more logical and rational.

Equipment should be need driven

Start with this simple principle: any technology you buy should be driven by your business and marketing plans, not by a desire to acquire the latest 'bells and whistles' equipment or fancy gear to make your offices look good. It should fulfil a need, not a want. There is market pressure out there to convince you that you need the latest model. Often you don't, and the money could be more profitably invested elsewhere in your business. Think seriously about your real requirements first.

Require a cost/benefit analysis

Pressure can also come from your staff, who may regard high-tech equipment (such as the latest cellphones or laptops) as close to essential fashion accessories. One useful discipline to control this is to require anyone wanting new technology to submit a cost/benefit analysis. If they can't show how the equipment is going to produce significant benefits for the business, then it's a waste of resources. Often a simple dose of common sense is all that's needed.

Review technology needs regularly

At the same time you do need to ensure that the technological needs of your business are being met. Here are some core questions you should discuss with staff at least once a year when you review your business plan and goals:

  • Can you fulfil your business and marketing plans using current equipment, or is it outdated? For example, would it help if salespeople in different parts of the country could access documents remotely (such as updated marketing plans or price lists) through an extranet (business network that can be accessed remotely)?
  • Are you falling behind the competition and if so, what are the consequences likely to be? For example, the competition may have installed an on-line system so that customers can order spare parts 24 hours a day. Are you likely to lose business because of this? Do you need a website if you don't have one yet?
  • Would an investment in new equipment enable you to be more productive, work smarter and drive the business forward? If so, how exactly?
  • Are you making full use of e-business opportunities? For example, do you need a website to reach a far wider market?

If the meeting does identify the need for new equipment or software, appoint a person or small sub-committee to investigate options, prices, and complete a cost/benefit analysis.

Keeping up to date

Make the most technology conscious staff person responsible for tracking new technology developments through the Internet, magazines, industry journals, etc., and keeping a file of the results. Any discoveries should be circulated to everyone before the meeting.


Hidden costs of technology

There are usually some hidden costs in technology purchases. It is unusual for any system involving computers and their peripherals to work perfectly 'first time'. For example:

  • The equipment or software is not quite as 'intuitive' as advertised. It requires more installation time, troubleshooting and training than you had anticipated.
  • Productivity suffers in the short term while staff grapple with new systems.
  • You might need extra purchases that you hadn't anticipated. For example, a firewall system and virus protection against outside attacks or hackers, or special equipment for backups. Or consumables such as ink or laser toner cartridge replacements.

Thorough homework

Some careful research can prevent you from investing in technology that might waste time and money. It is all too easy to be caught up in visions of how new technology will transform your business. Reality can be somewhat different.

Be a follower, not a leader

In the case of technology it is often wiser not to be the first in the field. For example, new operating systems for PCs surface every few years. Rather than upgrading to these systems immediately they are publicised, it often pays to sit back for six months or a year and let others sort out the bugs and incompatibility problems first. The same applies to upgrades of any software you currently have installed. New software almost invariably comes with 'bugs' that need to be fixed. Always ask: "What will we really gain from this upgrade?" Check out the new features carefully and try to see through the marketing.

This principle of being a follower not a leader applies even more strongly to customised software packages. Many businesses persuaded that a customised software package is the answer to their special requirements have lived to regret the decision. It is all too easy for such projects to run over time and budget. If possible, buy tested off-the-shelf software or at least thoroughly check out the track record of any software developers who approach you. Approach a few of their previous customers to find out:

  • If the software has performed to expectations.
  • If it was developed and installed in time and within budget.
  • What level of support and training they received from the software developers.
  • What future developments (such as annual upgrades) are planned or included, and what extra costs that might involve.

Think of future needs

Try to anticipate future expansion and development when you buy both equipment and software. For example, buy modular software if possible so that you can add more modules later. Or, an accounting software package that allows you to purchase extra modules (such as a stock control module or a payroll function) is more practical than one that doesn't allow you to expand its functionality.


Use your contacts

Once you are interested in a particular item of equipment, use your network of business contacts to help you assess technology equipment. For example, if you're thinking about installing a photocopier, ask other business people what they use and how successful the purchase has been in terms of reliability and back-up service. Many people do not think of using this approach, but it can yield some very useful information that will help you narrow down your quest for the most suitable equipment.

Technicians and repair people

Technicians who service machines can be a valuable source of information. One business owner got valuable information about laser printers from a technician selling replacement ink and toner cartridges. As this technician worked with, and repaired, many different brands, he was able to give advice on which models he found to be the most robust and inexpensive to run. If you are getting advice from an expert, however, make sure the advice is impartial. If possible compare advice from several sources.


A basic small office equipment checklist

The 'package deal'

  • Many retailers or manufacturers offer computer packages attractively priced for the small office market. The package typically bundles a computer, mouse, printer and scanner or a multi-purpose printer/scanner/photocopier. To keep the price low, however, there are usually some limitations to the package. For example:
  • The deal may include an inkjet printer. These cost less than laser printers, but are more expensive to run. A laser printer is more practical and colour laser printers are becoming competitive with colour inkjet printers.
  • The computer itself is usually sold with the minimum memory (RAM) needed to function satisfactorily. Consider adding extra memory, as software is becoming increasingly memory hungry. It's cheaper and more convenient to have extra memory chips installed at the start than in the future. Check out the size of the hard drive too and consider an upgrade if you will use lots of space.
  • Here are some further pointers if you are considering a basic package for a small office:
  • Buy computers, laptops and peripherals (such as printers) from a reputable company that has been in existence for some time and offers a warranty and basic training (if needed). The initial price is less important than reliability and after sales service. Get references from business friends.
  • Make sure the computer offers the latest connectivity features (such as wireless and USB connections) so you can access the Internet, connect scanners, digital cameras, printers, cellphones, and portable computers or handheld devices in a convenient way.
  • Make sure that computers and printers can be networked without you having to buy extra networking cards. You may wish to establish an office network now or in the future.
  • It is usually cheaper and more convenient to buy any extra software you might need at the time of purchase. The dealer can install it and make sure it works properly.
  • Remember to increase your office equipment insurance to cover the replacement cost of the new equipment. If the equipment (such as laptops) is going to be used outside of the office, arrange cover for this as well.

Important: Home offices

If you operate from home, remember to check with your insurer or insurance broker regarding cover for your office equipment. In many instances, Home Contents insurance policies do not cover equipment used in a home office. You have to arrange separate business equipment insurance cover.

  • If you're offered guarantees or extended warranty, remember: you do have automatic rights under the Consumer Guarantees Act that override manufacturer's guarantees.
  • Try to make sure that any system you buy today will also cater for your needs in a few years time.


Lease or buy?

Should you lease or buy the equipment? The decision is often dictated by your cashflow and whether you can use the money more productively (such as growing your business through marketing promotions). An ANZ Business Specialist will be able to help provide funding options for those purchases that will minimise the effect on your cashflow.

To help you decide whether you should lease or buy, look at the related article Should I own or lease? which covers this topic in more detail.

Budget tip

If you prefer owning your assets, take the sting out of technology purchases and capital item replacements by starting a separate savings account and channelling funds into it at regular intervals. A savings account allows you to upgrade your equipment without impacting on your cashflow or increasing your borrowings.


Further information:

To talk to an ANZ Business Specialist:
Call 0800 269 249
Visit your nearest ANZ branch


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