Technology: Asset or Liability?
Technology...can you imagine your day without it? Twenty years ago, many in the working world felt that they had little or no use for technology. Many didn’t want it in their business and felt that it was a waste of money and time. That attitude changed drastically in the late 1990s.
With the new millennia, technology had almost come to be regarded as a savior to businesses. Companies raced to invest in all types of tech solutions, often times without comprehending the real impact to their organization. Then came the Dot Com bust. What happened? Why so many failures? Was it just a recession, or had there been an over-investment in technology? Was the technology itself a bad investment?
Consider a small company started in 1998 which “gave away” free access to the best search engine on the planet. An application of technology so valuable that this enterprise is now trading for over $450 a share and rivaling Microsoft in many of their competing markets. How many people today haven’t used Google? The company name has become a verb, making it into the dictionary with the meaning “to search the Internet.”
What about wireless technology providers? Who doesn’t have a cell phone? Many people are providing cell phones to all family members and removing their traditional home land-line. Reports show that U.S. land lines are being removed at a rate of 150,000 per day. That is a staggering number. All being replaced by newer wireless technologies.
These examples show the power of technology to affect change on our lives, our world and our businesses. Technology has made our world a much smaller place populated with more choices and options where companies can be made almost overnight. Where work is no longer the place we go, but is truly just an action we perform, leaving many the option of when, where and how they are to work. With change, new challenges have also been created. Leaving many with questions such as: Who are the employees and customers of tomorrow? Who is competing for them?
Competition is no longer just around the block, it can be on the other side of the world.
With change, inevitably one may ask if technology is an asset or liability to our business. Many people wonder how something that is out-of-date the moment it is purchased can be an asset. Accountants and CFOs may find it hard to depreciate a purchase over five to eight years when its useful life can be much less. Business owners have faced countless failures and many hidden costs on new technology implementations. Purchasing agents are finding that vital pieces of the projects are left out or completely undefined. All resulting in higher costs, inadequate deployments and unsatisfied owners and employees. None of this sounds like it could be an asset, and I would agree. I would go so far as to say that no technology by itself can really be called an asset. (You can quote me to everyone but the IRS!)
Technology must be seen as a tool and is only really an asset when implemented and used properly. When the right tool is applied to its full potential it can even become a powerful enabler of business growth and increased profitability. However, we often get so caught up in the technology itself that we fail to remember why we started looking at it in the first place. We fail to perform due diligence in critical areas such as business drivers and priorities, the customers’ experience, the implementation and training processes and our employee’s learning curve. Other issues such as the probability for obsolescence, ongoing support, upgrades, expansion and training costs are also forgotten. All of these issues can turn a technology project into a real “liability.”
What can we do? Simply ignore technology? No. Ignoring it would mean that our own businesses would soon become obsolete. With competition and change, even more diligence and care must be taken in deploying business technologies. We will need to further develop our understanding of the technology tools and make sure we have trusted partners that we hold accountable when making these decisions. We are going to need to make technology an integral part of out business planning just like Accounting, Sales and Marketing, Operations and HR. The process has to be an integration which considers all of the costs, requirements and effects. It is the only way we can assure our technology investment becomes a true “asset” to our business. IBI
With the new millennia, technology had almost come to be regarded as a savior to businesses. Companies raced to invest in all types of tech solutions, often times without comprehending the real impact to their organization. Then came the Dot Com bust. What happened? Why so many failures? Was it just a recession, or had there been an over-investment in technology? Was the technology itself a bad investment?
Consider a small company started in 1998 which “gave away” free access to the best search engine on the planet. An application of technology so valuable that this enterprise is now trading for over $450 a share and rivaling Microsoft in many of their competing markets. How many people today haven’t used Google? The company name has become a verb, making it into the dictionary with the meaning “to search the Internet.”
What about wireless technology providers? Who doesn’t have a cell phone? Many people are providing cell phones to all family members and removing their traditional home land-line. Reports show that U.S. land lines are being removed at a rate of 150,000 per day. That is a staggering number. All being replaced by newer wireless technologies.
These examples show the power of technology to affect change on our lives, our world and our businesses. Technology has made our world a much smaller place populated with more choices and options where companies can be made almost overnight. Where work is no longer the place we go, but is truly just an action we perform, leaving many the option of when, where and how they are to work. With change, new challenges have also been created. Leaving many with questions such as: Who are the employees and customers of tomorrow? Who is competing for them?
Competition is no longer just around the block, it can be on the other side of the world.
With change, inevitably one may ask if technology is an asset or liability to our business. Many people wonder how something that is out-of-date the moment it is purchased can be an asset. Accountants and CFOs may find it hard to depreciate a purchase over five to eight years when its useful life can be much less. Business owners have faced countless failures and many hidden costs on new technology implementations. Purchasing agents are finding that vital pieces of the projects are left out or completely undefined. All resulting in higher costs, inadequate deployments and unsatisfied owners and employees. None of this sounds like it could be an asset, and I would agree. I would go so far as to say that no technology by itself can really be called an asset. (You can quote me to everyone but the IRS!)
Technology must be seen as a tool and is only really an asset when implemented and used properly. When the right tool is applied to its full potential it can even become a powerful enabler of business growth and increased profitability. However, we often get so caught up in the technology itself that we fail to remember why we started looking at it in the first place. We fail to perform due diligence in critical areas such as business drivers and priorities, the customers’ experience, the implementation and training processes and our employee’s learning curve. Other issues such as the probability for obsolescence, ongoing support, upgrades, expansion and training costs are also forgotten. All of these issues can turn a technology project into a real “liability.”
What can we do? Simply ignore technology? No. Ignoring it would mean that our own businesses would soon become obsolete. With competition and change, even more diligence and care must be taken in deploying business technologies. We will need to further develop our understanding of the technology tools and make sure we have trusted partners that we hold accountable when making these decisions. We are going to need to make technology an integral part of out business planning just like Accounting, Sales and Marketing, Operations and HR. The process has to be an integration which considers all of the costs, requirements and effects. It is the only way we can assure our technology investment becomes a true “asset” to our business. IBI
