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Why Your Business Needs Technology To Compete

Businesses today simply struggle to survive unless they make the most of the advances in technology made available to them, and computers and information systems have become essential aspects of running a business of any size. To ensure that your business is competitive, the bottom line is that you need to be using technology.

Technology may cost your company more initially, but you’ll soon begin to reap the rewards:

What are the benefits of technology for businesses?

  • Your customer base can be extended greatly with technology, enabling you to reach a wider audience and work on developing new and lasting relationships with potential customers.

  • Your operational costs can be streamlined and even reduced with the use of technology. Waste can be minimized, profits can be maximized and your business can perform more efficiently.

  • Overall, you should be able to give your customers a better service, enable them to give you important and useful feedback to guide your business in the future, and help nurture and support better relationships with partners.

How much should a business spend on technology?

Businesses which aren’t operating within the technology industry, generally spend between ½ percent and 10 percent of their annual income on technology, and that figure will depend greatly on the type of industry they’re involved in. Industries such as manufacturing and retail, tend to be at the lower end of the scale, while those industries like healthcare and finance, are generally at the higher end of the scale.

Of course, what your business spends on technology will be entirely dependent on your budget, and how important you consider the advances in technology to be to your company.

How to break down technology costs for your business:

There are several categories to be considered when thinking about the costs involved with technology for your business, and these include:

  • Start-up costs

The initial costs to be considered are those associated with hardware, software and staff training to use the new technology

  • Ongoing costs

New technology systems must be maintained and there will be the ongoing cost of software licenses, hosting and tech support

  • Upgrade expenditures

All technology systems need to be upgraded, and the costs will depend on how often this needs to happen

  • Evaluating the cost compared to the benefits

Many tech systems will save you time and money, but just how much will depend on what system you have, and how much new business it can generate. You will also need to calculate the potential for lost revenue if you choose not to implement a new technological system.

Where should your technology budget be spent?

Again, a lot will depend on the industry that your business operates within, but in general, most businesses will allocate around 50% of their tech budget to infrastructure, including computers, equipment for networking and Internet Service Providers, or ISP’s.

When should you think about implementing new technology?

Not spending more than is feasible for your business on new technology, is naturally important, but at the same time, you need to implement enough to be able to see the benefits and ensure that you don’t miss out on opportunities.

How do you go about choosing the right technology for your business?

Seeking professional help to guide you through the process of implementing new technology, may be the simplest and most cost-effective way of doing it. They will be able to advise you as to what free software you can take advantage of, whether to use a hosted system and help you make many other informed decisions.

Staying ahead of your cashflow and keeping on top of payroll are major distractions for most businesses, but not keeping up with technology and thinking about it in a strategic way, could see your business plan quickly begin to fail.

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