How do you know whether to buy the most expensive cutting edge technology… or, less expensive, slightly outdated technology? Do you have answer for your organization?
I just received a call from a friend in need of a significant technology upgrade for his business. Like a majority of people in his situation, he has made several calls and seen several vendor presentations… However, he has missed one critically important step… he doesn’t know where he should fall on the technology continuum or why? Translated, he doesn’t know if he needs to make technology a serious priority (priority = amount of money invested) at his organization or if there are other areas where money would be better spent.
If you are responsible for making technology investments for your firm, you must have a complete understanding on where your true priority is. There are three things that you need to think about to determine the level of priority that is placed on technology at your companty…
There are three things that can help you determine if you are a 1, 2, or 3 on the technology continuum.
- Your Customer’s Expectations
- Your Competitive Advantage
- Your Competition
Customer’s Expectations: Delivering on your customer’s expectations is critical to your long-term success or failure… Can you define what your customer’s expectations are in 15 words or less? Are you prioritizing your technology investments around your customer’s expectations?
If you are a small bakery, your customers might expect your bread to be deliciously amazing every time they take a bite. To deliver on that expectation you will make a level 3 investment in your cooking technology and ingredients before you will in a highly sophisticated Customer Relationship Management solution. If you sale disgusting bread, no CRM system in the world is going to save you…
On the other hand, if you are a hospital, your customer’s expectation is to get well soon… A critical piece of that equation is the communication infrastructure that makes it possible for nurses, doctors, and technicians to collaborate and communicate and solve patient problems. Meeting those customer expectations could require a technology investment that needs level 3 commitment.
I’m going to ask… Are you matching your customer’s expectations to your area of technology priority?
Your Competitive Advantage: The level of technology investments that you make should directly align with your competitive advantage.
If your competitive advantage is being the lowest cost provider in your field, then making a level 3 investment in technology that does not help you maintain your low cost market leadership will undermine your competitive advantage.
You might ask, well Walmart has a technology infrastructure that rivals most governments AND they also boast the lowest price? What’s going on? For Walmart, the key is investing in technologies that lower the cost to bring merchandise to market. That involves having one of the most sophisticated distribution technology infrastructures on the planet. At Walmart, anything that doesn’t lower the cost to their customer’s gets a level 1 investment.
So, at your business, it’s critically important to align technology investments with your competitive advantage.
Your Competition: If you have already aligned technology investments with your customer’s expectations and your competitive advantage, you are ahead of most. The key is keeping your eye on the technology horizon for disruptive technologies that could either:
1) Transform your customer’s experience (even if your customers don’t know what that is yet)
2) Overturn your industry.
To be ready, you have to continuously innovative and seek out technology innovations that solve your customers problems AND align with your competitive advantage.
So, are you a 1,2, or 3?































