A former colleague of mine once observed that most businesses could be divided into three broad categories, based on how they view their computer systems. Which category do you fall into?
1. A Necessary Evil
Some businesses really don’t need much technology to do what they do. For example, a small automotive machine shop may have one PC that they use to run a simple accounting program to keep their books and not much else. They may not even have an Internet connection at their place of business. Computer technology is not in the least strategic to what they do, and they’d rather not deal with it any more than is absolutely necessary. They’ll typically run the systems they have until they’re forced to upgrade.
2. Another Business Tool
Other businesses understand the need for technology, but do not view it as strategic. It’s just another business tool, like the telephone system. They don’t spend much time thinking about it, but they do expect it to work when they turn it on – just as they expect a dial tone when they pick up a telephone. They recognize that their computer systems provide essential business services – not just running the accounting system, but enabling their employees to keep in touch with clients and vendors, perform essential research on the Internet (when they’re not watching YouTube videos or updating their Facebook pages), create presentations, write letters, create budget and forecast spreadsheets, etc. Still, they don’t particularly want or need to be on the “bleeding edge” of the latest and greatest stuff – they just want the stuff they have to work, because they know it costs them money when it doesn’t. They don’t want to spend any more money than they have to, but they recognize that they have to spend some money to keep things working. They are reluctant to upgrade their systems as long as the systems they have are getting the job done.
3. A Strategic Asset
Businesses in this final category truly view technology as strategic to their businesses. They proactively look for ways to leverage technology to give their businesses a competitive advantage. Ultimately, all businesses exist to make money. You make more money by either selling more of whatever products and services you sell, or by taking cost out of the business so that your present level of sales becomes more profitable. Technology can be used to do both of these things, and in a variety of ways. In fact, that may be a good subject for a future series of posts – but in the meantime, if you give the matter a little thought, you can probably come up with several examples yourself of how to use technology to increase sales or reduce costs, or both.
One of the interesting things about this classification system is that it has very little to do with the size of the business in question, and everything to do with how the business views technology. I have known relatively small businesses who fell into category #3, and relatively large businesses who fell into category #2. (I haven’t dealt with very many category #1 businesses, and, frankly, if you’re reading this blog, it’s a pretty strong indication that you’re not a category #1 business.)
It is, of course, important to be clear about which category you fall into, because it determines, to a large extent, what kind of conversation you need to have with your technology services provider(s). If you’re in category #2, you should be talking about increased productivity, simplified management, the cost savings of virtualization, and perhaps even the outsourcing of some or all of the management of your systems. If you’re in category #3, you should also be talking specifically about how you go to market, how you differentiate yourself from your competitors, and how you can use technology to create or enhance that competitive edge.
But it’s equally important that you are comfortable with category you fall into. The fact is that a category #3 business is going to spend more (relative to the size of the business) on technology than a category #2 business. If you claim to be in category #3, but you’re behaving like you’re in category #2, you’re simply fooling yourself, and you need to be realistic about your goals and objectives. If you want to be in category #3, but are hindered by budgetary constraints, then you can begin to plan for how you’re going to get there. If you’re in category #2, and you’re content to be in category #2, great! There’s absolutely nothing wrong with taking that position, as long as it’s a conscious decision made with a clear understanding of what it means for your business.
So… what category are you in? And are you comfortable there?