Ten Questions to Ask Before Making a Tech Investment

You don’t have a lot of technology resources inside your company. In fact, just getting your office printer to work all the time seems like a monumental challenge. Investing in technology, whether it’s new software or hardware, means dealing with a lot of stuff that just may not work like you expected.

However, it’s the 21st century and the days of index cards, one-write systems and two-martini lunches are long gone. You need technology to get things done. So, before investing in the latest-and-greatest-whiz-bang-gotta-have gadget that promises to turn your entire business into a financial powerhouse, here’s a few things to keep in mind.

1. Who makes it?If your business is going to significantly rely on a new inventory management system, then you better find out everything you can about who made the system.

Where are they located? How long have they been around? Are they financially strong? Will they be around next year?

Great technology has great companies behind it. You’re going to find yourself with a new partner, and — like any new partner — you’ll want to make sure to do as much research about them as possible.

2. Who supports it?You know by now that something will go wrong. Something that worked fine yesterday will, for no reason at all, stop working today — right in the middle of trying to get something out the door too.

Who will you call? The vendor? A partner? Ghostbusters? Make sure you know who’s going to help you with all the inevitable problems before they occur. Find out how quickly they provide their service. Even if they promise a “24/7 response,” give them a buzz at 7 p.m. one evening before you buy just to see if anyone answers the phone. All technology needs support. This stuff just doesn’t work all the time.

3. What are all the costs?That new order entry application may only cost a few thousand dollars. However, what about the annual maintenance and support? How about training, customization, technical questions and installation?

Don’t be surprised if all of this stuff is extra. Get all the costs upfront, including what you’ll be required to spend on an annual basis.

4. What other technology is required to make it work?If you’re buying software, what hardware is required? If you’re buying hardware, what software is required?

Microsoft’s new customer relationship management software application requires so much additional Microsoft software (i.e. Windows, SQL Server, etc.) that you may spend more on the additional software then the actual product. Know it all before you buy.

5. What services are required to make it work?Wouldn’t it be great to just plug it in a like a TV? Or click on setup.exe and everything installs itself? Dream on. How else can technology consultants like ourselves justify our existence without convoluted and overly complex tools that requires black-box knowledge and other specialized expertise that only a “certified partner” can bring?

Find out how much time will be needed by outsiders to get your application or equipment running the right way. Sure, you can do it yourself. However, you still haven’t finished painting the kids playroom yet — so how are you going to finish this?

6. How long has it been around?You want something on the leading edge, not the bleeding edge. You definitely don’t want to buy a first release of anything. Let some other poor guy discover those hidden bugs.

Windows Vista? Wait for the first service pack. That new line of laptops from Dell? Hang back a while. In technology, new and reliable are rarely used in the same sentence.

7. Who else is using it?Never buy technology in a vacuum. Get references. Do site visits. Call other users. Check newsgroups and forums. Google the vendor.

Buying a new service management system? Consider going to the vendors’ offices for training before you buy. That way you can beat up on the instructor and talk to other users. Does the vendor host conferences or shows? Visit, ask questions, get comfortable.

8. How will it generate profits for my company?If a piece of technology isn’t going to help you increase revenues or decrease costs then why bother? Your current system may not be pretty, but if it ain’t broke why fix it?

Buying software or hardware should be a quantitative decision. You should be able to mathematically calculate how much estimated profits will result, with certain assumptions, from this investment. Do the ROI (return on investment) research and see what shakes out.

9. Can I take a test drive?Never buy just on a vendor demo. Get the software or hardware and test it yourself. If a software company doesn’t let you drive their product, then don’t buy it. If a hardware company can’t give you a test piece, then reconsider.

Once you make that decision and fork over the cash those eager and super-friendly salespeople will be on to the next deal and you’ll be yesterday’s news. Do your due diligence beforehand.

10. Will it speak to my other systems?Are you adding another repository of duplicate data? Are you creating additional tasks? When buying new technology make sure it’s open to others. Proprietary systems are becoming more and more a thing of the past.

Make sure that you can tie it to other systems. Even if there’s no out of the box connection you want to still have the option of hiring someone to write the integration. Keep those options open so you don’t paint yourself into a corner.

Gene Marks is a certified public accountant and owner of the Marks Group, a customer relationship and financial management consulting firm.

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