As worldwide IT spending is expected to reach $5.24 trillion this year, the evolution of business technology continues to change and challenge how we conduct business. (Gartner, 2024).
New innovations are fueling improvements in efficiency, automation, connectivity, analytics, data storage, sharing, speed, and most importantly, financial savings. Yet, despite these advancements in technology, many businesses still use technology or solutions that do not leverage these benefits.
When employed properly, business technology that streamlines and improves visibility can help you operate more efficiently and experience tangible results across your entire organization. However, when you are using outdated technology or technology that is the wrong fit for your business and goals, it can have the opposite effect.
It goes from being a solid investment in growth to a sunk cost that cannot be recovered.
In this blog post, we will explore the side effects of outdated or ineffective technology and share some reasons why many companies continue to use the wrong technology for their business today.
What are the Side Effects of Outdated or Ineffective Technology?
Let’s start by defining what “wrong technology” really means.
At Tigunia, our team has extensive experience and knowledge across the entire business technology stack, from server infrastructure to business intelligence. When a business owner reaches out to us, they often carry a heavy load of technical burdens, frequently due to outdated or ineffective technology in use. When your current technology setup doesn’t align with your existing operations, it can lead to costly repercussions that disrupt productivity, infrastructure, processes, and service.
The problem is most businesses don’t always recognize the signs of potential sunk cost traps and technology failure until it has reached a breaking point. You can save a lot of time and money on technology by knowing the signs of ineffective or wrong technology. Signs like these:
- Sluggish Performance: When your technology doesn’t keep pace with your business needs, it can frustrate employees, delay customer service, and ultimately lead to missed opportunities and revenue.
- Regular Employee Complaints: Frequent grievances from employees regarding software crashes, hardware malfunctions, or system inefficiencies are a clear indicator that something isn’t working as it should.
- Time-Consuming Manual Processes: Reliance on manual processes in an age where automation can handle repetitive tasks is a sign of obsolete technology. Manual data entry, for example, is time-consuming, prone to errors, and incredibly inefficient.
- Disparate Systems: When different systems or software applications do not communicate or integrate well with each other, you’re left with siloed information, where departments operate with a partial view of the business, complicating collaboration, reporting, and decision-making.
- Rising Maintenance Costs: As technology ages, it often requires more attention and resources to maintain its operational status, leading to frequent repairs and rising costs.
- Extensive Downtime: When systems frequently go offline, or ‘downtime’ becomes a regular occurrence, it impacts your business’s ability to operate smoothly and affects your reputation with customers.
Why Do Companies Choose Wrong Technology?
Nobody sets out to choose the wrong technology.
Your company is full of intelligent, forward-thinking people acting in the best interest of your company. The decision to select ineffective technology and continue to use an outdated solution is often a by-product of the organizational structure and a lack of perceived value in technology upgrades. Here are some of the most common reasons for choosing the wrong technology:
- Reason 1: Decisions Based on Gut Instinct
When purchasing decisions are made in silos, rather than as a collaborative entity, they tend to be based on emotion rather than logic. Choosing technology because it is familiar from a previous job is an emotional decision. When you properly evaluate and vet technology for your business needs, it transforms into a logical decision – and results in a more successful approach. - Reason 2: Prioritizing Cost Over Requirements
Business technology, like ERP software, impacts an entire company—which doesn’t come cheap. The cost of evaluating solutions, implementing software, and training staff on a new system can be overwhelming and typically stretches budget limits. So often, businesses make do with what they have—even though it might be costing more in the long run. - Reason 3: Limited Bandwidth and Resources
Introducing new enterprise technology into an organization requires the time and skills of dedicated resources. The key to successful technology adoption is organizational alignment. A shared vision of your technology requires inputs from multiple departments across your organization and a dedicated team committed to achieving that vision. - Reason 4: Lack of Communication
Legacy systems typically last far beyond their expiration date because they are hard to replace. The individuals who originally evaluated and implemented the technology might be long gone, and now there is confusion and a lack of clarity around who is responsible for its upkeep.
The issue with selecting poor-fitting technology for your business stems from a natural human tendency to want to recover investments or get your money’s worth, often referred to as the “Sunk Cost Fallacy.” Many companies decide to stick with technology that doesn’t serve their needs in an attempt to recoup those initial costs. The reason this is a fallacy is that those costs have been already sunk and, no matter what, they cannot be recovered.
By understanding these common pitfalls and focusing on a strategic approach to technology selection, businesses can ensure that their IT investments are sound and truly beneficial for their growth and efficiency. Opting for the right technology solution is crucial, and it should be done with both foresight and insight into the total needs of your company.
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How to Justify Your Technology Investment
Overcoming the instinct to cling to the past—and its investments—is a bold step towards embracing a future where technology truly aligns with your business ambitions. It’s about making informed decisions that propel your company forward, ensuring every dollar spent on technology brings you closer to achieving your overarching business goals.
Here at Tigunia, we understand the unique challenges and opportunities that keeping up with technology brings. Our approach is rooted in partnership, where we believe in providing solutions perfectly tailored to fit your needs, avoiding one-size-fits-all fixes that overlook your company’s requirements and overall dynamics.
We pride ourselves on empowering our clients, enabling you to become self-sufficient through our comprehensive training and support, clear documentation, and collaborative team-building strategies. Our commitment to sharing knowledge ensures you are equipped to make the best technological decisions for your business, both now and in the future.
Choosing the right technology isn’t just an IT decision; it’s a business strategy that requires careful consideration and forward planning. Let us help you make that decision with confidence. Discover the “Tigunia Way“—a path that nearly 100% of our current customers have walked with satisfaction. It’s time to justify your technology investment with a partner who understands the stakes and is dedicated to guiding you every step of the way.