It can be difficult for the CFO of small- and medium-sized business to know exactly how much should be invested in technology. With such a wide array of technological products and services available, which are actually worth the investment?
In this article, we’ll outline a number of effective technology investment strategies to help CFOs navigate the tech-heavy modern business environment.
Align technology investment with your goals and business strategy
The first thing a CFO should do when considering the scope of their technology investment is to sit down with the CEO and CTO to discuss key business goals, strategy and where the business is going. Technology can be an expensive mistake if the investment and purchases do not support business objectives. Once you have a solid idea of where the business should be in the next five to 10 years, then it will be far easier to decide on the technological tools and infrastructure needed to get there.
For example, if a primary business goal is growth and expansion into new markets, then the technology investment should reflect this with scalable solutions like cloud services and IT outsourcing. This alignment will also foster communication and cohesion across departments and traditionally siloed areas of the business.
Identify technology solutions that speak to business needs
The wrong technology investment can spell disaster for many small and growing businesses because they can’t afford to cycle through options until they find the right technological solution for their unique business needs and situation. Simply opting for cutting edge technology that’s plugged as the latest and the greatest can seriously dent your bottom line if it doesn’t address your business’s specific strategic hurdles.
To overcome this problem, it’s worth engaging with a technology partner like PowerNET who has this knowledge already, so that they can report on the potential best-fit for the company. It’s also worth keeping an eye on technology investments made by key competitors that could add value to your own product or service offering.
Some of the best technology investments for small to medium-sized businesses include cloud services, data warehousing and network management systems.
Establish realistic budgetary expectations
Each of these investment strategies relates to the intelligent allocation of funds, which is crucial for long-term survival of the business. Work closely with the staff member mentioned in the previous section – as well as any other IT experts who know your business and industry – to formulate a realistic budget for the initial investment and for ongoing maintenance costs. Investing in the guidance of an IT consultant can save the business a considerable amount if it helps avoid wasteful technology expenditure.
In addition to planning for expected setup and maintenance costs, CFOs should determine how long it would take for any given technology investment to demonstrate ROI or add sufficient value to business processes.
How confident are you in your company’s technology investments? If you’d like a professional opinion on your IT tools and infrastructure, take our commitment-free IT health check.