The unfortunate reality of the digital revolution is that technology becomes obsolete almost as fast as it updates, and that old technology can cost your business a lot of money in lost productivity – sometimes more than an investment in new systems. While businesses can survive on old technology, recognising when it’s starting to damage your bottom line is crucial to avoiding stagnation and starting an upgrade. So, just how much is your old technology costing you?
Calculating the Cost
Staff productivity helps drive revenue growth and old technology can impede your employees’ workflow. This translates into lost revenue for the business and potentially increased administration expense. Technology that is costing your business, however, can be easily identified because it presents clear symptoms that something is wrong.
In fact, the more frequent and severe the symptoms, then generally the more expensive it is your business. These symptoms include:
- More IT requests and/or employees complaining about tech: If more people are having trouble with the system, or they don’t know how to avoid/fix problems themselves, then they are less productive because of the downtime. The longer this goes on, the less productive your staff are
- Security breaches: Anytime your systems are compromised, it’s a clear sign they’re out of date. If security can’t prevent an attack, then why would clients entrust their data with you when you can’t ensure its protection?
- Hardware and software more than five years old: Did you know Kodak invented the first digital camera in 1975, but refused to push it to market for fear of cannibalising their lucrative photo printing business? Failure to recognise and adapt to disruption can significantly hurt your business. Don’t get left behind
If you are ready to update your technology systems keep in mind that certain costs can be tax deductible. Read more about IT and tax: IT Costs: What Can You Deduct and When?
Beware When Updating Your Systems
Companies can upgrade to a plethora of technology options – cloud, mobile devices, BYOD – but any overhaul can have many hidden costs if you aren’t prepared. Migrating and installing new technology, for example, can result in massive productivity loss if you don’t educate your business about the changeover and retirement of old technology, as well as spending time championing the new systems. Further, if employees don’t culturally integrate with the new technology, they’ll reject working with the system and waste more time and money.
Overhauling technology can be vital to your businesses success, despite the cost. Putting off an update can be more expensive than fronting up the cash today.
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.