By Tim Berry, Founder & Chairman, Palo Alto Software Inc.
As technology changes, so does the range of decisions business owners have to make. In the 1980s the main decision was which personal computers to purchase and how often to upgrade. In the 1990s, it was about how much bandwidth to buy.
Today, a dizzying array of business technology decisions include the cost of computing, bandwidth and mobile devices compared to the benefits of productivity, connectivity and faster flow of information. Do you standardize? Do you pay for phones, laptops and tablets? How much bandwidth is efficient? Do you let your employees use their own devices? If so, do you reimburse them for costs?
One way to deal with this potentially complex set of business decisions is to take a step backward, avoid the impulse buy and what's cool or not and put it into business numbers. You can do this by looking for costs and benefits you can quantify.
1. Start with real costs.
Technology costs include the obvious price of a product plus support, which are easy to calculate. But you may want to consider adding in an allowance for breakage and replacement. You can use unit costs and multiply for units in the organization.
Try to include time calculations as well. For example, if training is required, you can estimate average training time per employee and multiply for the organization. If one piece of technology requires shifting data from one platform to another, there's waiting time per employee. If one device or platform is harder to deal with than another, then there’s fussing time, on average, per employee.
And I would also advise including the cost of distractions. Some technologies lend themselves to distractions in the workplace, such as watching sports events, personal browsing, shopping and social media. You can estimate hours lost in distraction and calculate what an employee costs you per hour.
2. Add in the benefits.
Technology is a productivity tool; it can help get things done faster and better. We've seen for decades how spreadsheets, word processing and email offer intuitive gains to overall productivity. And when mobile phones were first introduced, they were an obvious boon to productivity gained by connecting people to and from the workplace easier and faster than ever before.
A potential benefit you can estimate is time saved, per employee, with the right technology. As you look at technology platforms available in the workplace today, you may take most of the available productivity for granted. But consider looking for additional time gained with the new technology you are considering.
Faster bandwidth, faster computing and better apps can help save employee time. And time is money. In a 500-employee business whose employees cost an average of $50 per hour, saving the average employee 2 minutes per hour can save the business more than $1.7 million per year.
Also, devices and connectivity can add extra productivity in the off hours. Paying for laptop and mobile connectivity might mean your employee will see that urgent email after dinner. To give that benefit a dollar equivalence, try to estimate on a per-employee basis. Make reasonable assumptions about averages.
I would advise against expecting exact numbers: Make assumptions and estimate.
3. Consider intangibles.
Technology can have an impact on your culture and employee satisfaction. These intangibles also matter. Although you may want the numbers first, try not to over-simplify so much that you ignore some less quantifiable factors.
Take liability as an example. Is your business more likely to be liable for damage caused by distracted drivers using company-issued smartphones? What about liability for inappropriate social media behaviors using company devices? Can an explicit employee policy help reduce the risk? You may want to consider getting legal help with some of these less quantifiable issues.
4. Review and revise regularly.
Technology is constantly changing. So too are workplace trends and fashions. Consider building technology reviews into your regular management practice. Check back on what’s working and what isn’t, and revise as necessary.