When is the Right Time to Purchase and Implement New Technology?
Daniel Levison | July 29, 2020
There comes a time when your commercial real estate business needs to upgrade its technology. Holding out for as long as possible might seem beneficial for your bottom line, but in the end, it’s much more cost-effective to replace outdated and inefficient technology before it winds up becoming a real liability. Deciding if and when to adopt new technologies can be a daunting and difficult decision.
Knowing the right time and approach to onboard new technology platforms can vary depending on your business and industry. For example, if you are in a cyclical business conventional wisdom suggests beginning the implementation process during one of the slower periods of the year. However if your business isn’t cyclical in nature and particularly if the technology involves back office automation or moving to a new financial platform implementing new technology at the beginning of a new quarter or year provides benchmarks for historical data comparison.
Other consultants suggest trying to time technology adoption for your business is like trying to time the stock market.They suggest determining whether the particular sector of your business needs innovation and if it does start taking the necessary steps to move forward.
Conduct an analysis of potential options and platforms. Include key leadership and back office personnel in the initial product review. The goal is to address what challenges and hurdles your team currently encounters and how the company’s current technologies cause bottlenecks to productivity. Clear and concise communication is paramount to success. Communicating the benefits to the organization and key individuals involved, and making sure to tie the new technology benefits to specific pain points of those key individuals whose buy-in you need is crucial to a successful adoption.
A Harvard study on implementing technology agrees that involving key stakeholders is critically important to overall success. Generating buzz around the initiative, involving key team members and identifying champions in the front and back office can greatly enhance successful adoption. Involvement creates pride, accountability, and enthusiasm. Principals should celebrate ambassadors and champions as early adopters. Champions can often educate and nurture colleagues into successful acceptance and implementation. Setting realistic expectations on timing of the implementation and training sets the organization up for success. Many implementations fail because the scope of the project was underestimated. Additionally many of today’s cloud based technologies do not lend themselves to justification in traditional ROI terms, yet they may be essential to a company’s productivity.
Many companies are beginning to realize the limitations of traditional capital budgeting models in analyzing technology investments, particularly in their back offices. Companies are beginning to analyze technology with a focus on human factors, such as, job happiness. This approach is supported by a recent article discussing top concerns for CEO’s in 2020 stating that one of CEO’s top concerns and priorities for 2020 is attracting and retaining top talent. Another key to a successful technology implementation is understanding and acknowledging resistance which allows leadership to be proactive in dealing with negative pushback from assassins and hedgers. Those who oppose new technologies typically do so out of fear or concern over loss of ability to perform their jobs with their current skill set, loss of power within the organization or absence of a true understanding of the personal benefits of the new technology.
In many cases, businesses might not even realize how much their outdated technology is hurting their bottom line. How can you know with certainty that it’s time to upgrade your technology? With technology moving at such a rapid pace your technology stack has to be continuously evaluated, and just like a computer if it’s more than five years old it is likely outdated and needs updating.
Authors: Daniel Levison – CRE Holdings (CommissionTrac, Commercial Property Consultants, Sharedspace) and Turner Levison, CEO, CommissionTrac