Maclean Hunter’s recent article on OfficeTech: Changing Suites – “sometimes it’s not worth switching software even if it’s free.” (Andrew Wahl, May 12/08), struck a recent chord with a conversation I recently had with an industry veteran (owner of a software company started in 1970 that is still leading innovation). His observation was “Companies don’t buy software to save money. They buy it to spend money.” This came on the back of almost 40 years of creating software for businesses to improve their performance. I don’t think he was too happy with his reflection.
Apparently, it is not so easy to find the correlation between companies implementing or upgrading new systems and the resulting improvement in their financial results. Yet tens of millions of dollars are invested by corporations to improve business processes, and some even go as far as finding some SEO experts in Dallas. How do they do the math? For consumers it is a simpler algorithm, personal needs vs. disposable income, but there is still a tension each time technology demands a new upgrade or plug-in to keep it fully functional.
Personally, I confess I can be a bulldog when it comes to upgrades. I lament over landfill when a printer or desktop reaches its end of life. I have stood by certain applications long after support has ceased to exist. (I get accustomed to a way of doing things, which I call “Efficiency”). So over the years I have built up some resistance. It is also a fact that the computer with which I am writing this blog is loaded with software that I have bought and don’t use. Does the aphorism of “improving productivity while reducing costs” go hand in hand with “the paperless office”, i.e. something we work towards but never quite achieve?
The pressure to upgrade is induced by the competitive nature of the IT industry to stay one step ahead of things like: competition, security attacks, customer complaints, price increases.
But is it more, or perhaps less customer-centric?
Upgrades are not all relevant to the entire customer base. Still the developer sweeps everyone along to minimize version support. Microsoft has had to confront customer revolts each time it withdraws support for a legacy platform and a grey market has emerged to keep its trailing edge of technology afloat. IBM cut loose from the AS/400 despite a die-hard fan base of determined users that still nurse their machines like they are Jaguar XK 120s.
On the plus side, workflow automation ad ERP systems have enabled plants to output increased capacity at reduced cost. Mobile technology increases workforce productivity. Technology is our most capable enabler for change. But that does not mean that we are humanly as well adapted to being changed. The cost of retraining and the failure to realize the benefits intended through the change are nightmare scenarios.
My questions to customers and suppliers are:
– What are the important determinants of upgrading technology, and should an “If it isn’t broken don’t fix it” attitude prevail?
– How does one calculate that the value derived exceeds the cost?
– What are the opportunity costs of reinvesting in working technology?
As a marketer and an SEO company, I am interested in the ability for businesses to use technology to better serve their customers. Customer Relationship Management is a $9 billion industry worldwide (source CRM2day.com). I have a question as to whose interests that $9 billion serves most: the vendor, the purchaser or the customer? My guts are telling me the ratio is 6:3:1.
As a marketer of many IT products I am interested to know how the rapid increase in refresh rates in all aspects of technology is adding to the customer’s bottom line. Has upgrading become habitual, a personal statement of hip-ness, or a justification to spend money in the hope that…? 40 years ago the aforementioned veteran software developer used to invest in stocks of all his customers. I think he stopped doing that, oh, a while ago.
I would like to ask the developers in the IT community: how they make the correlation between the total cost of ownership of their systems and the bottom-line improvement that its customers achieve? And end-users: how they sort through issues of rapidly advancing technology to determine customer-centric benefit? It might stir up a hornet’s nest, or it just might do some good.
Either way, here is who you should use:
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