Balancing Technology Innovation and Optimization
As your business scales, you’re bound to run into obstacles. You might find that increased lead volume overwhelms your CRM software or that your sales team needs more advanced and complex segmentation and reporting. If your business ships physical units, you’ll encounter problems of scale when it comes to storage and logistics. You might need to contend with new tiers of service from your insurance provider or payroll management.
As these obstacles arise, you’ll be faced with a choice when it comes to your technology: innovation or optimization. So how do you assess which approach to pursue?
Deciding Between Innovation and Optimization
The decision between innovation and optimization can be addressed by answering two questions: can you use the technology you already have in a more efficient and effective way? Or do you need to start enlisting new technology to keep up with the demands of your growing company?
Optimizing technology simply means taking a close look at the capabilities of your current tech stack and determining whether there’s room for improvement. Innovation means employing a new solution entirely. To make the decision, you should perform an information technology audit to determine how much room there is to grow.
For example, imagine that your company works with a lot of digital content and needs to store it. When you started out, a simple Dropbox account was good enough to host all the data you need, but now the account is full and asset management is cumbersome. You have the option to optimize or innovate.
Optimizing may involve an upgraded Dropbox account, deleting old files to make space, or even enhancing internet connections to upload and download faster. Innovating would mean taking an entirely different approach, like contracting with a digital asset management platform or building your own on-site server rack and setting up a local area network. The latter option is likely more expensive in the short term, but saves money in the long term and offers significant performance improvements.
These decisions recur a thousand times over in the life of an organization, and each decision will require a detailed analysis of your business’ needs and capabilities.
Examples of Business Optimization
There are a number of methods by which companies can become more efficient as they scale up, each of which can be approached by either optimizing the technologies you already have or pursuing more innovative strategies:
- Processes: if turnaround time on orders is starting to increase as volume scales, a business might optimize by reorganizing their warehouses to put items that are commonly ordered together near each other.
- Automation: some organizations spend dozens of hours a week generating reports and tabulating data on employee hours, billing, or website stats. Innovating by adopting new technology that can generate reports and analyze data will increase your capacity for a far higher customer volume.
- Quality Control: a consistent bug or fault in your product occupies your service department’s time and costs you revenue. You might be able to solve the problem quickly by finding and fixing the root cause, or you might have to reimagine the production process entirely.
- Marketing: businesses optimize their marketing efforts by iterating and testing their plans, then putting more money into the most successful channels. Innovation, on the other hand, might involve seeking out an entirely new audience or establishing a presence on a new channel.
- Contact Relationship Management: keeping sales, marketing, and service departments aligned and customer touch-points consistent may require optimization via workflows in existing platforms, but it may also be time to explore technical integrations of those systems or an entirely new architecture.
Deciding whether to innovate or optimize will have to be done on a case-by-case basis. Every company is different, and their needs and priorities are equally unique.
Making the Right Technology Decisions
Navigating the increasingly complicated world of business technology isn’t easy — and delays in taking action only compound the number and significance of decisions to be made. Making the right decisions regarding the use of existing resources to their full potential, or replacing those resources with new innovative solutions, requires both awareness and expertise. Start by assessing your needs, priorities, and budget to determine whether optimizing your current tech stack or building a new one that will encourage business goal attainment more effectively, is the right move.
It is rare that any single organization, no matter the size, is in a position to evaluate both the internal issues and the potential optimizations or innovations. This is why a professional opinion is invaluable. Whether your plan is to execute initiatives entirely in-house or outsource efforts fully, seeking experienced guidance will often result in idea generation the organization could not have produced on its own, helping ensure you’re making the right technology decisions the first time.
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