Businesses, regardless of size, rely on technology for day-to-day operations. Looking back, the expenditure of business capital on information technology (IT) was once the subject of big debate. As early as the 1990s, IT investment had reached 50 percent of capital expenditures. With such a huge slice of business budgets, it was a difficult task to convince executives that it was a necessary expenditure, especially in regards to measuring its return on investment.
A technology investment has both tangible and intangible benefits. Tangible benefits can be measured by revenue generated as a result of the technology investment. The intangible benefits, on the other hand, can not be measured in terms of numbers but IT helps a business to achieve its goals, which may include gaining a competitive edge, increasing customer satisfaction, and improving operational efficiency.
Many businesses now realize the role of IT in improving communication, saving time and money, keeping records, managing inventory, reaching global markets, and enhancing efficiency for daily operations. This has provided a better approach to help businesses carry out their daily work faster as well as more efficiently and conveniently. Technology also provides an opportunity for businesses to sustain themselves through innovation.
Although businesses have come to accept IT spending, they also have to deal with the challenge of ever-changing technology trends. A business owner is faced with the decision of making new investments every so often. However, it’s not always practical to change existing technology just to keep up with the trends.
It is important for a business to first understand its unique business needs and map out all of its processes and the technology that can facilitate those processes. This will help in making the right IT investment decision. Business owners need to be aware that IT investments also come with hidden costs that may result in business spending beyond budgeted figures or abandoning an ongoing project due to high costs.
As technology advances, IT spending has also changed. For instance, with the introduction of cloud-based services, a business does not have to incur the high cost of purchasing expensive servers and hiring technicians to manage them. A business may subscribe to a service provider and pay for the services they use. It does not have to worry about frequent upgrades as that is the responsibility of the service provider, reducing expenses and increasing profits since funds can be reinvested in the business for initiatives such as product innovation.
Another trend that has affected IT spending is the rise in remote working environments due to the pandemic. As a result, IT spending has witnessed an interesting turn. According to a report released in February 2021 by Statista, a business data platform, the top five investments in technology are cloud-enabled tools and technologies, digital collaboration tools, productivity management tools, remote monitoring technologies, and remote working equipment such as laptops, tablets, and phones. These trends indicate that although technology advances have driven IT expenditures with infrastructure implementation and operation, much spending has been centering on software solutions to fulfill business needs.
A technology investment has both tangible and intangible benefits. Tangible benefits can be measured by revenue generated as a result of the technology investment. The intangible benefits, on the other hand, can not be measured in terms of numbers but IT helps a business to achieve its goals, which may include gaining a competitive edge, increasing customer satisfaction, and improving operational efficiency.
Many businesses now realize the role of IT in improving communication, saving time and money, keeping records, managing inventory, reaching global markets, and enhancing efficiency for daily operations. This has provided a better approach to help businesses carry out their daily work faster as well as more efficiently and conveniently. Technology also provides an opportunity for businesses to sustain themselves through innovation.
Although businesses have come to accept IT spending, they also have to deal with the challenge of ever-changing technology trends. A business owner is faced with the decision of making new investments every so often. However, it’s not always practical to change existing technology just to keep up with the trends.
It is important for a business to first understand its unique business needs and map out all of its processes and the technology that can facilitate those processes. This will help in making the right IT investment decision. Business owners need to be aware that IT investments also come with hidden costs that may result in business spending beyond budgeted figures or abandoning an ongoing project due to high costs.
As technology advances, IT spending has also changed. For instance, with the introduction of cloud-based services, a business does not have to incur the high cost of purchasing expensive servers and hiring technicians to manage them. A business may subscribe to a service provider and pay for the services they use. It does not have to worry about frequent upgrades as that is the responsibility of the service provider, reducing expenses and increasing profits since funds can be reinvested in the business for initiatives such as product innovation.
Another trend that has affected IT spending is the rise in remote working environments due to the pandemic. As a result, IT spending has witnessed an interesting turn. According to a report released in February 2021 by Statista, a business data platform, the top five investments in technology are cloud-enabled tools and technologies, digital collaboration tools, productivity management tools, remote monitoring technologies, and remote working equipment such as laptops, tablets, and phones. These trends indicate that although technology advances have driven IT expenditures with infrastructure implementation and operation, much spending has been centering on software solutions to fulfill business needs.