In today’s fast-paced digital landscape, small and medium-sized businesses (SMBs) often find themselves at a disadvantage when purchasing technology solutions. While large enterprises have dedicated IT teams and procurement departments, SMBs frequently lack the same resources, leading to an information gap between them and tech vendors. This gap can result in costly mistakes, missed opportunities, and even security vulnerabilities. However, by taking a strategic approach to purchasing technology solutions, SMBs can level the playing field and make informed decisions that drive growth and innovation.
1. Understand Your Needs Before Engaging Vendors
Before you even begin talking to vendors, it’s crucial to have a clear understanding of your business needs. This involves conducting a thorough assessment of your current technology landscape, identifying gaps, and outlining your goals.Technology is a tool used to solve problems. What business problem are you trying to solve? By clearly defining your requirements, you’ll be better equipped to evaluate potential solutions and avoid being swayed by sales pitches or flashy products that don’t align with your objectives.
2. Intellectual Property Ownership: Know Your Rights
One of the most overlooked aspects of purchasing technology solutions is intellectual property (IP) ownership. When working with vendors, especially in custom software development or bespoke solutions, it’s vital to clarify who owns the IP. Some vendors may retain ownership of the underlying code, algorithms, and data, which can limit your ability to modify, sell, or transfer the solution in the future. Ensure that your contracts clearly outline IP ownership and that you have the rights you need to use and adapt the technology as your business evolves. Understanding your initial needs will better define whether IP ownership is a factor to begin with.
3. Ask about Data Security, even if you don’t understand it!
Data Security is a critical concern for all businesses, SMBs can particularly struggle with industry security standards due to limited resources and expertise. The widening information gap between vendors and business owners only adds to the challenge. When evaluating technology solutions, make data security a top priority, even if the technical details are a bit over your head. Start by asking vendors to explain the security measures they have in place, such as encryption, guaranteed uptimes, backup and recovery, and regular security audits. These are key elements that help protect your data from unauthorized access and cyber threats. New technology solutions may require additional Cyber Security Insurance coverage that will be directly related to the data security of any solution. Even if these terms are unfamiliar, it’s important to get a sense of how seriously the vendor takes security.
4. Start Small, but Make Sure It Can Grow
When you’re just starting out with a new tech solution, it’s smart to start small. Choose a solution that meets your immediate needs without overwhelming your team or your budget. This approach allows you to get comfortable with the technology and see how it integrates with your business operations. There are often many free/low cost solutions that will get you started or may even solve your problem entirely. However, it’s equally important to ensure that whatever solution you choose has the potential to scale as your business grows.
Ask your vendor about the scalability of their solution. Can it handle more users, larger data volumes, or additional features as your business expands? Knowing this upfront helps you avoid having to switch systems down the line, saving you time, money, and the hassle of retraining your team. Starting small and scaling up is a practical strategy that balances your current needs with future growth.
5. Watch Out for Common Pitfalls
Purchasing technology solutions can be a complex process, and there are several common pitfalls that SMBs should be aware of:
– Vendor Lock-In: Some vendors design their solutions in a way that makes it difficult or costly to switch to another provider. Look for solutions that are based on open standards or that offer easy data migration options.
– Hidden Costs: The initial price of a technology solution may not reflect the total cost of ownership. Be sure to ask about additional costs for implementation, training, ongoing support, and future upgrades.
– Over-Customization: While customization can tailor a solution to your specific needs, it can also lead to increased complexity, higher costs, and difficulties with future updates. Aim for a balance between customization and maintaining a standard solution that can be easily supported.
Wrapping Up
Navigating the tech world can certainly be daunting but it doesn’t have to be! Although trying to evaluate solutions and systems in an uneven playing field is a challenge, knowing your needs and the right questions to ask, begins to lower that gap. Tech decisions are critical to any business and they ought to facilitate the businesses growth. To that end, you should be able to answer yes to at least 8 of the following questions before implementing a new technology solution:
- Do you have a written goal statement as to the business objective(s) you are looking to solve for?
- Do you have a clear budget?
- Do you understand the total cost of ownership, including capital expense, licensing, and any ongoing maintenance/support costs.
- Do you have an internal resource who will be responsible, and has the time for a successful implementation?
- Have you completed a GAP analysis across our entire technology landscape?
- Do you know who is responsible for the actual development/implementation of the solution? Where they are located geographically? What specific and relevant skills and experience do they have?
- Do you know who owns the IP and what happens after the implementation?
- Is the solution based on open standards and does it allow for easy data migration if we want to move vendors?
- Does the vendor have a formal data security plan and will this affect my Cyber Security Insurance Policy?
- Does this solution allow for scalability while meeting our budget today?
Schedule a call so either I or a member of my team, can help you determine the best solution for your needs.