Can you afford to keep up with technology? Here’s a thought…
There is a “person” in your phone that answers your questions. Amazon seems to read your mind when you land on their website. Some cars even parallel park for you. Often people think of companies like Google and Apple when they think of technology innovation, but in business, technology advances extend far beyond the mobile devices and websites. Commercial equipment in all categories offer gains in efficiencies, lower operating costs and even increased revenues. This has business stakeholders seeking ways to keep up…affordably.
But is the pace of technology really increasing? In a word…no. Research from Harvard and the University of Pennsylvania both point to the fact that while it “feels like” technology advances are accelerating, they’re actually not. The pace of technology advancement has remained relatively constant in most areas for more than 100 years. And if the pace isn’t really increasing, business owners must develop a plan to be constantly evolving to adapt to new technologies.
As part of your company’s strategic planning, you should develop an asset plan. What are the critical assets, equipment, technology, etc., that power your business? How long should you plan on keeping each asset before upgrading, replacing or rebuilding based on your planned usage of each? From there, think “AFMD” – Acquire, Finance, Manage, Dispose, as the core elements of strategy to think about for each major technology your business depends on. It may take some real thought the first year, but by updating this approach every year, you have the beginnings of a long term plan to keep up with technology. Now, how to afford it?
The financial demands required to pace technology advances can feel daunting. Just when you feel like you’ve completed a major investment in technology for your company, it’s time to upgrade, trade-in, or replace. This leaves business owners with painful cash flow spikes and unpredictable operations. The life cycle management plan might help you predict when those cash flow spikes may occur…but who wants cash flow spikes? The “F” in the AFMD life cycle plan—finance–might carry the most weight toward your long term success. When executed well, financing can help you:
• Reduce and even eliminate cash flow spikes
• Acquire equipment and technology with affordable monthly expense
• Just pay for what you use in an asset, instead of paying for all of it
• Match expenses to revenues more easily
• Reduce the hassle of end of life trade-in or disposal issues
• Affordably stay on the cutting edge of technology
The pace of technology can be effectively managed. How you manage the life cycles can even become a durable competitive advantage for your company—it just takes a little effort. We can help. At Key Credit, we offer competitive financing with un unmatched standard of service that allows you to get the most from your assets in the most affordable way. Do you need a plan? Let’s talk.