Technology and your business: Why Before When

In today’s eWorld technology is everything and everywhere. But how can you make it work for you? You: the business owner. I know, technology promises to make things easier, faster, and more profitable – but will it really? It depends. It comes down to your business strategy. What I mean, is your business strategy needs to be outlined well before you incorporate technology into the mix. Don’t go spending money on technology hoping a strategy will fall into place, hoping your business will grow and become more profitable.

Technology should be applied to a strong business strategy – not, be the strategy itself. Technology can be a godsend but only if it fits within your value proposition.

Let me illustrate:

You own a small but successful coffee shop. For years you have enjoyed a virtual monopoly because you are the only coffee shop in the area. But the real reason you are successful is that your customers enjoy the experience of going to your shop. You have managed to pay off all your debts and saved a good amount of money over the years. One day, across the street, Starbucks opens up. You a terrified because you think that all your customers will flock to Starbucks. Without too much thought you decide to diversify your business thinking that the losses you incur from the lost customers can be made up from the new business. So you buy an internet business. Having been selling coffee for the past 15 years you know little to nothing about running an online business, but that doesn’t discourage you, you know that technology is the new way to go, so you invest many hours and dollars learning the trade. Meanwhile, your customers from the coffee shop start to feel neglected and wonder where you are. Slowly they actually begin to go to Starbucks because the value they once saw from your coffee shop (the great customer service you offered) is now gone.

This story outlines a common mistake in business. A threat appears or a new technology pops up and every company gets antsy. The first thing you should do when a threat appears or a new technology comes around is to first take a step back and analyze your value proposition.

The way you analyze your value proposition is to outline:

1. Your Goals: what you want your business to achieve;
2. Your Product Market Focus: what are the products/services you sell (or plan to) and to what markets; and
3. Your Core Activities: What are the value-adding activities your business does (or will do)

From these three components formulate your value proposition: what your business does to attract customers and add value to the market place. After you have outlined your value proposition, take a step back and try to see how technology can improve or help build momentum to your value proposition.

Never (and I mean never) add technology as a way to create a breakthrough. Think back to the story. If the owner had taken a step back and seen his/her value proposition he could have invested in technology that would have enhanced it as opposed to crippling it.

Remember, technology can be very beneficial to your business but it has to mesh well with your strategy.