It still blows me away when I hear people talking about spending large amounts of money on software or some type of technology solution, when they have no clear strategy behind it.  Most importantly, they really don’t understand how to implement it effectively.

People seem to spend a lot of time evaluating software products in terms of features and direct out-of-pocket costs, but they fail to conduct a clear cost/benefit analysis.  Sure, it is fun to shop for new toys, but if we ask ourselves three important questions, we will be happier and more productive in the long-run.

3 Questions to Ask Before You Buy

Question 1 – What is this technology going to help me do?  A. Generate more revenue B.  Reduce costs C. Save time D. Be more productive E. All of the above. F. None of the above.  If you can’t clearly answer this question, don’t even bother looking at new toys.  The more specific you can get in answering this question, the better.  FOR EXAMPLE – Salesforce.com is going to improve the productivity of our salespeople by so they can generate 30% more revenue

Question 2 – What is the technology going to cost me in direct out-of-pocket costs?  This is usually pretty straightforward.  EXAMPLE – $X per salesperson per year. ….OK, this is going to cost me $15,000 per year and increase revenue by $60,000 – a return on investment of $45,000, right?  Wrong.  This is where most people stop their analysis…they fail to really answer Question 3 honestly.

Question 3 – What is it really going to cost me to implement and run this technology solution effectively so I can accurately answer Question #1? Salesforce.com is a great CRM solution, but it doesn’t run itself. ExactTarget is a great email service provider, but it won’t design or write your emails so they’ll get opened. Google Analytics is FREE!  How could you not get a good ROI from Google Analytics?  The answer is – if you don’t know what you’re trying to accomplish with it, you’ll pretty much get what you deserve.

Question 1 and Question 3 are admittedly the toughest questions to answer.  With some complex pricing structures, Question 2 is even difficult to answer.

So, what’s the bottom line here?  Don’t be fooled into thinking technology will solve your problems if you can’t accurately define your problems. And certainly don’t be sold a solution you don’t fully understand how to implement and manage effectively….just because a good salesperson told you it will solve all your problems and make your life wonderful.

Do your homework.  Actually, less than perfect technology with thorough implementation planning will outperform the best technology without the right people and strategy to make it work for you.