With the arrival of a new year, it's time to implement that new budget on which you've just put the finishing touches. I hope technology was one of the important line items in your budget and that you plan to implement at least one new application in 2007.
Now, get ready to start the year right–and break that brand-new technology budget. I'll use some of our agency's experiences from last year to demonstrate why doing so can be the best thing for your agency's success.
The main consideration in making any investment is whether it gives you an acceptable return. The most effective way to increase your return on investment is to make more productive use of your staff's time. In fact, the return can be high enough to justify breaking your technology budget.
If you've been using single-page scanners at individual workstations or a high-speed central scanner, consider replacing them with new workstation powerhouses like the Canon DR2480, which scans 25 pages a minute in the single-page mode or 50 pages per minute in the duplex mode. Since such scanners are six times as fast as single-page scanners are, you'll save enough time to justify the $800 cost per unit before the end of 2007.
When you start to count the numbers of scanners you'll need, the cost of this upgrade can be intimidating. You might need to do what we did. We smashed our 2006 technology budget and by the end of the year wound up spending more than 8% of annual revenue on technology–more than twice the amount we originally budgeted.
Upgraded scanners alone might not break your budget, but other things could. For instance, one major vendor recently announced an almost 100% increase in what it charges for support. This is no small hit to most agencies' technology budgets. If your vendor has increased the cost of support and you decide to look for alternatives, be aware there are numerous costs associated with changing vendors. Besides the expense of the new system itself, you may incur "soft costs" in the form of decreased business processing speed, as employees adapt to the new system. There also is a soft cost associated with the time needed to reconstruct any data that couldn't automatically be converted to the new system.
If your vendor recently was acquired and is now dead-ended on a "dot rev" platform, it may be time to look for a new system. That will break your budget but likely will give you better efficiency. (A "dot rev" system is one that will receive no new major updates and that ultimately will be "sunsetted.")
Perhaps your vendor is offering a "one-time" incentive to upgrade to a new system. When such offers are made, it can be tempting to wait and watch; but if you get a good offer, it may pay to jump on it. One recent offer lowered the cost of upgrading by almost $7,000.
One of the best investments you can make is in dual (or triple) monitors for each workstation. We've used multiple monitors for more than two years and are amazed at how many ways they've improved our workflow and thereby lowered our transaction costs.
So far, I've discussed only additions to your technology that might justify breaking your budget. But you also have to think about replacement. Let's break your master server tonight and see what getting a new one will do to your budget.
Budgeting for technology is increasingly important, as leveraging technology becomes more vital to agencies' success. But don't be so committed to your freshly completed budget that you pass up significant opportunities to operate more productively. Sometimes breaking the budget is your best strategy for beating the competition and moving ahead.
Edgar J. Higgins Jr., CPCU, is the owner of Progressive Management Consulting and the Thousand Islands Agency in Clayton, N.Y. Readers can contact Ed at ed@edhiggins.com.
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