The ways in which users interact, shop and consume content are changing rapidly. And that’s pushing businesses to think outside the box. For example, accountancy firm Deloitte predicts that shoppers will spend $1 trillion in 2023 buying goods and services through social media sites. Meanwhile, revenues in the virtual reality market could potentially surge 50% to almost $7 billion, according to the firm’s estimates.

With new innovations arriving each day, startups have eye-catching tech options to consider left, right and centre. But rather than rushing in, it’s important to think about the potential impact of technology on your business. After all, not every gadget or system will be the right fit. And you could end up going too far and reaching a breaking point.

For that reason, we’ve decided to look at the pros and cons of introducing new technologies to your startup. We’ll focus on how you can do it properly and why it’s vital to get the balance just right.

A technological revolution has fundamentally reshaped the business world over the past 30 years. The widespread adoption of the internet, emails, and search engines in the late 1990s and early 2000s changed how companies operate forever. 

The launch of the first iPhone in 2007 took things a step further, introducing the many benefits of smartphones and apps. Its popularity coincided with the rise of social platforms like Facebook and Twitter.

Today, startups have access to more tools and tech resources than ever before. In fact, technology usage among small and medium-sized enterprises (SMEs) now makes a £216 billion contribution to the UK economy, according to software company Sage. What’s more, in a post-pandemic world, 92% feel technology is key to their growth and survival.

How are entrepreneurs using tech?

Cost-cutting is a major reason why SME leaders are adopting more technology for their business, with 62% flagging this as one of the main reasons for adopting new technology. More than two-thirds (68%) say it’s useful when competing for new customers.

Large investments continue to be made in data-generating technologies, Sage also found. These include the likes of social media channels, websites, and HR software. 

Learning lessons from Covid-19

Lockdowns and other Covid-19 curbs appear to have increased tech spending among small businesses. Many firms were forced to diversify their operations or move services online as social distancing measures hit.

Technology spend continues to rise in business, and the impact of technology on a business can be huge. But it’s important to understand how to adopt technology, and when is the right time to do so. Getting it right can reap rewards, but there can be drawbacks too if tech investment isn’t done properly.

Benefits of technology

Stronger communication and collaboration

Social feeds, chatbots, and emails give you plenty of ways to speak to customers directly. So, no more posted invoices, outsourced call centres and delays in responding. What’s more, tools like Zoom and Microsoft Teams allow staff to work from pretty much anywhere.

Boosting efficiencies

Stock management, order processing, and basic accounting can now be automated to remove the risk of human error. You can spend less time going through complex records and more hours growing your business.

Potential for cost savings

Hi-tech manufacturing processes can cut waste across your company. Meanwhile, video conferences and high-speed internet services could reduce your spending on travel and office space. Artificial intelligence can also complete repetitive or low-level tasks, freeing up workers’ time. 

Supporting sustainability ambitions

Renewables and energy-efficiency measures can cut your carbon footprint over time. This should future-proof your operations and bolster your reputation too.

Savvier marketing

From search engine optimisation to email and influencer marketing, there are lots of opportunities to think outside the box.

Enhancing security

Data encryption, anti-virus software, and secure online bank accounts can keep essential information out of the wrong hands. Without them, a data breach could damage your brand.

Drawbacks of technology

Lower staff retention

Social networks and job websites have made it easier for staff to spot opportunities elsewhere. This growing transparency could increase competition for talented workers.  

On the flipside, using technology for business automation might make certain roles redundant, pushing people into unemployment. 

Lower-quality customer experience

Online stores, chatbots, and social media channels might make your business more accessible and easier to buy from. But you risk losing your personal touch and the advantages of one-to-one contact. Any slip-ups could jeopardise your hard-earned reputation.

Heavy set-up costs

Not all technologies come for free. Investing in the latest software, HR systems, or smartphones could land you with a significant upfront bill. It may take time to recoup those costs too. And some gadgets might prove to be little more than an expensive flash in the pan.

Risk of downtime

Relying too heavily on technology for business processes creates a new threat: downtime. A single faulty IT system or communication tool could bring your operations to a halt, hitting short-term revenues.

Security concerns

Any cracks in your digital defences could be exploited by cyber criminals, with damaging reputational and financial consequences. Training employees on security best-practice is vital but can also prove time-consuming.

Whatever your business goals, any new technologies should serve a useful purpose and avoid disruption. Here are some of the ways you can achieve this.

Get early buy-in from staff

Take the time to explain new systems and processes to your workforce, with plenty of advance notice. Clearly outlining the rationale for your changes should keep morale up and reduce nervousness. 

Take things slowly

It may feel tempting to use technology for all your business needs. But signing up for every new piece of kit and software will only complicate your company’s structure and lead to mixed messages. Instead, carefully research each product to ensure it’s a good fit. And always make sure you test their introduction.

Think about your unique needs too. After all, what works in one startup may not be so effective in another.

Track your progress

Purchasing and setting up new technologies is only the beginning. Carefully monitor progress at regular intervals, whether you’re looking to increase efficiencies, reduce costs, or automate basic processes. That way, you can gauge the effectiveness and the overall impact of the technology on your business.

Consider your budget

Weigh up the long-term financial benefits of a piece of technology against the short-term cost to get your hands on it. If it’s unlikely to move the dial, your investment may be better used elsewhere. 

You can also keep your budget on track by avoiding the temptation to overspend and keeping a close eye on hidden fees. 

Maintain a dynamic approach

Since technology never stops moving, neither should you. Stay alert to any new innovations which your competitors adopt. And check trade publications and tech websites for useful developments in the pipeline.

Don’t lose sight of business basics

Customer service and strong internal structures remain key to a company’s success. Whatever neat tricks new technologies can perform, don’t let them replace the fundamentals.

Pitfalls to avoid when bringing tech into your business

From overstretching your finances to communication failures, keep an eye out for these common technology pitfalls.

Going too big, too soon

Implementing new technology requires a clear plan of action, repeated testing, and, above all, patience.

Trying to do too much, too soon may set you up for failure and seriously test the goodwill of staff, investors, and customers.

Investing too much

Think about the size of your business and the financial war chest you have available. As a startup, you simply won’t need the same tech capabilities as a well-established multinational. Overstretching your budget will likely cause financial headaches, rather than positive changes.

Failing to communicate

Proper training and coaching are required to get employees up to speed with your plans. Any failure to engage with them could create bumps in the road. 

Losing the human touch

Moving online or overhauling your customer service team overnight is unlikely to go down well with loyal clients. Any digital transition should retain a personal touch, so people have different ways to interact with you.

Failure to learn from mistakes

Not every tech investment will have the impact you hope. So, be honest about any mistakes you’ve made – and learn from them. Think about trialling any significant changes first, so you know what’s truly achievable.

Keen to take the next step with technology for your business? Explore our asset finance solutions. Security, guarantees or indemnities may be required. Product fees may apply. Finance subject to status.