Part of doing business is understanding certain types of trade-offs related to the decisions you make. Specifically, we want to highlight opportunity cost as it relates to technology. What is the opportunity cost of technology, and why is it an important concept for a business owner to grasp?
Understanding Opportunity Cost
To calculate the opportunity cost of technology, you first need to consider its features and benefits. Opportunity cost is how much your organization loses as a result of not leveraging these features and benefits. For example, let’s consider the opportunity cost of not having a productivity suite for your business with all of its modern-day amenities. You lose a lot without access to these apps, cloud access, integrated communications solutions, and secure file sharing—so much that it could be to your business’ detriment.
The Value
There is one glaring problem with calculating opportunity costs for your business: you need to understand the technology before you can make an accurate estimate for it. You’ll have to consider how other organizations have used it to solve similar problems and how other technology solutions can address the same challenge. You would then compare these solutions side-by-side to determine which one of them would provide a better return on your investment.
Making Tough Decisions
While statistics make deciding things easier, they are not always the be-all and end-all. You also must consider your organization’s specific needs and how these solutions are actually going to address them. If your organization does not lose anything regarding opportunity cost by working with cheaper software, then perhaps that is the best way to get the highest ROI.
On a similar note, though, if there is a significant opportunity cost to a potential solution—perhaps one that would help you drive more sales or open up your services to new clients or markets—then the feature-rich solution is worth the investment. Again, knowing your business inside and out will help you make the best decision possible with your IT solution acquisition.
Let Us Help Your Business
If you need assistance with your technology management, CoreTech has a plethora of knowledge you can leverage to benefit your business. We can help you identify the best return on your investment and ensure that you won’t be leaving any unaccounted-for opportunity costs on the table. Learn more by calling us today at (270) 282-4926.
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