It’s Time to Go on Offense with Your Company’s Tech Equity

The pandemic underscored for small- and medium-sized businesses (SMBs) that there’s always something coming around the corner. It’s imperative to go on offense and be prepared.   

SMBs were hit especially hard by the pandemic and its fallout. A survey conducted in the early months of the pandemic found that mass layoffs and closures were occurring for nearly half of SMBs. And now, while no longer shut down by the pandemic, SMBs continue to face challenges resulting from the Russian War with Ukraine, inflation, rising interest rates, and more. Unforeseen catastrophic events on the horizon require thoughtful and innovative solutions — in particular, through investments in technology designed to future ready their businesses. 

“Tech Equity” is a term I coined to describe the value added to a business derived from technology. Tech Equity is what fuels the journey to becoming future ready, exploring new opportunities, and staying ahead of the game. Companies that buy into building Tech Equity are better able to navigate crises. For example, those who had already upgraded their office collaboration software to tools like Microsoft Teams or Slack had less difficulty switching their employees to remote work.    

Tech Equity is comprised of two categories of technology components: Alpha and Beta. The term “delivering alpha” is used by investors to indicate stocks that generate higher than market returns, typically compared to the S&P 500. The Alpha category of Tech Equity harkens back to this term. It contains the components that provide a competitive edge and create the most value.  

This is not to minimize the effectiveness of Beta components, which are important for managing risk. Betas are like having less risky stocks in your investment portfolio. The goal is to find the right balance between creating value with the Alpha components while mitigating risk with the Beta components. 

 The following are the Alpha and Beta components to consider for building Tech Equity in your SMB:  

Alpha components of Tech Equity  

1. Customer Focus– A business’ success hinges on the quality of the customer experience. Customers expect their interactions to be personalized and seamless. To effectively compete in the digital economy, companies must use tools that focus on customer needs. 
2. Data and Analytics– Valuable data is found in all SMBs, whether it’s a real estate agent’s customer database or an auto repair chain’s parts inventory. But using data to your business’s advantage is key. It can provide invaluable insights and enable better decision-making. Also, it can reveal changing conditions in real time. 
3. Digital Culture and Talent– The culture portion of this Alpha component is created and fostered by strong leadership that’s open to the possibilities that technology has to offer. It also requires acquiring and keeping talent that can put Tech Equity into action through a high level of engagement and collaboration.  
4. Process Excellence– Slow and frustrating business processes, such as inventory, can be replaced by digital processes that move at light speed, enabling you to deliver quality outcomes by reducing inefficiency and increasing productivity. This leads to increased profits, customer satisfaction, and employee morale. 
5. Security– The importance of security can’t be overstated. Ransomware, phishing attempts, data breaches and malware are all too common. Because SMBs can be viewed as less secure than larger companies, they’re increasingly targets of attacks. Good security requires hardware and software solutions such as firewalls and virus protection, in addition to clear policy and training.

Beta components of Tech Equity  

1. Tech Debt 2.0® Management– This component takes the name of my previous book, Tech Debt 2.0®, as it addresses the creeping inevitable failure of systems that aren’t kept up to date. Whether aging mission-critical databases or non-redundant network hardware, it’s vital to address Tech Debt 2.0. Otherwise, it can have the negative effect of eroding Tech Equity.  
2. Business Agility– Because the future is uncertain, quickly sensing and responding to change is essential. Supply chain disruptions, for example, crippled countless SMBs. But those with stream-lined, agile solutions, such as automated order processing and shipping processes, were better equipped than their competitors to react to changing conditions. 
3. Business Model Innovation– A certain amount of risk-taking goes into creating Business Model Innovation, yet it can be riskier not to take the risk! Adjusting business models and implementing additional technology will further business objectives, add more recurring revenue streams, and create increased differentiation.  
4. Infrastructure Optimization– Infrastructure Optimization ensures that servers and network equipment have the capacity to meet the current and near-future needs of the company. It assures that employees are using up-to-date, secure devises with collaboration and productivity tools to efficiently get their job done. 

Now more than ever, it’s time for SMBs to go on offense. Tech Equity provides opportunities for all types of SMBs to use technology to level the playing field and become future ready. What’s more, it doesn’t have to break the bank. Like a stock that pays dividends, there’s a payoff on your investment. 

Written by Michael C. Fillios.

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