Colin Randall* is frustrated. His firm’s clearing partner just updated its software suite, and Colin discovered that the earlier version of Windows on three of the five computers in the firm’s office are incompatible. Terry, his friend who runs the local computer store, warned him that the newer version of Windows probably wouldn’t work well with what he called “those old computers.” (Old? We bought them just four years ago!) Terry added that some of the other software may not work correctly on the new units, so he might also need to buy updated versions of those programs. What Colin thought would be a simple software upgrade is now going to set him back a couple thousand dollars!
Just when you think you own the newest technology, something tops it. That’s because technology companies are on an ongoing quest to improve their products. Yes, part of the reason is so they can keep their profit margins healthy, but those improvements are really designed to benefit you. From smartphones to desktop computers, the current models are light-years ahead of their counterparts from just two or three years ago. They’re faster, more secure, and provide more functionality.
That said, it’s frustrating to be in Colin’s shoes. His RIA firm isn’t large, and he hoped his last computer purchase would cover the firm’s needs for a long time. In the computer industry, four years is an eternity — and by the time he replaces the three computers and their software, he’ll need to start thinking about the other two.
The farther you fall behind the state of the art, the tougher (and more costly) it becomes to catch up. You may also begin to miss opportunities. Still, unless you have an unlimited budget and can see the future, it’s generally impossible to stay ahead of technology. What is possible — and what makes a very practical strategy for most RIA firms — is taking a proactive approach to keeping up with technology.
That approach starts when you decide to be strategic about technology. You have to see it as an integral element of your daily business, rather than something you think about only when it’s time for an upgrade. Take an inventory of your current technology, develop a plan to replace it before it becomes obsolete, and budget accordingly. For example, if your team uses laptops to present to customers, you may want to plan to replace each of those laptops every two to three years. It may seem wasteful to replace “perfectly good” equipment, but if it’s a generation or two behind what’s available, it may not be as good as you think.
You also need to be open to new technology and ideas, but that doesn’t mean you have to jump every time something new is released. In fact, you can reduce your risk by letting other businesses be the first adopters of a new technology. Let them discover and work out the bugs so you don’t have to. If you stay 6 months or so behind the leading edge, you’ll be more likely to avoid the problems that plague new products and software, and you’ll likely save a great deal of money. Why camp out at the phone store to be one of the first to get a new release when you can buy it for less two months later?
Pay attention to what’s going on in the industry. Learning about technology may not be one of your favorite activities, but spending at least a little time each month to monitor developments will help you make better decisions about upgrades and software. You also need to see what the competition is doing. If other RIA firms in your market have embraced a particular technology, it may make sense for you to do the same.
Not worried about keeping up to date with technology? That’s your choice to make, but at least be sure you’re taking advantage of updates from the makers of what you already have. Manufacturers and software developers use those updates to improve operations, eliminate bugs, and enhance the security of their systems. Failing to make those updates puts your RIA firm at greater vulnerability for downtime and security breaches — and in the long run, those could end up costing a lot more than some simple upgrades.
*Names, businesses, events or incidents in this paper are fictional and are the product of the author’s imagination only. Any resemblance to actual persons, living or dead, or actual events or incidents is purely coincidental.
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