Costs of using technology

Using technology can raise a business's costs, even if it later makes the business more efficient. The money is often spent before any benefit arrives.

Set-up and running costs

Buying and installing systems costs money. You might need laptops, tablets, card readers or a new till, and then pay someone to set up the software, connect devices and move old records across. After that, maintenance is needed: equipment breaks, software needs updating and faults must be fixed, sometimes by paid IT support.

Staff training can add another cost. Employees need time away from serving customers to learn the system, and you may pay for a trainer or for staff wages during training. Training is important because poorly trained staff make errors, but it still uses money and time.

Cyber security also costs money. A business may buy antivirus software, set up firewalls and backups, or pay for security advice. It may also take out insurance to cover losses if something goes wrong. These measures protect customer data and sales, but they are extra spending created by using technology.

Ongoing subscriptions

Many software and services are paid for by subscription, such as a monthly fee for accounting software, cloud storage, website hosting or an online booking system. These payments continue for as long as the business uses the service, so they add to regular overheads rather than being a one-off purchase.

For example, a garden centre installing tablets for its café tills might spend £2,000 on devices, £500 on installation, £60 a month on till software, £350 on training and £400 a year on cyber security. The technology may speed up service, but these costs must be covered before it adds to profit.