A recent Harvard Business Review article delves into the importance of adopting new technology and equipment for businesses to remain competitive and the problems that arise when companies realize too late that they are mired in obsolete equipment and processes.
"Managers constantly try to fit new market needs to existing processes and routines," writes author Willy C. Shih, a professor of management practice in business administration at Harvard Business School. "Sometimes they are a fit, but often they are not. They can even require cultural change, which is difficult for established organizations."
He writes how the financial tools companies use often allow previous investments that have not been fully depreciated to get in the way of new investments. "And once investments are fully depreciated, they have a habit of hanging on by virtue of marginal costing."
Shih asks and advises on what established companies should do when new technology appears, and goes on to distinguish between "functional" and "economic" obsolescence. Should they abandon conventional equipment for the new?
Learn some of the solutions and alternatives he offers in the full article.
Equipment financing is one option to make new equipment a reality. Find more on the benefits here.