In today’s digitally driven world, having a small business tech stack – the combination of software programs and services you use to run your business – becomes essential for your small business growth. But how do you know if your tech stack best serves your business?
In this guide, you’ll learn all about tech stacks, and how to audit and improve yours.
What is a tech stack?
As you launch and grow your business, you need software to manage different aspects of your work. The collection of software programs and software-as-a-service (SaaS) that your business uses is your “tech stack.” Each business’s tech stack is different, and over time, it’s common to add software to meet your needs without necessarily knowing whether it’s the right solution.
The challenge is that you may purchase programs that don’t integrate well with your existing programs or overpay for platforms you don’t need. And the more programs you bring on, the more vulnerable your systems and information become.
Thinking about these challenges each time you integrate new software into your existing system can help you avoid potentially costly mistakes in the future.
Why do you need to do a tech stack audit?
Your technology should improve efficiency and free up valuable time for you and your team – and a tech stack audit allows you to analyze the software programs and subscriptions you use and how they serve your business. Here’s an example:
- When you launched your business, you started using a free bookkeeping program and continued to use it for several years. This bookkeeping program doesn’t automatically pull from your point-of-sale (POS) software or integrate with your business bank accounts, so you and your team must duplicate the data entry.
That system may not be too bad if you only have a few monthly sales. But if you’re inputting dozens or hundreds of transactions daily, that system will drain your team’s efficiency and ultimately cost you a lot of hours and errors.
Performing a tech stack audit periodically – once a year is a good goal – will ensure that your technology best serves your business.
How to perform a tech stack audit
A tech stack audit prioritizes your technology needs, eliminates programs that no longer serve you, and identifies and optimizes those programs that are right for your operations but aren’t used to their full capabilities.
The first time you perform an audit, the concept and the challenges you find can feel daunting. This simplified process helps you clear through clutter, find data and information blind spots that may hurt your business, and ensure that your business follows data security requirements.
Step 1: Identify all existing technology
Make a list of all your tech programs. If anyone on your team has permission to download programs for your business, be sure to include them, too. This list is your current tech stack.
Step 2: Define the use and basic details for each program
Define what each program offers for your operational use. Some examples may include bookkeeping, financial management, human resources, customer-relationship data, marketing, graphic design, website hosting, onsite sales, ecommerce, email, and office operations.
It’s a good idea to track who on your team uses each program (by role or by name), and the cost of each program annually, with key points that might be relevant for your operations, such as data use (like storage). Also, find and bookmark or print each program’s information security and data compliance policies.
Step 3: Determine your priority areas
Look at your business’s essential operations and identify the technology on your list that impacts them. The tech you use should improve revenue generation, increase gross margins, or play an essential role in customer relationships and retention. For example, if an inventory-management program helps avoid waste in your restaurant’s supplies, that’s an important part of your tech stack.
Next, review the most significant expenses in your profit-and-loss statement to find opportunities to reduce spending through automation or artificial intelligence (AI). If you don’t have this in your tech stack, explore available programs to see if and how this can support you. If you have it but aren’t optimizing it, do some digging to determine if more staff training is needed or if responsibilities need to be reinforced or reassigned.
Step 4: Review your current tech stack against your priority areas
Once you’ve identified priority areas, review your current tech stack to see what’s needed, what’s underused, and what’s simply unnecessary:
- Make note of the areas where existing technology isn’t serving your business well (or at all). For example, if you launched your business with a point-of-sale (POS) program but now all transactions are through e-commerce, you don’t need a POS program.
- Identify areas where you aren’t using technology but should be to build efficiencies. For example, if you launched your business with two employees but now have a team of 20, integrating a human resources program could support you at every stage of employment, as well as ensure that your business is in line with legal, financial, tax, insurance, and other regulatory areas.
- Find areas where your existing programs are sufficient, but your team would benefit from additional training to make the most of the programs. Bookkeeping and project-management programs are examples that often fall into this bucket.
Before deleting any programs, you and your team will need to spend some time figuring out how eliminating a program may impact others.
Step 5: Budget for ongoing and additional programs
Create a realistic budget for the amount you can afford to spend on technology and list your priority areas. For example, if you need an e-commerce site to transact business, prioritize that. Incorporate costs for training, upgrades, and hardware, such as servers.
If your budget is limited, it can be a good idea to prioritize necessary investments and wait until you can afford an effective solution, rather than simply signing up for the cheapest option. This helps you avoid purchasing insufficient programs or overinvesting in unsuitable software. Keep in mind that once you have a process, it can be difficult to switch, and you may not be able to extract data from your existing platform.
Step 6: Secure the right technology
If you’ve identified areas where additional or different software could help, doing your own research and talking to other business owners in your industry can guide you on the right options. Some points to consider include whether:
- A larger investment today is a better investment for the long run: While it can be tempting to buy multiple cheaper subscriptions, you could save money down the line with an enterprise-resource planning (ERP) system that allows seamless integration across multiple business functions.
Some examples include Toast for restaurants and Intuit Enterprise Suite, which has QuickBooks and Mailchimp, as well as other functions. These systems can share data and allow for collaboration to provide a more comprehensive solution. Also, using an ERP ensures your software and security are managed and updated regularly. - Your business has specialized needs that require specialized software: If so, it’s worth investigating whether the information stored on a platform can be exported or integrated with other software systems and offers established plugins, Excel or CSV downloads, or API integration, so you don’t have to reenter information.
It’s good to know if the software provider can assist with external integrations with a list of pre-established plug-ins, or offer customer support so you don’t have to hire a technical person or consultant on your team. - Deciding between free and paid versions: Free options rarely remain free forever – usually, you‘ll need to upgrade to a paid version or risk losing your data and work. Also, the free versions often use your data to train and develop their products. This may compromise private information about your business and customers by making it available to other users or for selling your data. And often, customer support for the free version is never as good as the paid subscriptions.
If there’s a software program that would be the right choice for your business, it’s often better to budget for the paid version. - You and your team need training and ongoing customer support: Learning new platforms or dealing with software glitches means you need access to training and customer support. Be sure your programs offer this.
How to protect your business
Today, you can’t be too careful when it comes to protecting your online presence – and small businesses are often vulnerable because many don’t realize that they can be targets:
- Before you sign up for a new program, review the terms and conditions. Be sure you understand how and where your data will be stored. Remember, your data is often comprised of your customers’ information. Understand the protocol for security breaches – this is especially important for financial transactions and is often insufficient in basic online platforms.
- If you decide to use software without a subscription or automatic updates, make sure you have a plan to check for and install updates regularly. Many cybersecurity risks are fixed through frequent software updates, so keeping your application up to date is essential for security.
- Consider how you store information. Cloud storage may require an additional fee, but it’s portable. If you need additional hardware, such as a server to download and store data locally, plan accordingly.
- Know what will happen to your information if you leave the service. If you cancel the software, the business may keep your information or charge you to remove or download your data. Consider what leaving the platform would mean before you start inputting valuable information.
- Understand related federal, state, and local laws that govern customer privacy and financial-transaction security. You could face consequences if you violate the law, so ensure your software complies. Some examples include cookie policies on websites, payment authorizations, and opt-out requirements for email marketing.
- Review your business’s security protocols. For example, while a website can have simple logins to share across your business, additional security measures, such as multi-factor authentication and limited access, can protect you from theft or other nefarious activities.
Planning, diligence, and monitoring will ensure you have a strong tech stack that can grow with your business.
Need financing to optimize your tech stack? Pursuit can help
Once you’ve completed your audit, you’ll have a small business tech stack that’s better aligned with your operations and goals – and, if you need financing to help with this or just about any other need, Pursuit can help.
With loans from $10,000 to $5.5 million, we have financing for working capital, equipment, the purchase or construction of commercial real estate, to refinance business debt, and more, as well as advisory services and insightful resources for businesses in New York, New Jersey, Pennsylvania, Connecticut, Nevada, Illinois, and Washington.
Start your application today to help your business reach higher!
