Don’t Let the Sunk Cost Fallacy Keep You Stuck in the Past

The more money you throw at something, the more you hope that it will eventually deliver on the investment… but if you’re not getting the results you hoped for, you might be falling into the sunk cost fallacy. You might find yourself making illogical decisions based on the investments you’ve already made, and that doesn’t help anyone—in life or in business. Today, we want to discuss how you can free yourself from the sunk cost fallacy to make better decisions for your business’ IT solutions.

Step 1: Accept Your Previous Investments Are Long Gone

First, realize that the money you’ve invested in software has been spent. Maybe it helps to think of it as an experiment. While you could dwell on this lost capital, you should focus instead on the future and what it can hold.

Stop trying to justify past expenses. Instead, try to imagine if you would make your current decisions even if you hadn’t invested any funds into it. This helps to move your thinking from past-oriented to future-oriented, and you might find yourself considering the dilemma from a more realistic, clear, and critical perspective.

Step 2: Consider Your Options

The next step involves looking at the options that will benefit your business over time, especially as costs add up. One way to do this is by comparing fixing an issue with your tools with preventing that issue entirely with proactive managed IT.

A Quick Fix Means More Financial Responsibilities

The costs associated with fixing an issue are considerable, and they include the quote itself in addition to the time necessary for applying the fix. However, you might not have considered the following costs in your calculations:

• Lost productivity: If your software isn’t working, it’s costing you money. For example, if you have a staff of 23 making $28.16 per hour, one lost hour per week due to slow technology means you’re wasting $33,679.36. Wild.
• Security: Protecting your business can be pricey, but when you compare those costs to a data breach, they start to show their value. Some small businesses can close down permanently if they suffer a data breach, either due to compliance fines, remediation measures, or loss of business/public trust.
• Opportunity costs: If you’re using a system that keeps breaking down, that means you’re wasting time and money fixing it that could be better spent if you just moved to a different, more reliable solution.

Managed IT Means More Inclusive Value

If you were to shift your focus away from fixing technology to a more proactive approach, you could save so much time and money in the process. When you work with a managed service provider, most costs are wrapped up in a monthly fee that is easy to adjust based on your business’ needs. This monthly fee includes benefits such as boosted productivity, better data accuracy, improved security, an enhanced customer experience, and greater growth potential. It’s clear which is the better option between the two.

Step 3: Audit Technology to Save Yourself Some Money

Every part of your business is touched by technology, so it makes sense to understand how your technology impacts operations. Yet you have to look at it through an objective lens and make decisions that are best for your business, even if they are hard. This is where an audit comes in. It helps to have a third party conduct your audits, as it eliminates the biases that might interfere with clear decision-making.

IC Tech can be your IT provider and your go-to resource for any technology audits you might need. Together, we can help your business overcome the sunk cost fallacy, get over lost investments, and move forward with a clear vision toward the future. Learn more by calling us at (800) 682-4650 today.