In the digital era, new companies must rely heavily on technology to be competitive. Information technology is a crucial part of business models and can promote growth when well-strategized. However, if IT resources are not used effectively, they can actually inhibit margins and growth.

1. Limited budget

Especially for startups, the cost of acquiring and maintaining IT systems is a big piece of the operating budget. Limited capital makes it that much harder to keep up with technology advances and compete with large companies. Startups must learn to prioritize their IT spending and assess the potential risks and returns.

2. Lack of technical expertise

Some startups do invest heavily in software and hardware, yet fail to adequately train their employees. This means they never get full value from important technologies. If even one employee doesn’t understand how the technology is best used, it reduces productivity and the customer experience.

Some businesses will provide new hires with basic knowledge, but fail to follow up with additional training, even on later upgrades. Properly training employees to use business applications creates a greater connection between business and IT staff that benefits both.

3. Information overload

Remarkable technical advances are appearing with great frequency, and will continue to do so. More information than ever before is freely available.

Collecting huge volumes of data on customers and processes can lead to information overload, resulting in delays, more complex policies, and a lack of focus on what matters. Too much information leads to over-analysis, which disrupts communication and creates wasted time and effort.

When there’s too much information, there are more options and questions. This has a negative impact on decision-making and leads to inaction.

To prevent this situation, startups need to adapt their company culture to new procedures and policies to manage and filter provided data. As the first step, unwanted, questionable, or poor-quality information should be identified and removed from any analysis.

4. Cyber security issues

Every business faces security risks in their IT infrastructure, including startups. Cyber criminals thrive by probing for network vulnerabilities like easy-to-guess passwords and lack of access restrictions. In order to improve cyber security, employers should train all personnel in secure practices, including strong-password policies.

It’s also critical to do regular data backups so that information can be easily recovered in case crucial files are lost or corrupted. Hackers are also known for denial-of-service attacks, which take over a system so you can’t reach your own data, as well as pointless, malicious destruction.

5. Outdated technology

No technology remains “cutting edge” for very long. In addition to disruptive innovations that change the digital environment for everyone, established software companies are constantly issuing enhanced versions of the same applications.

The capacity for adapting to all this change is important. Businesses that fall behind in technology don’t have the features customers are looking for.

Unfortunately, new technologies can be expensive, and may also require retraining staff or even re-engineering company operations. There will always be another new technological product; knowing which ones are worth investing in depends on your specific business needs and sound research.

6. Failed upgrades and integration

One frequent strategy is to upgrade operations at specific intervals, such as purchasing a new telephony system every six years. But that’s too long an interval if a system is crucial to the business mission.

If a competitor has technology that enables them to provide better services, the cost to your bottom line could be greater than the cost of the upgrade.

It’s also important to consider the standardization of hardware and software. Buying new systems could mean unplanned upgrades if they aren’t compatible with vendor or customer equipment.

Integrating new technology without thorough evaluation of existing systems and processes could also wind up in duplicated efforts and additional security risks.

To summarize, there’s always a demand for technical progress, but upgrading for the sake of upgrading could lead to strained budgets. Too much technical sophistication could lead to information overload and lack of proper training.

Outdated technologies should be replaced, but integration with your existing systems must take into account security and compatibility issues. Every technical upgrade should meet a real business need and involve careful implementation planning.

Josh McAllister is a freelance tech writer and business consultant based in New York. In his free time, he enjoys all things geeky and gadgetry, the outdoors, and spending time with his family. You can reach him on Twitter @josh8mcallister