Companies could be struggling when choosing the best long-term strategy on how to manage their IT infrastructure. There is a common misconception that a company saves money if it were to delay the acquisition of newer technology. Evidence proves otherwise when considering total cost of ownership in the fourth and fifth years of a laptop’s or PC’s usage.
“Experience has shown us that an average three to four year PC lease-and-refresh strategy can yield total cost of ownership savings of up to 10 per cent compared to purchasing and holding equipment,” said Joseph Aquilina, chief executive officer of Smart Technologies.
“The false assumption about PC acquisition costs stems from a traditional view of capital acquisitions. Asset purchases including buildings and certain machinery maintain their useful value well over time, requiring only investments in upkeep to retain usability and productivity. These assets, however, are usable over long periods of time, and thus lend themselves well to elongated depreciation cycles. Keeping PCs in the enterprise for five years allows for full asset depreciation, thus helping to support the assumption that this time length helps to maximise PC returns. However, in contrast to building and machinery assets, PCs have relatively short useful lives and performance visibly degrades over time.
“Reducing PC costs requires IT and business executives to adopt a holistic view of total cost of ownership of their infrastructure to take into consideration breakage, operational, and residual value costs, as well as processes and best practices for managing the PC life cycle. The optimal PC total cost of ownership returns typically occur within the 36- to 48-month range. The cash required to fund this rate of technology refresh can drain resources in a cash-constrained environment and where other business priorities compete for the same pool of money. Implementation, asset management and disposal, and other political issues can add further concerns.”
A proper PC total cost of ownership optimisation model examines acquisition, deployment, image management, patching and upgrade, system build and data migration, support costs, training, disposal costs, residual value, and warranty and breakage costs. Companies with disciplined PC management strategies contain these costs by allowing minimal hardware configurations and system software images.
Founded in 2008, Smart Technologies was the first company to introduce the concept of computer leasing in Malta. With computer leasing, companies avoid the capital outlay of buying their entire IT platform and instead, opt to lease the system and incur less expenses when the system needs upgrading or refreshing. Smart Technologies also introduced smart renting and smart outsourcing, taking the company-IT management to new levels.
“Leasing your company’s PC and IT structure can help maintain a three- to four-year refresh period while conserving scarce cash resources. Exploiting leasing introduces best practices and technologies for PC management and reduces support requirements by streamlining system images and imaging. We believe IT and other business executives should consider leasing as an effective tool in reducing IT costs by promoting an optimal three- to four-year PC refresh period,” added Mr Aquilina.