TCO and managing system lifecycles (part 1 of 4)
May 2 2007
"If it ain't, broke don't fix it!" If this is the mantra for your office networks, it may be costing you a bundle! Though it may seem counterintuitive, holding onto older equipment and software can be a costly mistake. Its three main downfalls: support costs, security risks and low productivity.
Five key components make up the total cost of ownership (TCO) for your system: hardware and software acquisition, installation, training, support and maintenance. When you itemize the ownership costs for computers and networks, the biggest hit is support and maintenance -- and the longer you hold on to your old equipment, the more expensive it gets.
Some of the advertising you read is true: today's hardware and operating systems are much better than their older counterparts. Newer systems (for example, Windows XP vs. 98), if properly installed and configured, will be more efficient, more secure and extremely stable. Each one of these benefits alone quickly offset the costs of acquiring and installing new systems. What would you do with an extra 15 minutes each work day? Believe it or not, those little "hour-glasses" add up! Multiply them across your user base and you can see the gain in productivity. Most firms realize these improvements in quality of work.
Two-thirds of global businesses in 2000 followed a "managed refresh" program, proactively replacing their PCs and notebooks on a regular basis -- typically, three years for workstations and two for laptops. While this may seem extravagant to some, it has been proven that, for certain companies, this program reduces TCO and increases ROI.
Not every company needs this strict a regimen. Some businesses will find that four (or even five) years yields a better TCO/ROI ratio. Given quality equipment, The ProComp Group tends to view four years as a good fit for most small businesses' replacement cycle. The main point is to consider the hidden as well as the up-front costs in maintaining vs. replacing your aging infrastructure.
Two final thoughts:
Leasing can be a smart option. Typically set in 3-, 4- or even 5-year increments, leases provide a natural cycle structure. Contact The ProComp Group for more information.
When you do replace those old clunkers, recycle responsibly. Free Geek (see back page) can help you put them into good hands.