Knowing when to get rid of your old IT equipment isn’t a perfect science. It takes planning and a cost conscience IT manager, to be able to get the maximum use out of your equipment, especially in today’s economy. However, the loss of productivity, increased downtime and increased frustration of employees caused by equipment that is long past its useful life can put a strain on your company’s resources and it’s bottom line.
So keeping in mind this fine balancing act, how do you know when to get rid of your aging equipment or stretch it just a little longer to make sure you get every last penny out of it? These decisions take strong hardware lifecycle management.
Start your plan on day one
There are several different approaches to managing your equipment’s lifecycle, based on factors such as your company’s size, the number and locations of sites and your financial priorities. Experts say the most important thing about having a lifecycle plan, is to have one.
“Companies that are proactive in making hardware life-cycle considerations will derive a lot more value from their decisions than those that are reactively planning,” says Robert Houghton, president of Redemtech Inc., a Columbus, Ohio, outsourcer that provides asset management and lifecycle planning services.
For example, if a company decides that the desktop PCs it’s in the process of purchasing will last four years, it can then budget for the purchase of new equipment at the end of that period. By specifying a time frame for the usefulness of equipment, the company can plan to evaluate those systems before the end date to see if infact they have reached the end of their lifecycle, or if the time frame can be extended for financial reasons.
Planning “should happen when you’re buying the equipment,” Houghton says. “Make decisions based on the value of the hardware at the end of the equipment’s life, warranty provisions, user needs and capital resources of the company.”
Even though there are several off-the-shelf applications that will walk your company, step by step, through the stages of asset management, there is still no set approach that suits every company, claim many IT managers responsible for lifecycle management in their firms.
The larger a company is, and the more spread out it offices are, the more effort it will require to track its systems and evaluate when they should be replaced. Despite the basic guidelines on how long equipment should last, the answer is always “it depends”.
It depends on what type of equipment you are talking about. Smartphones and laptops tend to need to be replaced more often because of the abuse they take outside of the office. Desktop PCs last longer than smartphones and laptops but not as long as servers and other data center equipment. This is because hardware upgrades and changes happen so quickly for PCs that systems can become out of date in a matter of months.
Purchasing instead of leasing
PricewaterhouseCoopers, until a few years ago, leased the 30,000 laptops it needs for its highly mobile workforce. Since laptop prices have dropped considerably, the company has begun buying the systems outright. This means that, instead of simply following the terms of the lease, PwC’s IT department is now responsible for determining when to replace those laptops and how to dispose of the old ones.
The company expects their laptops to have a useful life of between 30 and 40 months, in accordance with PwC’s depreciation schedule says Michael Lechner, managing director of project services, who is based in Tampa, Fla.
As for data center equipment, those bigger purchases require more consideration.
“We’ll look at how the equipment has depreciated. I don’t want to replace it before then, and we won’t replace them just because they have depreciated,” Lechner says. “We wait for a reason, such as, if the equipment starts to fail or is no longer supported by the vendor, or we can’t get replacement parts.”
Determining the lifecycle of mobile phones is easier to deal with, according to Lechner, because PwC considers employees’ requests for new phones only when they are in line with service contract renewals every two years. Employees who don’t want a new phone don’t have to get one, but they become eligible for an upgrade every 24 months, he explains.
Large companies have more to manage
Very large companies often staff an entire department dedicated to tracking the lifecycles of their IT assets.
Financial services institution, Citigroup, has a 16-person team in the U.S. responsible for assessing the IT equipment used by more than 300,000 employees around the globe, according to Jim Brown, Citi’s senior vice president responsible for desktop asset management, who is based in St. Louis.
With the assistance of an asset management software package, the department has come up with lifecycle guidelines for its IT equipment. The guidelines are typically 36 months for desktop PCs and laptops and 60 months for servers, but not all of the machines in the company fall under those parameters.
“We get a list from our engineering group on a monthly basis, ‘Here’s what we have; here’s what’s going off the list,’ and make a determination,” Brown says. “The base lifetime is determined at the point of acquisition, when we know what the vendor says it will be, but typically it ends up longer.”
Brown’s team spends all of its time managing IT assets including phones, printers and monitors, in addition to computer systems. “In past lives, this has been a part-time job, where the employer says, ‘I want you to take care of this asset management thing,’” Brown says. However, this isn’t the case at Citi, where Brown works with financial departments to collect input, but his focus is solely on asset management, and his is the final say.
That dedication allows the team to explore ways that technology can improve the process of tracking an asset and determining where it is in its life cycle.