CXO investigate

Hardware hassles? Time to make it someone else's headache

Too many organisations give little thought to the lifecycle of hardware - from acquisition through deployment to disposal. That lack of management may be costing them more than they realise.

It's when disposing of hardware that a managed approach to the IT lifecycle can produce the biggest savings. Photo: Shutterstock

For most organisations, the lifecycle of IT equipment is straightforward: buy it, provision it, run it, deprovision it and dispose of it. Simple and reasonably effective.

However, unless it's handled carefully, it's an approach that could be doing organisations a major disservice. Starting with purchasing, for example - just how good a deal is your business getting?

Assuming your organisation is a mid-sized one and it buys a few hundred to a few thousand servers per year, then the costs will be considerably lower than the list price. But is the organisation getting the same deal as one that buys tens of thousands of servers per year?

Doubtful - and when this is taken across the whole IT estate - servers, storage, networking equipment, desktops, laptops, printers, multi-function devices, maybe even smartphones and other devices - the cost differential can be significant. One option here is to use a managed IT lifecycle management partner to bring economies of scale.

In the running of the equipment, again there are economies of scale from provisioning equipment before delivering to site. Maintenance, repair and operation costs can be driven down through shared resources and cheaper spares, again driven by the scale of purchasing.

But it's at disposal that you can see the real savings. Most organisations run their IT equipment until it's relatively useless to the business. The equipment will have been written off at the book-value level, and in Europe the Waste Electronic and Electrical Equipment (WEE) directive means the equipment cannot just be dumped, so there's generally a hefty cost involved in its disposal.

For those with a discrete equipment disposal process, the costs associated with getting rid of storage securely can be significant.

Funds from hardware disposal

However, if the disposal is linked with the overall lifecycle management process, expense can not only be minimised, but the equipment may have a value that can be used to offset costs - and even, in many cases, provide additional funds for new equipment.

Each item of equipment has some inherent value. That value is affected by various factors - for example, obviously over time it will progressively fall. The launch of a new model will also push down the value because organisations won't want the old version, which others will also be dropping causing a glut on the second-hand market.

A change of technology - for example, the greater adoption of 100GB Ethernet - can force down the value of equipment that cannot support the new standards.

A good managed IT lifecycle management partner should be aware of the timings of these variables and advise on the optimal inherent value of a specific piece of equipment. By deprovisioning it and disposing of it in a secure manner and then selling it on as a working piece of equipment, as a bare-bones system or for parts, the money can go towards replacing it with new equipment.

Intelligence on future releases

Managing this set of variables effectively is not easy. The IT lifecycle management partner requires solid ongoing relationships with technology vendors to know what's coming down the line.

They need good purchasing agreements to secure the best acquisition costs. They also must understand the legal aspects of equipment disposal and of secure data destruction. They also require solid technical skills in provisioning and running equipment.

Choosing the right IT lifecycle management partner can ensure the organisation always has the optimal IT platform through the replacement of equipment at the right time with the best overall cost equation in place. Having an optimal IT platform available means the organisation should not be constrained by IT - and allows it to compete more effectively.

Lifecycle management should not be regarded as a nice optional extra. For those organisations that see IT as core to their business, it should be a necessity.

You can download Quocirca's free lifecycle management report on the various stages of an IT maturity model and what is involved in putting in place a full management approach.

About

Clive Longbottom is the founder of user-facing analyst house Quocirca. As an industry analyst, his primary coverage area is business process facilitation.

3 comments
HypnoToad72
HypnoToad72

Take ownership. After all, and mind the tangent, we used to get software that worked perfectly out of the box. Somewhere along the line, people decided it was okay to get half-baked stuff and wait for fixes. QC was also "delegated" to us, to send bug incidents - making us low-cost QA people. No-cost, actually, or the other way around since we bought the software and have to test it to. Is our time not valuable as well? Demand companies stop "delegating" and doing things on the cheap. There's more on this planet than the profits made at our expense.

info
info

I'm the sole IT guy at a small (but technically 'mid', I thought) company, but I've worked with much larger organizations, academia and government before. At no time have I ever encountered the buying of 'thousands' of servers a YEAR... What would be your idea of an 'Enterprise' or 'Large' company? You're also forgetting about the inevitable markup these management places charge that all but negate any cost saving benefit from the lower prices.

michaellashinsky
michaellashinsky

Apparently it wasn't just me that was skeptical about this.