The halls of technology managers are full of better ideas: Centralized or Decentralized? Cloud or On-Site? Android or iPhone? Today we’re going to pick up a topic that tends to divide the crowd just as visibly… Planned replacement vs failure replacement.
By Steve Tylock
Planned Replacement
This is the boring option. Plan the lifetime of all technology and replace it on a schedule. The expectations are that service is more stable, turnover predictable, and costs manageable.
Failure Replacement
This is certainly the exciting option, run equipment until it fails! Eek, every last ounce of usefulness out of each expenditure. The expectation is that service may have a bump at the end of a piece of equipment’s life, but by using it until the bitter end, the expense will be minimized.
Basis for Comparison
Cost and Risk. There – that’s the answer – if you thought this article was going to wade in about the quality of life, employee satisfaction, or strategic direction, you were mistaken. We’re just going to boil things down into hard cash. And I’m not even going to discount cash between this year, next year, or 5 years from now – even though we know today’s dollars are worth a little more than tomorrow’s.
Let’s go with an example on the life of a PC.
Cost of purchase – hardware, operating system, applications.
Cost to setup and replace an existing system – labor.
Cost to maintain – patching, security, support, repair.
Add those costs up over the life of the system and divide by that life to give a “cost per month” of running equipment.
Basic Business PC
While it’s true that some percent of computers get devoted to specialized use, we find that most of the equipment we provide to customers are used by an office worker. That office use includes email, web, video conferencing, and document/spreadsheet/presentation creation/editing/reading.
Such use can be done with a standard desktop PC configuration that may cost approximately $1,600. (Plus/minus depending on a lot of factors, but let’s just use this, ‘eh?)
The task involved in setting up a computer includes unboxing, connecting, configuring, installing software, and migrating a user from their previous system to the next. We’re going to call this 3 to 5 hours of labor and give it a value of $400.
And lastly, there’s the cost to maintain a computer. This includes making sure it stays up to date with software patching, is protected from viruses and malware, and alerts are addressed. It also includes assisting the user with issues and responding to breakdowns – be they software or hardware related, and either remotely fixed or addressed on site. Let’s give this a value of $100 per month per PC.
System Life
A business PC like this can be expected to give several years’ worth of productivity, and the quality of systems does matter. We’ve found that a business-class PC can certainly be expected to run for 3 years, will probably run well for 4, and possibly run for 5.
Our recommendation is to replace PCs after 4 years. Wiggle room allows for 3 and 5 year planning – some organizations want top speed for all people at all times. Others want to get a potential fifth year.
But PC hardware kept longer than that tends to fail…
Standard Planned Life Cycle
So we’ve got that hardware mentioned above, supported for four years – that’s a total cost of $6,800. (and this is where you get to understand that the actual cost of the new computer is not the biggest cost of computer ownership…)
That means that the monthly cost of providing a computer to an individual is $142/m.
And as a result of this planning, each person that needs one will always have a computer available/running/performing-well.
Random End of Computer Life
In this scenario, we’re going to suggest that there is some sort of “event” with an old computer that defines its end of life. A hard drive fails, software flakes out, a driver can no longer be secured.
And we’ve going to say that in this hypothetical world you can enjoy the computer for twice as long – magically these things will run for 8 years. (woo hoo!)
But you still have to pay for and support them, for those 8 years.
But here are some side effects…
When a computer fails, (if you’re lucky) it completely fails all at once. If you’re unlucky, it partially works, fails to work well, or is inconsistent. Let’s say that 2/3rds of the time it fails completely, and just 1/3rd of the time it takes 1 week to fail. And no matter how you slice it, support isn’t going to be covering your old hardware failure service call, let’s consider that an unexpected 3 hr service call…
The end-user is going to be unable to use the system for at least a full day. (This is magical thinking – the replacement PC is at least a week away, but we’ll wave a magic wand here.)
The PC that is purchased to replace the failed unit will be more expensive because instead of getting the exact system that meets the requirements, it will be the least expensive system that meets the requirements and is available in stock for immediate shipment. It will be shipped overnight (or you’ll hear a comment about user lost time not being kept to a minimum). The labor to setup/install may be increased due to working overtime/off-hours/rush to get the system in place.
There’s potential that additional software will need to be licensed/re-licensed/upgraded/researched/installed.
And important work that needs to happen will be delayed.
And stress levels that will become elevated.
So let’s just take the hard costs: an out-of-scope three-hour service call ($360), one day of an employee’s salary at $40/hr ($320), and higher replacement costs ($320).
So the cost of that hardware, plus the regular service, plus the end of life costs comes to $12600 or $131 per month.
So there you have it, the accountants will tell you that running a desktop PC twice as long as it’s planned life will save $11 per month per PC.
Difference in Risk and Quality
Ok – I said I wasn’t going to go all “quality of the system”, because who could possibly get reasonable productivity out of an 8-year-old system.
So let’s look at the total value saved over those 8 years (at $11 a month) – that’s $1032.
If you lose just a thousand dollars of value by:
– having a longer disruption before the user gets a working computer again
– have an employee whose value to the company is more than $40/hr
– find employees that are forced to use such equipment decide they want to work elsewhere
You’re going to end up in the red over the decision to run equipment until it fails. Delays and expenses, downtime, and potentially even employee onboarding expenses.
Your call
As a partner, it’s my job to make sure my clients get the benefit of our combined experience, training, and wisdom. At the end of the day, nobody can force you to take action, we’ll implement the plan of your choice.
But consider that I’ve worked with the rosiest of pictures of holding on to equipment – and it still isn’t a clear win.
We haven’t explored lowering employee stress, supporting them with useful tools, and showing how much you value their effectiveness.
PS – replacing infrastructure is just as important as PCs – especially since everyone depends on it…
In the Rochester area, CMIT Solutions provides local, responsive IT support and technology services for small to mid-sized businesses. As your IT partner, we ensure systems are running, your data is secure, and your staff is productive. Backed by a national system, we have over 200 locations across the country with local ownership in Rochester.
Steve Tylock is a systems infrastructure professional with broad information technology experiences in servers, desktops, networks, security, applications, team development, and solution architecture across the domains of business, education, government, and manufacturing. He specializes in analyzing environments leading to strategies and plans for growth and excellence.
