Oct 27 2010

Are You Really Saving Money With Old Technology?

SMBs may find that managing the company with newer IT equipment saves money in the long run.

The U.S. economy is showing signs of recovery, and all eyes are focused on small and medium-sized businesses, the nimblest and most innovative sector with the greatest potential to accelerate the economy. As SMBs prepare for growth, many believe that continuing to use older technology will save money until times get better and credit is easier to find. That perception is a myth: Over the long term, managing with old equipment can cost more than upgrading to new technology.

In a recent report, research firm Gartner said that “the long-standing best practices for PC hardware replacement — notebooks every three years and desktop PCs every four years — should not change for long-range budget planning. In reality, it is always possible to extend the life of a current installed base of systems. But if the planned replacement cycle is extended too far, then there will be no budget in place should systems need to be replaced prior to their target replacement date because of high-than-expected failure rates, insufficient performance or any other unexpected factor.” Using up-to-date technology is one of the most important ways SMBs can improve productivity and move their businesses forward.

The 2009 economy not only forced the closure of many small businesses; it also drove layoffs at companies that survived. Because many SMBs delayed upgrading their IT equipment in 2009 because of the slow economy, they now need stronger productivity tools than ever to compete. Windows 7 is an obvious reason many SMBs will consider renewing their technology, along with updated multimedia requirements and the need for increased hard-drive capacity. However, SMBs with a smart IT plan will consider additional holistic factors before they purchase.

Trade-in Options

Many SMBs considering PC replacement will weigh when to replace versus upgrade, look for environmentally responsible ways to dispose of old hardware and review how to calculate the ROI of new technology investments. These used to be daunting tasks for companies that lack a dedicated IT department, but trade-in programs can make this simple. In addition to offering customers cash-in-hand for their old equipment, trade-in programs offer competitive payment terms on new products purchased. Results can also include brand-new equipment for no extra capital outlay, renewed warranty services and environmental responsibility.

Lease Instead of Buy

In most cases, monthly lease payments for new desktops or notebooks are less than the depreciation cost of the old equipment. Leasing new equipment lets customers effectively manage cash flow and take advantage of productivity gains from the latest technology.

Financing is another area in which SMBs can benefit. Many PC manufacturers now offer compelling, flexible lease terms for purchases as low as $1,500. 

Service and Support

Buying new technology is only half the equation. Technology manufacturers should foster an ongoing relationship with their customers beyond the purchase. How can your PC manufacturer help you once your equipment is up and running? Does it offer help-desk services and support? Will it help you migrate to Windows 7? SMBs should consider the end-to-end life of their purchase and choose a technology provider who will partner with them for the entire cycle.