Posted by: S R Balasubramanian
client refresh, IT budgets, procurement
Nowadays, all office employees are provided with a system—either a desktop or a laptop—to carry out their work. While such equipment is added whenever new employees join the organization, old systems are replaced with new ones (as and when they become due). On this front, certain organizations do have a very clear policy for replacement, but many don’t.
It is necessary to define clear rules for refresh and also convey them to the organization at large. Users are often tempted to ask for a replacement because their colleague might have got a new machine with better features. This request often comes in the form of false complaints which incline towards a plea for a replacement.
Rules of replacement vary across organizations. While some specify a fixed time period for retiring old assets, others specify a batch that would be replaced. The time period for retirement also varies between three to five years. In fact, many such rules may often not be based on scientific assessment.
I have heard of such debates in organizations during times of stress—for example, in times of recession or when the company’s business and finances are under pressure. At such times, business questions the rules for replacement, and often asks for extension of the period. This is again an ad-hoc measure, and not based on sound judgment.
There have been several studies made on this subject. I recall a Wipro case study which pointed out a few factors to be considered for the purpose. For instance, if the ideal period to retire a client machine is three years, then the following considerations are necessary:
- The PC usually comes with a three year warranty. Therefore, we will have to opt for an annual maintenance contract (AMC) after this period
- Beyond this period, we generally face work disruption due to failure of parts. For example, often laptop displays start giving problems, batteries die out, and CPU (or RAM) needs replacement.
- We spend on repairs, spends go up, but all these don’t enhance the resale value. The total cost of ownership goes up.
- Delay often causes problems in terms of compatibility, For example, it could be in the form of not being able to read files created in a higher version by other colleagues. Or it could be in terms of difficulty faced in installing the newer version of a software package.
- If we replace with a new machine, we get a three year warranty, and therefore save these costs.
We may often be tempted to defer replacements, thinking that we have saved in terms of spends for the year. However, when considered from a long term perspective, we may perhaps find that this was not the right decision.