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Small-business owners are renowned for their ability to stretch a dollar when they have to, but there are times when saving a little now can cost you a lot more later on. Trying to conduct business with technology hardware that has outlived its usefulness is one of those times.

Aging hardware imposes a variety of direct and indirect costs that can chip away at cash flow and productivity, often without your even being aware of it. More than a third of small businesses in a recent Techaisle study were found to be working with PCs that are at least four years old. These older computers are more prone than newer models to crashes that can result in the loss of critical data and leave employees twiddling their thumbs for extended periods.

The Techaisle study found that small businesses spend an average of $427 to $521 per PC on repair costs for machines that are four years old or older. Those PCs also are more likely to require upgrades as the number applications running simultaneously (an average of eight for small businesses) continues to climb. Each year, 25 percent of older PCs used by small businesses require upgrading at an average cost of $134 each.

“Stealth” costs can reach $1,500

In many cases, the combined costs of repair and upgrade can exceed the cost of a new computer. Techaisle calls this a “stealth” cost that drains cash flow and adds to the operating cost of a small business. The best way to avoid this cost - which Techaisle pegs at more than $1,500 a year per four-year-old PC - is to assess your equipment capabilities on a regular basis.

For starters, whenever you consider a software purchase or upgrade, you should automatically review your hardware’s ability to meet the requirements set by the software vendor. However, they tend to be the bare minimum required for the software to function, says Tysen Landmesser, IT director at Accumold, a manufacturer of microscopic critical components. To ensure optimal performance, he usually specs hardware performance characteristics at least 50 percent better than the software vendor’s minimum requirements.

A severe hardware malfunction or total failure is an obvious trigger for immediate replacement, of course, but Accumold also maintains a regular upgrade schedule for all its hardware. It replaces PC-based technology such as desktops and laptops every four years, and server and network gear is upgraded on a five- to seven-year schedule. “By using a schedule, we can reasonably control costs,” Landmesser says. “It allows us to stick with a consistent budget while at the same time making sure our gear isn’t bogging down employees from doing critical tasks.”

Signals that it’s time to upgrade

Erik Day, vice president and general manager of Dell Small Business, says the need for a hardware upgrade can also be signaled by these conditions:

  • Hardware is impeding productivity because of crashes or slow performance
  • You are running “legacy” operating systems, such as Windows XP or Windows 7
  • Your systems are “end of life” and no longer supported by the manufacturer
  • Your systems have an inactive warranty
  • Replacement parts become difficult to find
  • Repair and maintenance costs equal or exceed replacement cost

One approach that can help small businesses maximize hardware service life without jeopardizing optimal efficiency and performance is to group end users based on their computing needs and software standards, suggests Daniel Schneider, vice president and CTO at PCM, a large tech solutions provider and Intel North America Partner of the Year. “You can establish a refresh cycle for each group based on the cost of maintaining the endpoints and any changes that occur with the mix of applications used by each group.”

Whatever approach you take to upgrading hardware, it should not be done in a vacuum. Consider decisions around hardware and software as a single continuum. “Organizations that align in making decisions based on this continuum have happy end users and can lower the overall cost of support,” Schneider says.



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