How to find the best deals to switch to better tech in 2010 – Séamus Byrne gives you the keys to choosing the right time to upgrade, and how to find the best deals for your business.
If you want your business to grow well, you'll need to regularly upgrade infrastructure, such as computers and phone systems, to take advantage of new technologies and to replace worn-out or obsolete hardware. You're not alone if you're concerned that any infrastructure upgrade could be a costly, complex process, but delay without good reason can cost your business even more.
In a perfect world we would buy all the equipment we needed for a business at start up and that would serve us faithfully and reliably for decades. Once upon a time that was actually close to the truth. Today, technology advances like an ever-rising tide. There is no cut and clear ‘right time' to move, but wait too long and your business could drown.
Managing your upgrade cycles on technology—computers, software, printers, phone systems, even car fleets—is an area few small businesses have hard and fast plans for. For many, simply following the life cycle of financing agreements is the sum total of their process for when they schedule any upgrades. If that sounds like you, read on and build a useful plan for when and how to best upgrade your business.
Hurdle 1: Let's wait a little longer
Switching out equipment in volume can seem needless on the surface. If it still works, why spend money? In a tight economic scenario, infrastructure seems a low priority area for new investment. The urge to push back an upgrade cycle by ‘one more year' is hard to resist.
There are, however, hidden costs attached to sticking with the status quo.
In a March 2009 white paper on re-evaluating PC hardware replacement strategies, Gartner analyst Leslie Fiering finds extending the life cycle on computer hardware means a number of trade-offs. Here's an outline of the issues with delaying computer upgrades:
- Higher maintenance costs and support requirements as end of life approaches. Hardware becomes worn down from use, dust; other pollutants collect inside the case; and the high running temperatures take their toll, too.
- Business flexibility may be limited if older hardware cannot properly support new software. You buy new software to improve productivity and extend your capabilities. You won't get any of those benefits if your older hardware isn't up to the job – in the worst cases, the software won't just run poorly, it simply won't work. Anyone who has installed a new operating system on an older computer is already familiar with this frustration.
- Existing finance agreements may end up being costly. If you hold onto older computers past their useful life cycle, you may find some finance agreements incur extension fees or are priced beyond what the equipment is worth at that point.
- Increased security risk as staff ‘replace' old equipment with their own. A less obvious trade-off as company-supplied systems age, staff may feel their productivity is compromised and will instead bring their own laptops or other devices into the office network, reducing your control over exactly what goes on inside your business firewall and acceptable computer use policies.
Hurdle 2: We don't have the funds
Few technology infrastructure projects should ever be viewed as ‘assets', so many experts point to leasing as the best way to deal with your infrastructure needs.
"IT equipment has little real world residual value," says Dave Stevens, managing director of business IT consultancy Brennan. "So there is no sense in a business investing cash into a major upgrade, taking an ownership position, and seeking to depreciate those assets over time. An operating lease or rental offering provides businesses with a range of flexibility, by enabling them to upgrade their technology and refresh it at the end of the term, or even do a mid-term upgrade."
“IT equipment has little real world residual value … so there is no sense in a business investing cash into a major upgrade”
A young small business may find consumer-level financing arrangements the simplest place to start, but the terms and rates associated with such finance are even less attractive once the business starts to scale.
Upgrade planning is a good time to review your financing terms. Use some online comparison tools to find a better deal, or to be well informed if looking to renegotiate current financing terms. Some will even offer explicit mid-term upgrade options, which is an excellent facility in a growing business.
Should you start your upgrade now?
Some infrastructure categories have come on strong in recent years, with major advances in technology that make significant benefits available to those who move sooner rather than later.
Dave Stevens, managing director at business IT consultancy Brennan, sees recent advances in computer hardware, across all categories, as highly beneficial to business users. And it's not just performance improvements.
Switch#1: Move to server virtualisation
"Desktops and servers are exponentially more energy efficient than they were even just two years ago," Stevens says.
"In the server space, businesses that choose to undergo server virtualisation on new platforms, which are both more energy efficient and far more powerful, could potentially see a return on investment inside 12 months," Stevens says. "Server virtualisation also reduces the time required to physically maintain a fleet of servers and simplifies maintenance by enabling all virtual servers to be managed through a centralised console."
Switch#2: Swap laser for inkjet printing
Business printers are also delivering significant efficiency and energy improvements that can quickly pay for themselves. In may cases, new printer deals offer remote consumable monitoring functions that let the supplier maintain the equipment for you. For instance, recent progress with inkjet technology is offering cost and quality benefits over laser, which has been the focus of business printing for more than a decade.
Switch#3: Use your broadband for VoIP phonecalls
Phone systems are another rapidly advancing technology, so a shift to VoIP technology could save a business thousands on hardware and in monthly call costs. By making an associated upgrade to your broadband infrastructure your general network performance will benefit, too.
Switch#4: Move from hardware-installed to web-based software
Software is also on the move, with many business tools now available as web-based cloud computing packages. In CRM, marketing and collaboration categories, a transition to online software will often improve per-seat licence fees, and remove costs attached to the physical process of setup on new computer hardware and running software upgrades. Cloud software is often upgraded far more frequently than similar desktop options, so your team will benefit from regular streamlining and additional features.
Often, it may not be a question of money when it comes to an upgrade, but time. If the thought of having to fit in an office upgrade seems overwhelming, ask your staff for help. What's their experience using the technology you already have? Can they suggest any improvements? After a review of their considerations, you may find making the necessary changes less daunting. Indeed, it may give you the inspiration you need to go ahead right now.
Five tricks to smarter upgrade plans
- Gartner recommends maximum life cycles of three years for road warrior notebooks, four years for office-based notebooks, five years for general office desktops, and six years for task-specific desktops.
- RAM and hard drive upgrades can offer easy short-term wins for computer life extension.
- When extending mobile computing life cycle, keep ‘hot spare' notebooks ready to go to mitigate higher risk of failure.
- When moving to VoIP, consider soft phone installs to remove the cost and maintenance attached to physical handsets.
- Networked multifunction printers can now act as the office copier/scanner/fax/printer, reducing footprint and maintenance demands.
Finding your ideal upgrade solution
A 2008 Gartner report titled To Upgrade or Not to Upgrade: That is the Question recommends any upgrade or replacement decision be examined from four viewpoints:
- Business value: Ensure the upgrade provides some meaningful value, whether in capability improvements, cost reductions or as a positioning move to gain future capabilities.
- IT infrastructure needs: Upgrades that modernise infrastructure should address cost improvements, system reliability and improvements in the ability to deliver, as wellas keeping current through a general technology refresh.
- Business risk: Weigh the benefits and risks of retaining an ageing release against those of upgrading, particularly when the upgrade does not provide immediate value to business.
- Optimal timing: Factor in the benefits and risks associated with the timing and sequencing of the upgrade or replacement, particularly if your organisation is in a growth or acquisition phase.