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IT Value, Stop Looking at the Price Tag!

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IT Value, Stop Looking at the Price Tag!

Some of the latest research from Microsoft and Intel suggests that the cost of keeping a PC more than four years old is AU$5,012.

It also reveals that machines over four years old are over three times more likely to need repairs leading to a loss in productivity. Suspicious?

We might, of course, look at this report and think that a PC and chip vendor have colluded and massaged a set of numbers to encourage us all to go out and buy their excellent range of new hardware. And that may well be the case.

However, there’s no smoke without fire, and the reality is that this is merely the tip of the iceberg. If we take a peek below the surface, we’ll find that there is very much more to see.

More than meets the eye.

Whether Microsoft and Intel’s numbers are ‘the truth’ or not, there’s no doubt that old hardware wastes time and money, and 71% of respondents to their survey agreed that a newer PC made their staff more productive.

But efficiency, as important as it is for Small Business, isn’t the only consideration when it comes to maximising the value of your Information Technology (IT) investments.

Of greater concern may be the effect on staff turnover, morale and the general happiness of the team.

Business owners should be acutely aware that a failure to provide up-to-date tools for their team does little to make them feel valued. Despite this, staff are often left using PCs that are older and slower than the one they have at home, something that is guaranteed to make a day at work far less appealing.

This is particularly pertinent when you consider that poor working conditions typically encourage higher quality staff to leave, leaving you with those of a lower calibre. Combine that with the cost of replacing a staff member, which is very conservatively estimated at 50% of annual salary, and you might conclude that $5,000 is likely far less than the real cost once all other factors are taken into account.

Flawed logic.

For many, IT is simply seen as a cost of doing business. It’s no wonder then that every time a renewal comes around, the purse strings are tightened, and the team is left to make do for another year. However, such an approach is a false economy.

When you buy tools for your business, you’re buying assets that will enhance the performance of your team. Just as a jackhammer replaces a pickaxe, so a PC replaces a calculator and typewriter. By forcing your people to use an older, slower tool rather than a newer, quicker one, you’re making them less efficient and costing yourself far more money than you would actually spend.

Yet for most the cost of providing a brand-new replacement will be no more than $2,000. Yes, it’s a decent amount of money, but when you consider that the average wage is c. $80,000, the employee using it will cost over $300,000 for the next three years by the time all sundry employment costs are included.

Spending an additional 0.6% of their wage to ensure that they have up to date tools would seem to be a solid investment then.

Understanding IT value.

Unless you have the simplest of operations, your business is digital. Don’t believe me? Turn it all off and see what happens. Importantly, your competitors are too, and there’s every chance that they’ll be trying to make the most of modern technology.

This means you have a choice:

You can embrace all that the fourth industrial revolution has to offer and regularly invest in IT assets that will deliver value year on year, or you can join the race to the bottom?

Like it or not, your IT assets are critical to your success, so stop looking at the price tag and instead consider how much value it can deliver.

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