Maximize the value of IT assets from procurement to disposition Neil Peters-Michaud April 18, 2012 Proprietary and Confidential Topics Understanding the TCO of computers Optimize the economic and environmental lifecycle of IT assets Tool introduction EPEAT product catalog Life cycle costing worksheet 2
Proprietary and Confidential What goes into the cost of a PC? Total Cost of Ownership is a method for the systematic accounting of all costs (direct & indirect) related to IT investments The initial purchase price is relatively small part of total cost or owning and operating IT products. Networked PC costs: $13,200 annually 15% purchase, 80% operations, 5% disposal (Gartner) 3 Proprietary and Confidential
Examples of Costs Life cycle Costs Acquisition & Procurement Hardware purchase or lease, including all accessories Software licenses Admin costs (bid specs, contracts, tracking purchases, delivery, installation) Operations &
Maintenance IT and personnel training IT support such as network and software management, help desk Internet, energy, furniture and floor space costs Software & hardware upgrades & related staff downtime Disposition costs Admin costs (asset management, inventory tracking, contract services) Sanitizing data Storing, shipping and disposition costs
4 Proprietary and Confidential IT Lifecycle survey of practitioners IBM/Wipro PSA analysts gathered detailed data from large enterprises in 2009. (50 North American, 25 UK, and 25 German companies) on the costs of PC management and current refresh practices The analysts selected a set of key cost drivers from the analyzed customer data and modeled the projected costs and benefits of maintaining refresh cycles, buying mobile PCs, and upgrading to new technology. Analysts then translated the findings into a financial model that quantifies the value of proactive refresh
rates, mobile PCs, and Intel vPro technology. Participant Screener Wipro interviewed 106 participants who were screened for the following profiles: IT/IS Titles such as CIO, VP/Director/Manager of IT Involved in the management or deliver PC support services, such as remote/on-site support, PC management Understand the costs and technical requirements of providing PC support services
Participant Industry and Firmographics Organizations with: 5000+ PCs for North America and 2500+ PCs for Europe At least 25% mobile PCs Must handle at least some aspects of PC support with internal IT staff After 3 years, Mobile PC support costs exceed $1100, making it less expensive to refresh Mobile PCs in Year 4 experience a 59% increase over year 1 support costs
Cost Drivers Updating PCs PC Diagnosis and Repair Isolate and Recover Infected PCs Source: Wipro Consulting Product Strategy and Architecture Practice primary research with 100 US and European companies, March 2009 Hard Disk Failures Mobile PCs deployed on a three-year cycle offer the lowest total equivalent annual cost
The Equivalent Annual Cost of owning a Mobile PC is lowest for a 3year lifecycle indicating that a 3year refresh is the optimal refresh option for Mobile PCs *TCO comprises of the PC Acquisition Cost, Support Costs (including the costs of Updating PCs, Diagnosing and Fixing PCs, Isolating and Recovering PCs after a security incident), and Out of Warranty Repair Costs After 3 years, Desktop PC support costs exceed $600, making it less expensive to refresh Desktop PCs in
Year 4 experience a 59% increase over Year 1 support costs Cost Drivers Updating PCs Diagnosis and Repair PCs Isolate and Recover Infected PCs Source: Wipro Consulting Product Strategy and Architecture Practice primary research with 100 US and European companies, March 2009
Hard Disk Failures Desktop PCs deployed on a three-year cycle offer the lowest total equivalent annual cost The Equivalent Annual Cost of owning a Desktop PC is lowest for a 3year lifecycle indicating that a 3year refresh is the optimal refresh option for Desktop PCs *TCO comprises of the PC Acquisition Cost, Support Costs (including the costs of Updating PCs, Diagnosing and Fixing PCs,
Isolating and Recovering PCs after a security incident), and Out of Warranty Repair Costs Optimize economic and environmental benefits to reduce TCO Costs related to energy use, upgradeability, service/maintenance and disposal affect the environment similarly 12 Proprietary and Confidential EPEAT Electronic Product Environmental Assessment Tool (www.epeat.net)
Voluntary environmental performance standard for computer desktops, monitors, laptops and (soon) imaging devices Addresses multiple environmental attributes Three-tier rating system: bronze, silver & gold Verification process to ensure conformance 13 Proprietary and Confidential EPEAT acceptance Large number of available products Searchable web database Over 1,900 products and 30 manufacturers
All federal agencies ($70 billion/year) Private sector users: KPMG McKesson Kaiser Permanente 14 Proprietary and Confidential TCO Worksheet This TCO Calculator Tool allows users to compare the costs of different options for the life cycle management of IT equipment with an emphasis on decisions that may have an environmental impact. For example, what is the annualized cost of purchasing ENERGY STAR qualified equipment compared to a conventional
unit? What will be the cost savings of extending the period of use for equipment from 4 years to 5 years, or purchasing only desktop processing units and keeping the current desktop monitors? Microsoft Office Excel 97-2003 Worksheet 15 Proprietary and Confidential Best practice discussion 16
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