Tuesday, June 02, 2015

The true cost of computing

You may well be tempted by all those cut price offers that you see from computer companies but, there is a great deal more to the cost of running a PC or network than the initial price tag.

Getting started

Of course you may feel that you don’t need an adviser from the outset and that you can handle the technology yourself. But if there is any doubt in your mind about this at all it might be wise to reconsider. One good way to think about this is to make a rough calculation about how much your own time is worth. If you, as an owner-manager, hope to take out £50,000 a year in salary then a week of your time is worth roughly a £1,000.

So what does it cost?

Working out how much your investment in IT will save you is not easy, as it varies from business to business. Here is a rough guide to making your calculation and with a little effort you should be able to get some reliable figures. Firstly look at what you have in place today, how much that is contributing to the business and how much it is costing you. You then need to look at how much less time you will have to spend managing IT and keeping them up and running. Finally, you need to factor in the capital cost of the equipment.
Let us for example, say that you have 10 staff working on desktops that were purchased three years ago. On average these staff costs are £10 an hour and they work 40 hours per week; that’s 400 hours per week and a total labour cost of £4000.
Let’s assume that buying 10 new PCs and Office software will give you a 5% increase in productivity. This is an arbitrary figure but you are bound to get some improvement, as the new systems will be faster and have improved functionality, this figure can increase if your original computer equipment is older than 3 years and if you purchase more powerful PC systems.
That 5% would be worth £200 per week, or around £10,000 per annum so that’s a pretty good start. You will need to add into this the savings from your time, involvement in research £1000, supporting your staff on minor issues such as email and printing problems, this will be handled by remote support. Assuming you spend 2 hours per week helping staff this will equate around 12.5 days per year £2500. Then there’s peace of mind not having to worry about down time. You can look at other costs to, reduced maintenance, software licences savings and reduction in the amount of equipment you require, i.e. number of printers, servers etc. You then need to calculate these savings multiplied by the presumed lifecycle of the systems. In simple terms, assuming a saving of £13,500 per annum, the improvement will be worth £40,500- this will outweigh the initial cost of the upgrade and probably pay for itself within a year.

In summary

This is why it is worth looking in detail at the cost-reduction and life-cycle feature of systems when you buy them. At the power saving, reliability features, at warranty terms and conditions. The overall savings you will make will be much greater if systems cost less to run and deliver better reliability and performance.

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