When it comes to refreshing IT equipment, organisations who pay cash for tech assets are often bound by the balance sheet, as Chief Technology Officers (CTOs) and Chief Financial Officers (CFOs) clash on what is an appropriate length of time for a refresh cycle.
“Is it still working?”
“Good. Let’s talk in 12 months.”
This will be a familiar conversation to CTOs across public and private sectors, with CFOs unwilling to part with cash to replace an asset which is ostensibly fully operational. Meanwhile, the CTOs three-year refresh cycle plan is extended to four years, then five, then six, until there is no choice but to replace the asset.
Don’t sweat it
We get it. IT isn’t cheap and it depreciates quickly. Within three years it’s a free asset and, on paper at least, it makes sense to sweat it. But this can also leave the business exposed.
Old kit, that gives users a poor experience reflects badly on the whole of a business, and most especially their IT department. The longer you keep an IT asset, the slower it performs – how people work is evolving rapidly, simply sweating assets for long periods of time reduces productivity. Older assets require more TLC, so expect a higher call volume to already overworked IT departments. And, importantly, IT hardware older than three years can present a significant cybersecurity risk, as we explore in detail in this blog.
It’s also an unsustainable way of managing end-of-life IT at a time when most organisations are investing in sustainable measures to help achieve net zero ambitions. Read more about that in our blog about IT sustainability here. It is important to note that the British Government has a target of a 68% reduction of emissions by 2030 and by 78% by 2035 – its goal is for net-zero emissions by 2050!
So how do organisations address these challenges and bring the boardroom back together in peaceful harmony? It’s simple – spread the total cost of IT investment over the lifespan of the asset, with additional IT services as part of the package, including sustainable refurbishment and disposal at the end of cycle, as part of a regular, cost-effective technology refresh that keeps you protected amongst increased cybersecurity threats.
Ripping off the plaster
Device as a Service (DVaaS) changes IT investments from CapEx to OpEx and is being deployed by private and public organisations in all sectors to help CTOs ensure regular technology refreshes, whilst keeping the CFO happy with one fixed monthly cost and measurable savings, to help manage the cost of an asset over its useful life.
A defined start and end point – typically three years – ensures CTOs deliver better IT whilst protecting the CFOs balance sheet. No longer is half the IT budget being used on temporary sticky plaster fixes to an ageing IT estate.
What’s more, DVaaS is boosting sustainability programmes by ensuring sustainable, compliant recycling, all of which is part of the all-encompassing managed service, along with other IT services including design, imaging, asset tagging, and break/fix.
Some of the world’s biggest, best, and fastest growing brands owe success to a subscription-based model – and this is becoming more and more prominent in B2B industries like IT. This has been accelerated by the Covid-19 pandemic, both in terms of working styles and cashflow.
Post-Covid budget management
When you pay cash, you don’t know how much your IT will cost until it leaves the business, whereas with DVaaS you have predictable known costs locked down to a specific period. This is particularly useful in the post-Covid era, organisations need tighter budget management and simplified IT delivery. DVaaS enables a continued, rolling refresh which also aids user satisfaction and can help to attract and retain talent in a competitive marketplace, in addition to the security and sustainability benefits.
SCC’s DVaaS team has more than 30 years’ experience and works with a diverse portfolio of clients to help save money and better manage IT. Where organisations have already made costly, long-term investments in their IT estate, we offer a value resale service to enable your estate to be fully captured. We buy back your existing IT estate, to release capital back into the business. The current value is returned to you and repayments are then made in line with remaining useful life.
Find out more about DVaaS by SCC and how we can help you here, or if you have any questions please complete the form below and we will be in touch.
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Tags: budget management, CapEx, device as a service, DVaaS, end-of-life IT, it budget management, IT recycling, OpEx, refresh cycle, sustainability