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Just One More YearWhy 2013 – not 2014 – is the Time to Refresh Your Company’s PCs

The great recession of 2008 and the uncertain recovery that followed have forced companies of all sizes to extend the usable life of their desktop and laptop PC inventories in an effort to minimize IT costs.

But, as both hardware and software extend into their fifth year of life or more, a number of hidden costs related to the support of these aging architectures begin to creep onto the balance sheet.

The purchase price of a PC represents only a portion of its actual cost over the entire lifecycle, of course. There are also costs associated with:

• Deployment• Securingandprotectingthedevice• Managingsoftwareupgrades• Hardwareandsoftwaremaintenance• End-usersupportduringmaintenanceorcutoverperiods• Extendingoutdatedwarranties• Managingsoftwarelicenses• Ongoingenergyrequirementsneededtorunthemachines

PC LifeCyCLe Cost ManageMent

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In many cases, the resources needed to prop up the old systems for another year can meet or exceedtheinitialexpenseofreplacingtheexistingPCswithstate-of-the-artsystems.Withthatin mind, this report is intended to help enterprises understand and take into consideration the completecost-benefitanalysisassociatedwith“makingdoforanotheryear”versusrefreshingyour hardware in the next 12 months.

To assist our clients contemplating a PC refresh in the next 12 months, Insight has developed twoscenariostofullyoutlinethecost-benefitanalysisofeachdecisiontorefreshornot.

The first scenario is designed for a largely mobile workforce with laptops comprising 60% of all employee PCs. The second scenario represents a more static workforce with 80% desktops and 20% laptops.

The Intel® Total Cost of Ownership (TCO) CalculatorBoth scenarios rely on Intel’sPCTotalCostofOwnershipEstimator to create the tables and charts on which the scenarios are built.

The default values used in the scenarios were derived from interviewsIntelconductedwith106mid-sizedandlargebusinesses, but anyone may include their own data for real-worldanalysis.

SavingsfromaPCrefreshwillvary,dependingonthe:

• TotalnumberofPCs• Ratiooflaptopstodesktops• AgeofthePCs• ITpractices• ITsupportinfrastructureandcosts• Energycosts• OtherindividualmetricsinyourITenvironment.

Ifyouareinterestedinconductinganaccuratecost-benefitanalysisbasedonthespecificmetricsofyourbusiness,Insight’sTCOexpertsarereadytoassist.Justcall1.800.INSIGHT to find out more.

A Word about Intel’s vPro™ TechnologyManyofthecalculationsinthescenarioalsoincludeIntel’svProTechnologyasanoptiontoreduceTCOandincreaseenterprisesecurityandoverallreturnoninvestment(ROI).IntelvProoffersbuilt-inlaptopanddesktopsecurityforgreaterprotection,alongwithanaddedlayerofenterprise security for businesses and intelligent systems.

Intel vPro addresses four critical areas of IT security:

• Threatmanagement,includingprotectionfromrootkits,virusesandmalware• Identityandwebsiteaccesspointprotection• Confidentialpersonalandbusinessdataprotection• Remoteandlocalmonitoring,remediationandrepairofPCsandworkstations

TheIntelvProcomprehensivesetofsecurity,manageabilityandproductivity-enhancingcapabilities is built into many of Intel’s processor families, chipsets and network adapters to simplify and accelerate the management of these four critical IT functions.

http://www.intel.com/content/www/us/en/business-intelligence/pc-total-cost-of-ownership-estimator-demo.html

http://www.intel.com/content/www/us/en/business-intelligence/pc-total-cost-of-ownership-estimator-demo.html


SCENARIO 1 – HIGHLY MOBILE WORKFORCEWithagrowingorganizationof5,000employees,SalesRep,Inc.(SRI)isfacingadifficultchoice.FiveyearsagowhenSRIreplacedallitsdesktopcomputerswithnewPCs–converting 60% of them to laptops in the process – the company felt like it was on the leading edge of productivity.

Buttherecessionhitthecompanyhard,andinordertoavoidadditionallayoffs,SRI’sleadership elected to postpone the next IT refresh scheduled for 2011. They postponed again in 2012, still in the face of an uncertain recovery. But as 2013 continues, employees are often frustrated by unreliable hardware, instead choosing to rely more heavily on their personal smartphones and tablets to help them stay connected and productive.

TheCIOatSRIdecidedtorunthefollowingcost-benefitanalysistodetermineifitwastimeto refresh the company’s 5,000 desktop and laptop PCs.

The scenario below reflects SRI’s ratio of 60:40 laptops to desktops and a refresh lifecycle of four years for laptops and five years for desktops.

Italsoreliesonthefollowingassumptionsrelatingtothefrequencyofsupportevents,hourlywagesofemployeesandaveragenewPCacquisitioncosts.

PC Incidents & Events Laptops Desktops

DeploymentofNewApplications,ServicePacks,UpdatesandPatches–NumberofEventsPerPC/Yr

34 34

ITHelpDeskSupportIncidentsperPC/Yr.fromMajorMalfunctionsofSoftwareorHardware

10 6

SecurityIncidentManagementperPC/Yr

40 31

PCAudits&InventoryManagement 17 17

IT Technician Support

PercentofIncidentsRequiringPhysical Visits by IT

23% 30%

PercentofIncidentsRequiringShippingofPC

13%

Power Savings

CostperKilowattHour $0.11US

HoursperdayPCisON 8

HoursperdayPCisIDLE 14

HoursperdayPCisOFF 2

Productivity Gains

Knowledge Worker $30US

StructuredTaskWorker $24US

DataEntryWorker $19US

Hardware acquisition expenses

Cost per laptop PC $1,500US

Cost per desktop PC $1,150US


$12 million in estimated annual savings

Despitetheinitialhardware,migrationandtrainingexpensesassociatedwithacompanywiderolloutofnewPCs,IntelexpectsthatSRIwouldstillsavenearly$12millionperyearinITandrelatedexpensesbasedonreal-worldcalculationsforacompanylikeSRI.

Decreased IT support costs

The following charts below show the assumed expenses incurred in this model due to acquisitionamortizationandongoingITsupport.ThelowerhardwareexpensefordesktopPCsismatchedbyaproportionallylowerITsupportexpenseaswell,despitethefive-yearrefresh window.


These savings would come from fewer IT support incidents related to:

1.Servicepacks,updatesandotheractivitiesneededtokeepsystemscurrent2.Majorhardwareandsoftwaremalfunctions3.Security-relatedissues4.AdditionallogisticscostsduetoshippingsystemstoITsupportbasedonremote workforce

Decreased power usage

AlthoughSRIsupportsahighlymobile,nationallydistributedworkforce,thebenefitsofreducing the company’s power consumption and carbon footprint are compelling.

This table illustrates the nearly $50,000 anticipated savings that would result from the migration to more efficient hardware and software across the enterprise.


Increased employee productivityThethirdandmostsignificantareaofincreasedbenefitsduetoSRI’sPChardwarerefreshis,ofcourse,tiedtoincreasesinworkerproductivity.EveryITsupportcallhasafrustratedandunproductiveSRIemployeeontheotherendofthetroubleticket.Thatlackofproductivityaddsupquickly,asseeninthefollowingcharts.


The hardware refresh has an immediate, positive impact on employee productivity, compounded by the additional productivity benefits that Intel vProtechnologyprovides.Thesebenefitsareduetoadropinsecurity-relateddowntime, often from willful attacks from hostile third parties or unknowing errors on the part of the employee. In addition to the immediate drop in productivity that accompanies a hardware breakdown or crash, there is also the long-termproductivity-dampingeffectoftheemployee’sfrustrationworkingwithanagingtoolsetforjust“onemoreyear.”

Admittedly,workerproductivityisconsidereda“soft”benefitinmanycircles,but it has a hard impact on the bottom line of any business – especially one that reliesonknowledgeworkerslikeSRI.

WhiletheU.S.economycontinuestoimprovein2013,mostcorporationshavebeenreluctanttohirefull-timeemployees.Asaresult,mostofthegainshavecomefromincreasedemployeeproductivity.SinceallknowledgeworkersrelyonaPCforthemajorityoftheirdailywork,havingasystemthatcanscaleuptotheir growing productivity needs is essential. The above scenario certainly proves that. IfSRIweretocontinuetorelyontheirexistinghardwareforanotheryearinordertosaveonacquisitionandmigrationcosts,itwouldbetheequivalentofputtinga$12milliondragchuteonthebusiness.SRI’semployeeswouldberunning faster than ever as business increases, but they’d be held back by their four-orfive-yearoldPCs.

SCENARIO #2 – HIGHLY STATIC WORKFORCETimesaregoodagainatWesternRegionalBank(WRB).Thecompany’sskillfulleadership team led it back from the brink of insolvency due to the housing crisis of2008,acquiringseveralofitsless-fortunatecompetitorsalongtheway.TodayWRB has nearly 6,000 employees working in branches across eight Western statesandonemajorcallcenterinIdaho.


WithmuchofWRB’sprofitsgoingtowardsthebalancesheetandacquisitionsthelastfive years, the IT team has had to maintain computer systems purchased in 2008, along withapatchworkofmorerecentPCstheyinheritedwiththeacquisitions.Thebank’svicepresidentofITandSecuritylookedattherecentincreaseinsupportcostsandranacost-benefitanalysistodeterminehowmuchofafinancialimpactatotalPCrefreshwouldhave on the company. The scenario below reflects WRB’s ratio of 80:20 laptops to desktops and a refresh lifecycle of four years for laptops and five years for desktops.

Italsoreliesonthefollowingassumptionsrelatingtothefrequencyofsupportevents,hourlywagesofemployeesandaveragenewPCacquisitioncosts.

PC Incidents & Events Laptops Desktops

DeploymentofNewApplications,ServicePacks,UpdatesandPatches–NumberofEventsPerPC/Yr.

30 30

ITHelpDeskSupportIncidentsperPC/Yr.fromMajorMalfunctionsofSoftwareorHardware

10 12

SecurityIncidentManagementperPC/Yr.

35 35

PCAudits&InventoryManagement

17 17

IT Technician Support

PercentofIncidentsRequiringPhysical Visits by IT

23% 38%

PercentofIncidentsRequiringShippingofPC

10%

Power Savings

CostperKilowattHour $0.11US

HoursperdayPCisON 7

HoursperdayPCisIDLE 17

HoursperdayPCisOFF 0

Productivity Gains

Knowledge Worker $30US

StructuredTaskWorker $24US

DataEntryWorker $19US

Hardware acquisition expenses

Cost per laptop PC $1,500US

Cost per desktop PC $1,150US


Nearly $14 million in annual benefits

Whiletherewouldbesignificanthardware,migrationandtrainingrequiredtorolloutapproximately 6,000 PCs companywide, Intel estimates indicate that WRB would receive nearly $14 millionperyearinbenefits,evenaccountingforacquisitionandrolloutcosts.

Decreased IT support costs

ThechartsbelowbreakdownacquisitionandITsupportexpensesincurredoverthefour-orfive-yearperiod.WRBbenefitsfromthegreaterratioofdesktopPCsthatarelessexpensive to purchase and easier to service, versus the 1,200 laptops they intend to purchase for executives, loan officers and investment bankers.


The estimated $4 million in annual savings is due to a drop in IT support incidents related to:

1.Servicepacks,updatesandotheractivitiesneededtokeepsystemscurrent2.Majorhardwareandsoftwaremalfunctions3.Security-relatedissues4.AdditionallogisticscostsduetoshippingsystemstoITsupportbasedonahighly decentralized workforce.

Decreased power usage

In a business like WRB’s that relies on hundreds of physical branches and one large call center, reducing the bank’s energy profile can deliver large dividends to the company’s bottom line.

By replacing 6,000 desktops and laptops and leveraging the benefits of Intel’s vPro technology, the company should cut their energy consumption by almost $200,000.Those savings would begin accruing the moment the migration is completed.


Increased employee productivity

Sinceemployeesarethelargestexpenseinmostcompanies,itmakessensethatanyincrease in employee productivity would deliver significant benefits back to the business.

Based on the tables below, this is certainly the case. WRB stands to receive nearly $10 million in annual benefits from the technology refresh due to increased productivity and decreased overtime.


WRB’s hardware refresh has an immediate, positive impact on employee productivity, augmented by the additional productivity benefits of Intel’s vPro technology. With the financial services industry remaining a favorite target of hackers worldwide, the true benefits from a vPro implementation could be even greater.

While worker productivity is arguably a softer metric, it’s especially important for knowledge workers that rely on a PC as the primary tool to execute most or all of their daily duties.

GiventhatmanyWRBemployeescomefromrecentacquisitions,thedisparityinageof the PC systems from location to location can become a point of contention. This can lower employee engagement and responsiveness, and bring down customer service and satisfaction with it.

The resulting loss of business that might result from such a hypothetical situation would be added to the nearly $14 million dollars in annual IT support, power and productivity benefits Western Regional Bank would forego if they tried to stretch their existing PC infrastructure another 12 months or more.

CONCLuSIONSRegardlessofthescenario,onethingiscertain-asPCsage,theybreakdownmoreoften,run slower and are less secure than newer PCs. By the time a PC begins its fifth year of service – a milestone many PCs purchased in 2008 are currently facing – the expense of maintaining the current system often surpasses that of purchasing a new one.

Perhaps most importantly for IT leaders, the necessary increase in your maintenance budgettosupportagingequipmentalsomeansacorrespondingdecreaseinyourbudgetforstrategicprojectsintendedtodeliversuperiorcustomerservice,attacknewmarketsorimprove the company’s profitability.

If your company last refreshed your PC systems before 2008, 2013 is the year to begin yourPCmigration.Whetheryou’reahighlymobilebusinesslikeSalesReporastaticonelike Western Regional Bank, you’re potentially leaving millions on the table by trying to stretchyourcurrentsystemsjustonemoreyear.

Putting together a business case and action plan to smoothly refresh thousands of PCs can be daunting. Insight understands your specific needs in this area, and we’ve created a services portfolio designed to help you with your PC refresh, easing the transition and expeditingyourROIsavings.

Fromassessmenttointegrationtomanagedservicesanddisposalofoldequipment,InsightsupportsyouthroughoutyourentireITlifecycle.Letusdevelopatruecost-benefitscenarioandshowyouinreal-worlddollarshowaPCrefreshcansaveyourcompanymoney, enhance your productivity, keep your company more secure and allow you to focus ontheprojectsthatdeliveracompetitiveadvantageforyourcompany.

ContactyourInsightsalesrepresentativeat1.800.INSIGHTorvisitusonlineatwww.Insight.com for more information.

About Insight

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