Update or replace?

The employees at my small business are having to wait too long for their computers to perform routine functions, but do I really have to replace all their PCs?

Whether to update aging office PCs or replace them entirely is a business decision faced by virtually all small- and medium-sized business (SMB) owners every few years. Although computers can last longer, technology is advancing so rapidly that a PC that was new three years ago is often unable to support the demands of current software and operating systems. While it may seem that making a few PC upgrades such as swapping out the hard drive for a larger one, adding more memory or updating the operating system is an economical and low-risk solution, in reality, the piecemeal approach is generally more costly than you might think.

To update or replace, that is the question

The biggest factor in deciding whether or not to update or replace a PC is ROI — which choice will yield the greatest return on the businesses investment? To determine ROI, small business owners (or their IT managers) must look at just how employees are using their PCs. Where PCs were once used for data entry and word processing, they are now used for more resource-intensive applications that require increased PC performance and efficiency. A few seconds saved on hundreds of different tasks a day can add up to several hours gained each month -saving many additional dollars on the bottom line.

The cost of PC components has decreased significantly. For around $400 — about half of the price of a new PC — an SMB owner or IT manager can update a hard drive and add more memory and a new operating system. But there are a number of other factors that must be considered when deciding to update a PC.

For example, the existing motherboard may not support a newer processor or additional memory. Performance can decline considerably with the increased resource demands of newer operating systems, applications, and more serious security measures. What’s more, updated PCs are not typically covered by hardware or support agreements, which means your IT staff could be working around the clock if something goes wrong.

Factor in the support costs and downtime required to manually update and maintain an upgraded PC as well as the complexity of having to manage different PC configurations across your business, and more often then not you will find that buying new PCs will yield a higher ROI than updating older ones.

How can spending money on IT save money?

The total cost of ownership (TCO) of a PC — new or old — is comprised of two elements: the actual purchase price of the PC, which makes up 20 to 30 per cent of the TCO, and the ongoing operational expenses, such as software and security updates, as well as ongoing maintenance and support costs, which represents 70 to 80 per cent of the TCO.

So, while skipping a PC refresh cycle or two by updating aging PCs rather than replacing them will delay the initial cost of purchasing new PC, those cost savings will catch up to you in the form of increased system downtime, IT support costs and decreased end-user productivity.

These days, PCs that are even a year or two younger offer much better performance than older machines in the workplace — at a lower total cost of ownership than a piecemeal upgrade.

For example, PCs based on current generation technologies such as dual core processing allow users to run multiple, intense applications simultaneously in the foreground while antivirus and other security utilities run transparently in the background, without affecting performance.

The bottom line is that while initially it may seem more cost-effective to upgrade an aging PC those costs will likely catch up to you. Even when times are lean and budgets are tight, replacing your desktop PCs every three years and notebooks every two years will simplify your IT management, reduce security risks and increase productivity.

Doug Cooper is country manager for Intel of Canada Ltd. in Toronto.

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