Buying Computers with the Most Efficient Cost Structure Possible (Steve Hankins Commentary)

August marked the 28th year since the introduction of the IBM 5150 personal computer. While IBM no longer has any real role in the personal computer marketplace, the small company — Microsoft — that supplied the operating system for the 5150 flourished.

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My involvement with personal computers began before the 5150 came out. I played with an Apple II while in college and wrote cash flow projection software on an IBM 5110 (with its eight-inch green screen and eight-inch floppy disks) for my first accounting job. Getting the first IBM personal computer and Lotus 123 made my job much easier. No more programs to write. Floppy disks were smaller. It wasn’t long after the original 5150 came out that you could get a PC with an astounding 10-megabyte hard drive. In comparison, the 16GB iPhone has 16,384 megabytes of storage.

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With a little creativity, personal computers could greatly improve both the quantity and quality of the work of an accounting department.

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The “data processing” department thought I was nuts. I was told I was, “crazy to think that the world would run on a network of personal computers one day.” Truthfully, at the time that had never occurred to me.

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A few years later I was put in charge of the “data processing” department and faced with the challenge of integrating and managing the larger computers with the smaller ones. The personal computers begin to replace terminals as the desktop device for the larger computers and were no longer “personal,” but part of the corporate mainstream technology. Very quickly, there were hundreds of these machines to purchase and manage.

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What does this have to do with your business?

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Most businesses of any size buy and manage desktop and laptop computers. Along my journey I learned a few things about this area that can make a big difference in the amount of money you spend on your computers.

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Most business buyers look primarily at the purchase price point of the computer. I worked with one business that bought machines only from Dell or HP discontinued product inventory. Their thought was that efficient cost management of technology is all about the purchase price.

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The reality is that the bulk of the cost of a computer occurs after you buy it. Purchasing practices such as those described above will make after-purchase cost much higher than it needs to be.

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The trick to managing the cost of desktop and laptop computers is to not have to work on them after they have been put into service.

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Every time a technician sits in front of a desktop or laptop computer it cost your business a minimum of $100. You are paying for the technician as well as the worker that is standing and watching the technician work on the machine.

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What should your purchasing and management practices be in order to put yourself in position to minimize overall cost of ownership?

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To begin with, there are three important considerations for purchasing machines.

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First, use only top-tier vendors. Dell, HP, and Lenova are good starting points.

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Second, buy only business-grade machines, not consumer-grade. Business-grade machines are more robust and will better withstand the service hours needed in the business environment. Each vendor makes this distinction clear with branding. For example, Dell’s consumer line is branded “Dimension” while their business line is branded as “Optiplex.”

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Third, stay consistent. Buy your machines as much alike as possible. Support is much easier when each machine is not a unique puzzle to be solved.

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The “whatever is cheapest today” purchase method tends to result in a mixed environment of machines. You may also fall into the trap of buying machines with older technology or that have developed bad reputations for quality. There is a reason some machines are cheaper to buy than others.

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By following those three purchasing guidelines, you place your business in a position to have the most efficient cost structure possible. However, your management practices once the machines are put into service will ultimately determine the effectiveness of your cost structure. I will discuss those in a later column.

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(Steve Hankins is CEO and co-founder of Accio.US of Springdale, a technology company providing advisory and management services for small to medium-sized businesses. He may be reached at [email protected] and followed on Twitter as @stevehankins or @accious.)

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