Benefits Of A Technology Refresh Cycle & Why
Shorter May Be Better

Hint: It’s about business performance, not hardware.

Technology is a powerful tool that helps businesses improve product and service quality, foster innovation, enhance customer satisfaction, increase productivity, and more. But all too often, businesses wait to replace their endpoint devices — such as PCs, laptops, tablets, smartphones, and point-of-sale (POS) terminals — until the cost of maintaining them surpasses their replacement cost.

By focusing on hardware costs, this approach ignores the negative impact of older technology on your business and the dramatic benefits you can enjoy by keeping your endpoint devices operating at peak performance. For many businesses, productivity gains alone provide sufficient justification for a shorter refresh cycle.

The High Cost of Old Technology

Anyone who’s ever purchased a computer knows that failure rates increase dramatically as technology ages and that out-of-warranty repairs (or extended warranties and maintenance contracts for older devices) are expensive. But what’s even more costly is the impact of slow boot times, slow system response, and device failures on business performance and reputation. For example, a POS terminal failure can result in lost sales and business data, inaccurate inventory information and customer frustration.

So how do you know when it’s time to upgrade? Here are some indicators:

  • Hardware is impeding productivity because of crashes or slow performance
  • You are running legacy operating systems
  • Your systems are no longer supported by the manufacturer
  • Your systems have an inactive warranty
  • Replacement parts become difficult to find
  • Repair and maintenance costs equal or exceed replacement cost

The Benefits of a Shorter Refresh Cycle

Over the last 15 years, total cost of ownership studies have consistently suggested that for most businesses, the optimal refresh cycle for laptops and desktop computers is 3 years. For example, in a study conducted by Wipro1, analysts gathered detailed data from 100+ firms across 15 different industries to determine the relationship between total cost of ownership and PC refresh timing. The research confirmed that maintenance, out of warranty repairs and support costs for PCs older than 3 years is higher than purchasing a new system. In addition, they found that security risks increase with a 4-year old PC having 53% more security incidents than a new system.  

There’s a strong argument to be made for an even quicker turnaround. In a separate study conducted by J. Gold Associates2, the research indicated that companies can achieve a significant ROI by upgrading more frequently than a 3- to 4-year cycle because new technology results in more productive and efficient employees. And companies that deploy new systems on a 2-year upgrade cycle enjoy average productivity improvements ranging from 4.49% to 11.57%, depending on the type of worker. This translates into average yearly savings ranging from $5,077 to $13,103 per employee. 

 Absent planned upgrades, IT executives may feel pressured to invest in systems with more capacity than is currently needed in case they must be used longer than anticipated. By establishing a shorter refresh approach to swap out old technology with new assets every three years, you avoid idle investments while still allowing for steady growth in capacity. 

How We Can Help 

A scheduled replacement cycle for endpoint devices can save your company money and increase productivity. Huntington Technology Finance will work with you to craft an asset refresh strategy that provides the best possible mix of financial benefits, flexibility and innovation for your business.

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1Using Total Cost of Ownership to Determine Optimal PC Refresh Lifecycles, Wipro 2009.

2Replacing Enterprise PCs: The Fallacy of the 3-4 Year Upgrade Cycle, a J. Gold Associates Research Report”, J. Gold Associates LLC, August 2014.

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