Small and medium businesses are constantly under pressure to maximize their resources. In instances of damage or breakage, is it most cost effective to repair or replace hardware?
It is so important to consider the contribution that the actual hardware in question is making to your operations as well as the guarantees on performance and mechanics. There is a fairly straightforward “formula”, if you will, that can be used to make the call as to whether it makes more sense financially to repair or replace a device that is broken or damaged in your IT environment.
Here are the components to consider when making the decision:
Does the equipment have sales value?
IT equipment parts might be valuable to another party. The entire device may even be of interest if someone is willing to repair it. You can replace the value in this context from the cost to replace it, but that depends on the type of equipment we’re talking about. Is the damage or issue workable?
The manufacturer may even have a buy-back program or other rebates for replacement if you continue with them. It is always important to research these sorts of opportunities, especially if you are confident in the vendor.
What is cost to get rid of it?
Damaged equipment may or may not have sales value. If you have to get rid of it completely, what will it cost you to dispose of it properly? Heavy, cumbersome equipment like copiers and servers could be expensive. Do your homework to find out your options and we urge you to take into consideration recycling and environmental factors as you pursue this!
What is the cost to replace it?
Can it be brought back to its working order within a reasonable timeline and budget, and will it be at the level of dependability that you require? If it has malfunctioned or been damage before, that increases the likelihood of future issues in most cases. Replace something when there is a significantly more efficient model that can be attained for a reasonable cost within your budget! Consider this against the cost for getting it where it needs to be to continue using it.
Repair Versus Replacement
With the above information you will likely be able to calculate roughly if it makes more sense financially to get a replacement or go through the repair.
Subtract cost of getting rid of it from the cost to fix it. That’s your repair value.
If there isn’t a cost to dispose of it, then use the cost of repair as the value of the repair, of course.
Take the sales value and subtract it from the cost to replace, which will give you the replacement value.
Just as with repair value, if there’s no value in salvaging it then you just use the cost to replace as your replacement valuation.
Once you have all that, just take the replacement value and subtract the repair value from it. Is the result a negative number? If it is, it is cheaper for you to replace the equipment!
Is device-as-a-service available to you? This gives you the option to pay a subscription fee to a vendor in order for them to provide devices and manage them for you. That would mean that all this decisionmaking is more on their plate and you can just stay focused on delivering outcomes.
It is that simple?
Well, no. This doesn’t take into account any considerations that could weigh in that relate to the non-hard-costs of the hardware:
Does everything still support all the software you require to run your business?
Is the device still fully supported? If not, why not, and will that be resolved with a newer model or a variant of the current hardware?
For help managing all of the pieces involved in technology lifecycle management and planning, get in touch with us!
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