Shorter IT Equipment Lifecycles, Combined with Disciplined Technology Management Practices, Can Reduce IT Operating Expense By 20.5% IDC Reveals
FRAMINGHAM, MA – NOVEMBER 28, 2007 – A well-formed IT lifecycle management policy that presents a repeatable and consistent framework for replacing and renewing the "consumable" IT assets has the potential to significantly reduce IT operating costs, according to IDC. By not integrating operational cost/performance data into lifecycle replacement planning and "lease-versus-buy" capital analysis models, IT organizations may be incurring a 20.5% cost premium to acquire, manage, and decommission their IT equipment.
Existing lease-versus-buy analysis routines, often required for major acquisitions, remain a "spreadsheet" exercise for many organizations that attempts to measure small differences in capital cost while glossing over inconsistencies in planned lifecycles, related maintenance and support costs, and tightening decommissioning/recycling requirements.
"While under continuous pressure to systematically renew and reinvest in their IT equipment portfolios, many IT organizations struggle to analyze the financial, operational, and technical issues surrounding IT investments as they strive to optimize their capital choices and evaluate leasing and financing options," said Joseph C. Pucciarelli, program director for IDC's Technology Financing and Management Strategies. "Although many IT professionals recognize the opportunity shorter lifecycles present intuitively, most organizations continue to struggle with translating this into an analytic analysis."
IDC's forthcoming report, IT Capital Investments: Evaluating Technology Lifecycle Management and Lease-versus-Own Options (IDC #209634), provides insights into the capital evaluation challenge confronting many IT organizations and offers recommendations for a more comprehensive lease-versus-own analytic framework and the related cost-reduction opportunities.
IDC's Technology Financing Strategies research team will preview key findings of this report during a telebriefing, IT Leasing: New Situations, New Problems, New Solutions, on Thursday, November 29 at 12 p.m. U.S. Eastern Time.
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