Shorter IT Lifecycles Can Reduce Operating Expense By 20.5%

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 organisations 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 organisations 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 organisations struggle to analyse the financial, operational, and technical issues surrounding IT investments as they strive to optimise their capital choices and evaluate leasing and financing options,” said Joseph C. Pucciarelli, programme director for IDC’s Technology Financing and Management Strategies. “Although many IT professionals recognise the opportunity shorter lifecycles present intuitively, most organisations continue to struggle with translating this into an analytic analysis.”