How old is your company's surplus equipment and can it adequately fulfill existing business requirements? The pressure to make this decision comes from the typical three-year manufacturer's warranty. Many companies with constrained headcounts find it administratively simpler to replace the equipment rather than accept the expense of hiring an external organization to provide on-site service. Another push to change comes from the new operating systems and applications rolled out every several years. In addition, the drop in personal computer prices over the years has made it cheaper to justify the three-year refresh cycle than to purchase extended warranties. Finally, the labor involved in exchanging used equipment within the organization is the same as for exchanging it for a new computer.
To address this, companies adopt a refresh cycle based on the calendar. Notice that this equipment exchange is not based on the business need of obsolete equipment, but rather on the need to keep up with the warranty coverage.
The result of a desktop equipment refresh is that a significant number of devices suddenly become surplus. For a large organization, dumping this many machines into the used equipment market over a short period of time depresses prices. At some point, the equipment's sale price brings in less than the cost to prepare and ship it to a buyer.
The outflow of used equipment should be planned as carefully as are the inflows of new equipment. The first step is to understand types and ages of discarded equipment Use the company's asset inventory (or an analysis of equipment purchase records over the past five years) to count the number of devices and determine their ages and model numbers.
Some companies try to avoid disposal issues by leasing equipment instead of purchasing it. However, the expense for the leasing company to dispose of used equipment is still baked into the price.
Some equipment is not declared surplus even in a scheduled refresh. Examples of these are monitors, printers, and keyboards. They are used as long as they connect to the computer and work. This is an example of how one indicator can hurt one metric and help another. A CRT monitor requires three times the electricity to operate as a similarly sized LCD monitor. However, discarding an operational CRT monitor means that equipment that has not reached the end of its useful life is discarded for reasons other than that it no longer works. The 21st Century Classrooms Act is one solution. It enables large companies to deduct the full price of computers that it donates to a K-12 school within two years of the date of purchase.
Was this article helpful?