All decisions at My IT come down to ROI, regardless of whether they are for us or our clients. One of the most significant changes many of our new clients learn working with us is the cost savings of buying more expensive workstations for their employees.
How can it be cheaper to buy a more expensive computer? A workstation, or any device really, is a tool and having the right tool for the job makes the employee more productive.
A non-technical example: an employee can move a 1,000-pound boulder in 3 hours with a $10 lever or in 5 minutes with a $100 lever. If you pay your employee $35 an hour, the $10 lever costs you $105 in time and the $100 lever costs just $4.20. Comparing just your costs, the first lever is $115 compared to $104.20 for the second.
This comparison doesn’t include payroll burden, the employee’s satisfaction level, or the fact that the employee could lift 36 boulders with the second lever in the same amount of time. If you were a boulder lifting company and charged $500 a boulder, your ROI jumps from a $385 to a $17,895.80 profit by purchasing a lever that cost 10x more!
5 Factors to Consider When Reviewing the ROI of Workstations
- Productivity – Consider the productivity of the employee and how much a 5-10% increase impacts your company’s profit. A cheap machine has a place, such as a senior citizen checking email and Facebook at home, but when time is money, a faster, more robust machine may make more financial sense.
- Functionality – Think of how long you need to keep your systems minimally functional for that employee’s role. An engineer probably needs a more robust computer than an administrative assistant. Think of what level of output your hardware and software needs to meet to be profitable.
- Serviceability – How easily and quickly can the machine be serviced? Most of the workstations we provide to our clients come with onsite assistance, meaning we minimize the impact to your employee’s time. A mail-in warranty could take weeks to get the workstation back, so it would be more economical for the company to buy a new computer instead of waiting around for the warrantied computer to be fixed, which costs more money. (Note: We coordinate with the manufacturer and keep an inventory on hand to minimize the impact to clients.)
- Upgradability – Can you upgrade the memory, video cards, processor speed, or other components if necessary? With a consumer-grade machine, you’re limited on upgrades and it may not support simple things like using multiple monitors. (See ROI of Multiple Monitors.)
- Life Span – Most bargain machines last only 2-3 years because consumer-grade machines are not built to be on 40+ hours a week and take the wear-and-tear of heavy usage. Comparatively, many professional-grade machines come with a 3-year warranty and last even longer than that. Additionally, as computers age, their parts get less common and more expensive to acquire, which also costs you more money in hard costs and lost production time.
Real-Life Workstation ROI Comparison
We recently compared the costs of multiple machines for a new client, and here is what we found:
|Dell Consumer-Grade||Dell Professional-Grade|
|OS||Windows 10 Home||Windows 10 Pro|
|Hard Drive||1TB 5400 rpm||1TB 7200 rpm|
|Video Card||Intel HD Graphics||Intel Integrated Graphics|
|Warranty||1-year limited mail-in||3-Year Business Class|
While the computer specifications have similar aspects, the professional-grade machine has a clear edge, plus it includes the professional edition of Windows (which is required for commercial use).
A big difference is a warranty, a 1-year mail-in warranty versus 3 years of next-day service warranty. However, most people do not understand the difference, nor the ROI of the professional warranty. Not only is the professional-grade computer less likely to break since the standard warranty is three times longer, Dell repairs the computer the next day and you’re dealing with their business call center versus the general support. (Note: Our clients deal directly with us, and we work with Dell to fix/replace warrantied computers.) A 3-year warranty on the consumer-grade machine ups the price $150!
The other major difference between the two models is the professional-grade computer has a 33% faster hard drive and a much more robust processor. The speed of your hard drive and processor may not sound like a big deal, but a 5% increase in production has huge ramifications when factored over the five-year life span of the computer.
A 5% increase in productivity for an employee that makes the company $50 an hour is $25,000 in ROI over 5 years! Now multiply that times 300 employees to get a $7.5 million impact to your bottom line.
That is how a $910 computer can be cheaper than a $529 computer. A $117,000 investment (the price difference to purchase 300 professional-grade machines) netted the company over $7.4 million dollars.
A good IT firm can help you analyze your investments in hardware and software, and this ROI result is one reason why we view IT as a profit center instead of an expense. Every employee is going to use a computer, that is already decided, so why not maximize their usage to get the best results from that tool?
Also, a company does not need to invest in a new computer for every user every year. We suggest determining the minimal viable levels each machine needs to operate at to be profitable to determine the lifecycle of each device. For many of our clients, a common lifecycle is 5 years for computers, laptops, and servers. For a 300-user company, we’d suggest they budget 60 new computers a year to keep every computer in the company working at optimal levels. [Read more about Lifecycle Management.]
For power users, such as engineers and architects (especially those using CAD and BIM software), they may need to upgrade their computer every 2-3 years. We’d pass that computer on to another employee that doesn’t need such a powerful machine.
Conversely, you don’t want to change everyone’s computers too often. Some companies will give their top users the best computers every few months and pass along their used computers as I just mentioned. I do not suggest such a frequent change because it takes months for an employee to “train the computer” and customize it to their needs. Additionally, employees have some downtime when changing computers, at least one hour for setup. Doing a one hour switch every 3-5 years is drastically different than every three months. The ROI of a frequent change doesn’t add up.
When reviewing hardware costs, look at the impact of the tool, not just the cost of the machine.
Consider the soft costs too because many younger employees see a company’s investment in technology as an investment in the company’s future in the employees. A common reason for turnover is a lack of the right tools to do one’s jobs and not believing in the company’s future viability.
Additionally, that $400 difference in price in the hardware comparison costs 21 cents a day over 5 years. That is an amazing investment for a $25,000 return. How will you use your pennies?