Pulling the plug on old hardware: Life-cycle management explained

Planning ahead for the end of equipment life can help keep the IT department's bottom line looking good.

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Bigger companies have more to manage

Very large companies often maintain an entire department dedicated to tracking the life cycles of IT assets.

Financial services institution Citigroup, for example, has a 16-person team in the U.S. responsible for assessing the IT equipment used by more than 300,000 employees around the globe, according to Jim Brown, Citi's senior vice president responsible for desktop asset management, who is based in St. Louis.

With the assistance of an asset management software package, which Brown declined to name, the department has come up with life-cycle guidelines for its IT equipment. The guidelines are typically 36 months for desktop PCs and laptops and 60 months for servers, but not all of the machines in the company fall under those parameters.

"We get a list from our engineering group on a monthly basis that says, 'Here's what we have [that's still viable]; here's what's going off the list,' and make a determination," Brown says. "The base lifetime is determined at the point of acquisition, when we know what the vendor says it will be, but typically it ends up longer."

The department has weekly discussions to review the list and make decisions about what hardware stays in use and what will be retired, he notes.

Brown's team spends 100% of its time managing IT assets -- including phones, printers and monitors, in addition to computer systems. "In past lives, this has been a part-time job, where [the employer] says, 'I want you to take care of this asset management thing,' " Brown says. Not so at Citi: Brown works with financial departments to collect input, but his focus is solely on asset management, and the final say comes from him.

That dedication allows the team to explore ways that technology can improve the process of tracking an asset and determining where it is in its life cycle. (For example, they're exploring passive RFID and discussing ways to enable certain hardware to report its location over the Internet.)

Finding the sweet spot

Whatever the size of the company, firms should strive to reach a "sweet spot" in asset management, where equipment has reached or exceeded its break-even point but isn't yet unreliable enough to inconvenience users, explains Anthony Abbattista.

As vice president of technology solutions at Allstate Insurance in Northbrook, Ill., Abbattista is responsible for the hardware used by roughly 100,000 employees and agents in the U.S., and his department spends about 10% of its time on life-cycle issues, he estimates.

For data center equipment, once hardware has passed its depreciation point, Abbattista's team evaluates the performance and throughput that the hardware can achieve, determines how much power it consumes, and examines the cost to renew maintenance agreements with vendors before deciding whether the total cost of ownership makes the system worth keeping.

Allstate swaps out its 50,000 to 60,000 desktop PCs for new systems on a rolling schedule simply because there are so many of them, says Abbattista. He will consider running systems past their expected life span as long as they can still support users and they're not being regularly sent back to the IT department for repair.

While he works closely with Allstate's finance department, Abbattista believes that ultimately the decisions a company makes regarding its IT asset life cycles must be driven by the IT department.

"We always want to save money, and we've learned to keep assets around until they're broken," he says. "When and how to do a capital swap-out becomes part of running a good IT shop."

Check back for Part II, coming soon, on retiring and recycling old hardware responsibly.

Garretson is a freelance writer in the Washington, D.C., area. She can be reached at caragarretson@gmail.com.

Copyright © 2010 IDG Communications, Inc.

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