Sony battery recall can cost IT shops time, trouble, study says

Some IT managers see it as cost of doing business

Sony Corp.'s global recall of 9.6 million laptop batteries is expected to cost the manufacturer more than $400 million. But what about the amount it costs an IT shop in terms of the time, labor and headaches involved in finding the affected batteries, ordering new ones and replacing them?

Jack Gold, an industry analyst, said last week that a typical business with 5,000 affected laptops could expect to incur an unreimbursed cost of $625,000 for such things as lost productivity, shipping and the labor of in-house technicians and end users. That expense would be incurred even though Sony is replacing the batteries for free, he said.

For the estimated 3 million laptop batteries already returned by business users, the unreimbursed costs so far total $372 million, said Gold, an analyst at J. Gold Associates in Northboro, Mass. The batteries were recalled because they are subject to short-circuiting, which can cause some computers to overheat or even burst into flames.

Finding and replacing an average laptop battery will cost $125, based on user and technician time lost, plus shipping costs, Gold said. He estimated the actual replacement and related tasks might take 15 minutes, and he pegged the per-hour cost a technician's salary and benefits at $80.

Tokyo-based Sony expects to spend $429 million on the recall of its lithium-ion batteries worldwide. That cost does not include the possibility of losses from lawsuits connected with the batteries, a Sony spokesman said.

In interviews, four IT managers last week said they have replaced Sony laptop batteries in their organizations through their laptop manufacturers, but none even ventured to guess what their own labor and lost productivity costs would be.

"It hasn't had too much of an impact on us," said Tim Ryan, network manager at City College of San Francisco, which had about 30 batteries replaced out of about 300 Toshiba and Apple laptops used by faculty and staff. Users were given information about the recalls and asked to bring in their laptops for the battery swap. However, Ryan said his college "doesn't tally things like our time to replace things that closely."

"In the scale of things that can go wrong like a virus or worm, this was relatively minor," he said.

Still, the stories about laptops exploding or catching fire got his attention, as well as the attention of his IT colleagues -- one of whom attended a seminar in Tokyo last summer at which a laptop burst into flames. The fire was traced to a poor battery. "He shared his story, and that got everybody's attention," Ryan said.

Schon Crouse, a mobility integration analyst at Children's Hospital at Ohio State University in Columbus, Ohio, said that laptop batteries are being replaced in about 20 of 150 Dell machines used by the hospital. For Children's "it's been a little bit of a problem, because the user has had no battery for a while during the replacement," Crouse said.

As soon as Children's officials learned the batteries could lead to explosions, they asked users to take any affected batteries out of the laptops and use AC power instead. "It means they have to stay plugged into the wall until they get a new battery -- and one user was going out of town, so we had to scramble to find him a good battery," Crouse said.

Dell was easy to work with and paid postage both ways, but Crouse said "you'll never get that cost paid back" for the time involved in the replacement. Children's uses an outsourcing company to handle its hardware needs, including the battery recall, he said.

"Things happen in the technology world, and you can't control everything," Crouse said.

One IT director for a large hospital in Texas said that about half of 200 laptops in use there had to have batteries recalled. "Dell jumped right on it," said the director, who asked that he and his hospital not be identified. "There was the threat of fire, and we didn't want users exposed."

Some users had to resort to using AC power until the new batteries arrived, he explained. Because the hospital had recently installed asset tracking software, finding the affected laptops was easy and quick. "We were OK with the replacements," the director explained. "Every now and then, something with technology will happen, and you recognize it's just part of dealing with a vendor. Things are not going to be perfect all the time."

Still, the director said that the recall is something he will remember the next time something goes wrong with a laptop and the hospital needs the vendor's attention or a small favor. "Everybody in IT has to work on having a good relationship with a vendor," he said. "Hopefully, you treat them professionally and they treat you back the same way."

Copyright © 2006 IDG Communications, Inc.

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