Sony Battery Recalls Don’t Figure in IT Cost Equations

Users not tracking their expenses for replacement work

The need to swap out millions of laptop PC batteries made by Sony Corp. because they could cause fires isn’t fazing 15 IT managers, who last week described the internal disruptions as “minimal” and “part of the cost of dealing with technology.”

In fact, despite a report by a consulting firm estimating that the replacement process could impose hidden costs amounting to nearly $400 million on corporate users, two of the IT managers interviewed by Computerworld said that the battery situation has had a silver lining within their organizations.

“We used the recall as an opportunity to put our hands on everybody’s laptop to provide them with software updates and also the replacement batteries, if needed,” said Bill Moore, technical infrastructure manager at the Museum of Modern Art in New York.

A Good Excuse

Only about 20 of the museum’s 150 laptops needed new batteries. But Moore said the recalls gave IT “a good excuse to bring in the laptops of users who didn’t want to hassle with coming in before.”

Eight of 25 laptops needed new batteries at Riester Corp., said Dan Peterson, director of IT at the Phoenix-based advertising firm. The labor amounted to about 10 hours of work by an intern, “so our costs weren’t too high,” Peterson said. “Actually, I kind of wish more laptops were affected because most of [our] users need new batteries anyway.”

The replacements of the lithium-ion batteries began in August, when Dell Inc. recalled 4.1 million of them — a total that it later increased by 100,000. Since then, vendors such as Apple Computer Inc., Lenovo Group Ltd., Toshiba Corp. and Sony itself have recalled batteries sold with their laptops. Sony last week issued a new recall in the U.S. and said it expects to replace 9.6million batteries altogether.

A report on the recalls released this month by J. Gold Associates in Northboro, Mass., said that replacing each affected battery will cost companies $125 on average, based on the work time lost by end users and IT technicians, plus the cost of shipping new and old batteries between offices.

Analyst Jack Gold, who wrote the report, calculated that the unreimbursed costs would add up to $625,000 for a company that has to replace 5,000 batteries. In all, he predicted that swapping out the estimated 3million recalled batteries in corporate laptops will result in added costs of $372 million.

“That’s an overhead tax on using laptops, and, of course, manufacturers won’t cover that cost,” Gold said. “In fact, they may laugh at you if you ask to be reimbursed.”

Peterson was the only IT manager out of the 15 interviewed who said he had informally tallied the so-called soft costs of replacing the recalled batteries.

The government of Kane County, Ill., replaced the batteries in about 50 of its 400 Dell laptops but didn’t bother counting the labor time involved, said David Siles, the county’s chief technology officer. “Sometimes it costs more to track the soft costs involved with repairs than to just deal with them,” he said.

Schon Crouse, a mobility integration analyst at Children’s Hospital Inc. in Columbus, Ohio, said the hospital has replaced the batteries in 20 of its 150 Dell laptops.

As for the staff time that went into the replacement effort, “you’ll never get that cost paid back,” he said. But Crouse added that the hospital didn’t track how much time its workers spent on the batteries.

Craig Mathias, an analyst at Farpoint Group in Ashland, Mass., said many large companies should be able to minimize the time and effort involved in locating affected batteries because they use desktop management software, which can match the names and locations of users to PC and battery serial numbers.

Copyright © 2006 IDG Communications, Inc.

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