THAT "INEXPENSIVE" COMPUTER IS COSTING YOUR SMALL BUSINESS MORE THAN YOU KNOW

​Managing expenses is key to a successful business. To do that, you need to understand the actual Total Cost of Ownership (TCO) of your investment. Making your financial decision on purchase price alone is a losing strategy, and this is especially true when deciding what technology and computer equipment to purchase.

​It’s easy to be lured into making a purchase based on discounts and promotions, in order to “get a deal”. As a business leader, you need to make sure your purchase is going to meet your business need, last for a reasonable time, and not result in expensive support fees, reversing the expected savings.

​When it comes to buying a laptop or computer for your business, you need to consider several additional cost factors. Some of those costs are direct expenses, such as hiring an IT support provider to set it up, installing antivirus, configuring a data backup service, and buying replacement parts. Other expenses are indirect, those include your own time spent fixing issues, loss of productivity waiting for updates to install, or lost business if you are down while the PC is sent away for a repair.

If you take the time to review the TCO, you may be surprised at how much you spend to keep that “inexpensive” computer running.

Consider these factors when researching your next business computer purchase:

TCO is a comprehensive assessment of information technology (IT) or other costs across enterprise boundaries over time. For IT, TCO includes hardware and software acquisition, management and support, communications, end-user expenses and the opportunity cost of downtime, training and other productivity losses.

Gartner, Inc.

warranty

​Consider the duration and detailed services provided. Most consumer PCs only come with a limited one-year warranty. PCs should be expected to last three years for business use and should have a warranty that matches.

The default warranty on most PCs requires that you pack up the unit and ship it back for repair. This means someone you don’t know has access to the data on your system and your business is without a computer. With some mail-in repairs taking two to four weeks, these are large concerns.

Instead, an ideal warranty on a business PC should provide next day, on-site repair. Downtime, shipping, and any repair costs are important factors to consider when calculating your TCO.

​usability

If you are buying a PC from an online retailer or local electronics store, you can expect it to come loaded with “bloatware”. This is the industry term for pre-installed software and apps that your business does not need. Their existence on your computer can slow it down and make you more susceptible to viruses and malware.

Additionally, those PCs will not have all the software tools specific to your business installed. This means you either must take up your own time getting the computer ready for business or pay an IT provider a steep hourly rate to complete the configuration. These expenses should also be considered in your TCO.

support

Regardless of how far technology has advanced, it still lets us down on occasion. The complexity of technology has also increased, which makes using it efficiently a challenge. Further, modern PCs require proactive maintenance to keep them running smoothly. All three of these factors will result in additional expenses to pay a professional or take up your valuable time if you try to go it alone.

The average computer support professional will charge $130 an hour and in some areas, their fees may include a trip charge and an hourly rate as high as $190. Just one hour of support each month over the three-year life span of a business PC can range from $4,680 to over $7,000. That expense must be added together with the cost of lost productivity to understand your actual TCO.

security and backup

Don’t forget other monthly services that are critical to safe PC operations. Those include a proper subscription for antivirus, malware, and data backup. Skipping out on those services to save a few more bucks could lead to a catastrophic business loss. Finalize your TCO by adding in the cost of monthly subscription services for security and backup.

Calculating the TCO for a PC purchase can take time and might be overwhelming. That makes it seem much easier to buy the hot deal of the month PC and take your chances. As a business leader, you know you need to make sound financial decisions and you also have to allocate your time to priority business tasks.

Surprises aren’t something that should be accepted when it comes to making good financial decisions. Overpaying for your business’s technology can severely impact your bottom line and limit your ability to invest your profit in growing your business.

TCO calculator

Use this guide to calculate expenses related to technology ownership you might be forgetting about. Before you make technology purchases, compare the TCO of your current situation and that of the proposed purchase. 
​

ITEM	EXPENSE	QUANTITY	SUBTOTAL
PC
Monthly Support
Hourly Cost of Downtime
Antivirus Service
Online Backup Service
Internal Labor Cost ​(Time spent setting up PC, installing monthly updates, and other maintenance tasks)
		Total Cost of Ownership:	$

but wait, there's more

There is a lot more to consider before making technology investments.  Watch for future blogs on the difference between  consumer-class and  business-class equipment, what a warranty should cover, unlimited vs. hourly support, and more.  We would love to know what else you want to learn about.  Please share your ideas through the "Ask Me"  survey on this page.