Techaisle Blog

We know that productivity is a very important business goal for your organization. And that not only employee productivity but also group and organizational productivity is of importance. The IT industry is abuzz with discussion of how to improve productivity – and the number of suggestions is logarithmically proportional to the number of IT suppliers. But you need to find that trusted advisor, an unbiased supplier who can sift through the hype. We know that there is an ongoing change, a shift towards business value & employee empowerment. These refer to the new priorities among SMBs to invest in tools and technologies that allow their users to make better business decisions, improve market reaction time and better serve their customers. In other words, SMB firm leaders like yourself, are looking to improve return on Human Capital as a way forward.

Drilling down beyond the hype – how can you use technology to augment your organizations’ ability to compete tasks and decrease process friction?

Productivity

Techaisle found that SMB business leaders are believers in the connection between technology and productivity: 55% see “creating processes that constitute a better way of doing business” as a key benefit of IT, 57% credit IT with “facilitating better automation of core business processes,” just over half report that IT creates “better coordination across functional areas,” and an even 60% state simply that technology “improves employee productivity”.

A study conducted by Techaisle with 736 small businesses in six countries – US, Brazil, China, Germany, Russia and India exposes the true costs of maintaining older PCs, frequency of repairs, hours lost due to system performance issues that unbeknownst to many small businesses are chipping away at their cash flows and productive work hours.

Maintaining Older PCs Negatively Affects Operating Cost

The study reveals that small businesses are spending an average of US$427 per PC that is 4 years or older on repair cost. Cost implications vary widely for small businesses of different sizes. For example, among small businesses with 50-99 employees, the average cost of repairing PCs 4 years old or older is US$521 per year. The repair cost therefore either equals or even exceeds the purchase price of some new PCs.

Older PCs Diminish Employee Productivity

As the system performance of older PCs begin to degrade and the number of applications running simultaneously increase to an average of eight for small businesses, it is not surprising to see that 25 percent of older PCs are upgraded each year by small businesses. The upgrades add another US$134 per older PC.  The average per PC cost to upgrade an older PC is highest within the 1-49 employee size small businesses. Combining the average upgrade cost across all small businesses with the average repair cost the total cost of maintenance equals US$561 per older PC. This is a “stealth” cost that drains cash flow and adds to the operating cost of a small business which they can hardly afford.

The study also reveals that an average of 42 hours is lost due to an older PC being repaired by either internal IT staff or reseller or even friends & family. Slightly over 36 percent of small businesses have 4+ years’ old PCs which create many different types of problems for the both the owner and the employees.

Newer PCs Positively Impact Productivity and Reduce Operating Cost

Small businesses using newer PCs have felt several positive impacts; among the top are improved application performance, improved productivity, and reduced operating cost. Small business owners mentioned that newer PCs allowed them to run 60 percent more number of applications simultaneously without any degradation in system or application performance as compared to PCs that are 4 years or older. This is a significant improvement as small businesses are increasingly using several different types of applications simultaneously including business productivity applications, Email and web, online chat and video, line of business applications, social media interactions, finance and accounting as well as music and games.

Improved performance directly leads to improved productivity and efficiency. Along with better manageability and reduced overall maintenance expenses, newer PCs directly impact the bottom-line of small businesses by reducing operating costs.

Financial Impact to Small Businesses

More than two-thirds of small businesses have moved away from a PC replacement policy and many others are keeping their PCs in use longer than in previous years. 47 percent of small businesses cited lack of budget as a key reason for not replacing older PCs in spite of frequent issues and lost productivity. However, these small businesses should re-evaluate their decision given the higher cost of maintaining older PCs which has a larger cumulative effect on the budget. They should consider both direct and indirect costs resulting from PC downtime, that is, both the “visible” and “hidden” costs. Replacing, rather than repairing and upgrading will reduce cost of operations and free up budgets.

For a typical small business that has six PCs - three PCs more than 4 years old and three less than 4 years old the study finds that the direct maintenance and lost productivity costs yields a total of $4,203 per year. To put it in perspective – that is equivalent to buying two to four new notebooks (depending upon specific purchase price).