Stretching Your Tech Dollars: Save a Penny, Lose Nine Cents?

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Old Tech
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Nonprofit organizations are experts at squeezing every last bit of value out of an asset. After all, a penny saved is a penny earned. A penny earned by spending a dime, however, is a 900 percent loss.

The price of new computer hardware is remarkably inexpensive these days, but the cost is not zero, and as long as the old machine still turns on, many nonprofits continue running some pretty old hardware. Perhaps the software is newer, because TechSoup does get pretty close to free on some of the more common things like Windows and Office. Perhaps someone even upgraded the memory at some point, hoping to squeeze some more years out of that machine, but the actual costs of keeping an old machine, rather than replacing it on a schedule, should shock any nonprofit manager into getting a three-year depreciation schedule for a computer, and sticking to it. It’s time to retire computers and save our organizations some money. Here’s how this works:

  1. Computers, especially Windows-based computers, inherit errors and problems over time. You can minimize these through some maintenance, but how much maintenance do you want to put in to a $350 desktop?
  2. Some of your software is trying desperately to update whether your hardware has or not. Ever see that little pop-up about Adobe Reader? Yes, they are talking to you. Each update makes another change, and starts slowing things down.
  3. After a year or two of this, start-up times are noticeably slower. Processes get hung up, and maybe you need a restart or two. Maybe a quick re-imaging of the hard drive gets you back to peak performance. If you don’t know what that last sentence means, this will not help you and the time it would take you to learn might be better spent by skipping to step five below.
  4. You could limp along spending 10-15 minutes each morning waiting for your computer to get up to speed. If you pay someone $15/hour, the lost time from a slow startup will exceed the cost of a new computer in about 100 work days—say six months at most. So you might do well to skip to step five instead.
  5. Go online, order an inexpensive desktop (heck, even a laptop isn’t that much these days) and then get back to work. Stop wasting your very valuable time trying to preserve a very un-valuable asset.

Wait three years. Repeat.

Now, go focus on your mission. There’s work to do, and now you even have the tools to do it. The message you just sent to all the people supporting your work: Your time is valuable, and we value you.

By the way, let’s guess that the lost time at start up isn’t the only lost productivity here. Let’s assume you get the office manager or the ED to look at the machine, and you decide to go all 20th century on this thing (hey, maybe it was built in the 20th century?) and defragment the hard drive. Another lost hour. Maybe you call in someone else—perhaps even a tech professional at $50/hour or more. It doesn’t take long before all this stuff adds up to the cost of a new machine.

Yes, there will be some initial time getting the new computer connected, but that is a one-time cost that will almost certainly not result in more trailing losses. Can you say the same thing about that donated, six-year-old PC you’re keeping on life support because it still technically powers up?


 

Steve Boland lives at the intersection of community, policy and technology. Steve holds a Master of Nonprofit Management from Hamline University, and is a regular contributor to Nonprofit Quarterly. He can be reached at steveboland.com.

  • Marc Baizman

    I see this all the time, nonprofits continue using outdated hardware and software because “it’s too expensive to upgrade” without considering the multitude of costs of keeping these ancient relics (barely) working.

  • Josh Johnson, Bowman Systems

    A great ROI reminder for nonprofits.

  • Yapper Girl – Suzanne Oehler

    I couldn’t agree more. Organizations spend much time (and money) trying to save money that they lose productivity. The point of technology is to help us get out of our own way. Hardware, software and cloud-based solutions should make as more efficient and/or more (non)profitable. Otherwise, move on to the next solution!

  • Thomas Taylor

    While certainly many organizations need to do better work investing in current technology and maintaining it, I think there are a few problems with the approach that Steve Boland prescribes.

    First, if you are an environmental or human rights organization, then the practices advocated here are in direct conflict with your mission, given the way that computers, especially $350 desktops, are manufactured and disposed of today. I would hope that all nonprofit organizations that are working in some way to improve the world would realize that responsible consumption is an important, on-mission goal. The money that you spend to keep a machine going for 4 or 5 years, if done wisely, can be seen as a mission investment. This may involve a greater up-front investment to get a higher quality machine that starts with better specs that won’t be completely outmoded in three years, and is configured to be upgradeable (eg, has empty memory slots, and an extra drive bay). That investment also makes using technologies like imaging a hard drive much easier – low-end PCs, even from the same manufacturer, are a mish-mash of cheap part, while spending for “business-class” PCs mostly guarantees that all machines across a given model will have the same hardware and require the same drivers. It improves your ROI on maintenance tasks, as well.

    Second, the idea that boot-up time is 100% lost productivity just isn’t true. While 10-15 minutes is an unacceptable boot time, 5-10 can be used reviewing to do lists, checking voicemail, opening postal mail, and other useful tasks.

    In short, for nonprofit organizations, ROI calculations have to include mission impact from a variety of angles, and Steve Boland’s post obscures important parts of those considerations.

  • Steve Boland

    Yes, I agree mission impact always must be a first driver. If your nonprofit mission is impacted by your tech replacement schedule, then a longer schedule or other change may well be appropriate. And of course for the rest of us, responsible re-use of machines (in our area, http://pcsforpeople.com) ensures the machines still have life, but not a life that uses lots of staff time to get done.

    I will disagree, however, that downtime waiting for computers, and more importantly staff time trying to fix them, is something that can be discounted by moving on to other tasks. In many cases, real and true productivity involves the computer and network resources, and I think the cost/benefit analysis just shows it’s time better spent working with your actual productivity tools rather than making up other work until they can be available.

    I certainly appreciate your thoughtful response. Always good to have more perspectives to share.

  • JT

    This article misses two key concepts that nonprofits face daily. First, the cost of a new computer is in *cash*, not simply lost productivity. Unless the employee with downtime is paid hourly (and paid for the time s/he sits around), there are not increased expenses – just reduced productivity.

    Second, typically purchases like computers add to “overhead” in the sense that they are not direct program expenses. While I strongly believe that limiting overhead is based on uninformed ideas of donors, we can’t simply ignore it. Purchasing new computers adds overhead, and donors hate overhead.

  • michael

    I would think an average competent nonprofit leader would be just as concerned for reduce productivity as increased expenses.

  • michael

    .

    Great observations about lost productivity due to old equipment. Can we take it a step further…like bad networks or lack of network. Many nonprofit’s IT infrastructure consists of computers and software which have been acquired in drips and drabs over the course of years. Thus it never acts as a fully integrated network. The result is that Case Management software can’t talk to Finance, which cant talk to Senior Management. The results is data entered three or four times by different employees. BIG problem.

    Two years ago we funded a number of tech plans for small/medium nonprofits. All had dysfunctional networks. The cost for revamping the hardware/software to provide even the most basic functioning came in at no less than $30,000. For a community center with a $290,000 budget, who will invest that capital for an upgrade (even we wouldn’t…we suggested a merge with two other community centers and then building an integrated network)

  • Kate Barr

    Your comment about cash is right, JT, and needs to be factored in to technology purchases. I have to comment about your statement that “purchases like computers add to overhead”. If the computer is used by a staff member who provides program services, manages programs, designs programs, or evaluates programs, then the computer is a program expense.

  • jstainer

    Some interesting comments, and I would say there are certainly times when it’s time to upgrade because the costs are too high not to.

    However, someone should not be paid $15/hr to wait for the computer to start up/reboot. They should be doing other things. Defrag on the hard drive should be done after hours when no one is working.

    Obviously if things are getting to the point where crashes are regularly happening, or it’s so slow that productivity suffers, then it’s time to upgrade. Otherwise , when you factor in some of the things that TT mentioned as well as real life tight belts and budgets, until there is a very good reason to do so, upgrading should be a final option.

  • Carol Baroudi, Sustainability Practice Advisor, Redemtech

    I think Steve Boland’s advice is unsound, environmentally hostile and short-sighted. I daily use an ump-teen year-old refurbished ThinkPad that my employer, Redemtech, gave me. It’s an awesome machine that would retail north of $1200 before you put the software on it, and it’s doing just fine, thank you. We routinely see laptops get at least seven years of useful life. We all use refurbished computers, every day. Missing from Mr. Boland’s piece is any acknowledgement of the resource contention over the rare earth minerals needed to create the electronics. Perhaps Mr. Boland has never seen Annie Leonard’s The Story of Electronics or The Story of Stuff. What is he proposing that non-profits do with their 3 year old computers – he simply proposes you buy new but doesn’t mention the end of life of these assets. Perhaps he is also unaware of the conflict minerals that find their way into electronics. Is he also unaware of the human-rights concerns that come along? Isn’t it ironic that most non-profits set out to do good in the world, yet he’s suggesting you practice mainstream consumerism? Perhaps you don’t need your computer to last 8 years, but buying new every three years is obscene.

  • Jim Lynch (from TechSoup)

    Some good stuff in this piece and of course we at TechSoup are much obliged for the mention about our donation programs. At last count we have 469 donated or discounted products for nonprofits and libraries on our website (www.techsoup.org) from 52 donor companies including Adobe, Cisco, Microsoft, Symantec and many more including 26 cloud companies..

    Also the growing demand in our Refurbished Computer Initiative (http://www.techsoup.org/stock/rci/) indicates that lots of nonprofits still need good low-cost refurbished computers. We carry refurbished commercial grade PCs that last a good long time and run current software.

    It is quite true that PCs get clogged up over time. I’d disagree that the right solution is to get rid of them every few years and get new ones. It’s not the right solution for the environment and also yearly maintenance to clean them out is not necessarily a major expense. Running good solid anti-virus protection and keeping it updated is the 1st step in keeping PCs running efficiently.

  • Kirsten Johnson-Obey

    Salient advice for more than just non-profits, Steve! Many a small business faces the same issue!
    KJO

  • Jason Franklin

    A good post and I agree with the basic premise that using woefully outdated hardware could be costing you, but a three year replacement cycle seems extreme. A couple thoughts:

    1) Before you replace, do some simple tune ups. If you have a PC, check out this simple ten-step set of suggestions from Microsoft – http://bit.ly/kkDASh. If you run a Mac, check out this set of suggestions from GigaOm (http://bit.ly/hd5CGE) or these “clean up aps” from MakeUseOf (http://bit.ly/1pmgl1).

    2) Also before you start replacing your computers, think about what you use them for. Your communications person might need a more robust computer than your ED…think about what the computer will be used for, not how important the position is. And that computer your communications person may be ready to ditch because it can’t keep up with the latest graphic design software could be perfect for an admin or intern use…or even for your ED.

    3) Finally, if you do setup a replacement schedule…plan for it! Ask yourself what you really use your machine(s) for and buy for that, not the newest toy. And to handle the sticker shock of the cash outlay for new computers, think about setting up a rotating schedule – maybe every computer gets replaced every 5 years and you do 20% each year? Every 3 years and 33% each year? And maybe some get rotated down to less intensive uses before being thrown out. And by all means, use TechSoups refurbished computers – they’re assessed to run like new at a fraction of the cost and you’re buy a computer to run the latest graphics intensive gaming are you (are you?!? grin) TechSoup had a useful planning article a few years ago – http://www.techsoup.org/learningcenter/techplan/page12302.cfm

    Hope this is helpful. 🙂

  • Jo

    Kate is right. As a Grant Professional, I work with nonprofits throughout the grant development process on this very issue. Too often, nonprofits do not adequately calculate program expenses where technology is concerned. Many grantors require stringent record keeping and reporting. In order to manage a grant effectively you need to have the systems in place to track your goals, benchmarks, clients, services, budgets, etc. Grantors know you need adequate technology to meet the requirements for most grants and will fund technology if it is included in the budget and budget justification. Many nonprofits believe they have included technology in their Indirect Cost Rate, under their IT Department, but fail to adequately budget upgrades, refurbishment, and replacements for their overarching (integrated) system and for their individual, unique program/staff needs over the course of 5 to 10 years when they submit their Indirect Cost Rate. Furthermore, when adding a new program, staff or service technology needs also increase and is considered a program expense (as Kate mentioned).