IT managers across the UK are wasting money through dealing incorrectly with end-of-life technical equipment. Companies are dumping what they consider to be obsolete technical equipment onto tips, storing it away in corridors or selling it onto brokers, simply to get rid of the problems quickly, without a thought to data security or environmental legislation.
Some companies do not even know that redundant technical assets, such as PCs, laptops and handhelds, can actually be reconditioned and resold, putting at least 5% of the money originally invested into technology back into the hardware budget year-on-year.
Exactly how much equipment are we talking about? Well, approximately five-and-a-half million PCs are sold per year – and this does not take into account the seven-and-a-half million other electrical or electronic items sold. Industry statistics suggest that only one third of these are recycled, so we are talking about 4.3 million electrical items just being thrown away, when they could be reconditioned for reuse, broken into parts for resale or simply recycled, benefiting the environment.
Companies believe that recycling or reconditioning for resale comes with associated costs, and in fact, it can be a business pain if not dealt with correctly. Even if you sell an end-of-life PC to an employee, for example, you have to ensure all data is permanently removed from the hard drive, and you also become liable for the electrical safety of each item, as well as other issues such as insurance for the sale of used electrical equipment.
This is why companies find it easier to dump the equipment – but there is an alternative solution that can generate a financial return.
So how do you get the 5% back?
Typically, when companies decide to sell their obsolete equipment, they use brokers who offer a set price to the company for the disposal of the equipment.
Brokers may be keen to gain equipment for a low price and might not concern themselves with adequate data removal – it is incidents like this that caused the scandal for Paul McCartney a few years ago, when investment bank Morgan Grenfell sold on PCs to a broker who did not adequately wipe the data.
Private financial information relating to McCartney was found when the PC was purchased at a car boot sale – causing extreme embarrassment to the firm involved and running the risk of expensive legal action by the offended party.
Equally, if brokers choose to eventually dump the equipment rather than reselling, and it can be traced back to the original company, it is this company that can be fined by the Environmental Agency for breaching the WEEE (Waste of Electrical and Electronic Equipment).
There are alternatives.
An asset management company works on commission, so it will try and gain the best possible price for the equipment. It also takes on the legal responsibilities for resale, and will have the technical experience in-house to know whether a piece of equipment is electrically safe.
The resale value of used equipment is calculated using the assumption that three-year-old equipment has a residual value of at least 5% at the end of its commercial life.
Prices for individual units depend on the work needed and the equipment’s age, specification and condition. Nevertheless, money can always be made on redundant equipment whether the whole unit is re-sold or broken down into parts.
As soon as a decision has been made to buy new technical equipment, a company must decide what to do with the old equipment. Sometimes, breaking down the equipment is even more profitable than selling it as a whole.
Laptops, for example can be separated into parts and their screens alone can reach up to £250 when used in other equipment.
The lifecycle management process has many stages and is fairly complex, so usually businesses just want to leave it up to the experts to deal with.
If the equipment is in full working order, it would need to be wiped of all important corporate and client data before being re-sold or donated. This service would have to be carried out by an expert using software trusted to completely and irreversibly clean the hard drive in order that the business does not contravene the Data Protection Act.
Businesses also have a legal responsibility when disposing of equipment.
Under the new WEEE directive, businesses are required to dispose of technical equipment in a safe and environmentally sound way.
But there are other options for businesses.
Businesses can decide to donate to charity. By donating to charity, after wiping the hard drive of data, businesses can save money through tax relief, as well as contributing to corporate social responsibility programmes.
Even PCs with as low a specification as Pentium 1 can be used in Africa.
TAM is currently working with not-for-profit organisation Digital Links to export large quantities of PCs to countries such as Kenya, Namibia and Sierra Leone.
Equipment can also be ‘cascaded’ where older equipment is used in less IT-reliant roles within the company. One company TAM dealt with thought it would have to purchase a thousand new PCs, but when we examined the company, we found they could refurbish 400, saving it approximately £280,000.
Most companies have a range of assets that are suitable for different means of disposal. They should look for an asset management company that offers bespoke solutions to dispose of assets in the most profitable and appropriate manner.
- Kevin Riches, managing director of technical asset management company.
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