And e-waste laws are something that I have found to be an interesting animal.  In no way shape or form did I ever think that a company like mine would consider solving an e-waste problem, but what we do for our corporate clients is really managing their e-waste with the end result being a win-win-win:  client, environment, and company.  What we do won’t end up on Dirty Jobs with Mike Rowe, but it might keep Mike Rowe from scouting a landfill to find piles of IT hardware.

Word of the day: green adults  (jargon)

A term coined by Jupiter Research that describes online adults (age 18 and over) who are very concerned about the environment. Surveys show that 49% of online adults are concerned about the environment and 21% are “hard core” meaning they are serious about “green living” and are familiar with the terms carbon footprint and cleantech.

The word of the day: dis cooperire.  It means seeing and gaining knowledge of something previously unknown. Discovery.   Used in a sentence:

Through our dis cooperire we were able to re-purpose what had no value.

IT Hardware Logistics

It’s out there in the IT world right now:  Stop buying storage!  Optimize your IT network resources!  The economy is strapping budgets across company lines and IT isn’t immune. Optimizing what you currently work with is critical when it comes to procuring new software and hardware.  From my prospective, in most cases the conversation is only going 75% of the way to looking at a holistic IT infrastructure solution.

As an enterprise level IT organization, it’s important to not only track your software asset investment and recovery, but also your hardware assets.  When a software asset comes up for renewal, it’s easy to establish whether or not you need to renew, upgrade or drop them.  The software is intelligent and warns you that it needs to be re-licensed, upgraded, etc.

Conversely, your IT hardware assets, the backbone that the software uses to “stand on” has the same issue:  it goes out of warranty or the support for the component is no longer offered, but there is no “warning from the device that says it may be time to replace it, or be ready to manage the remaining life without a warranty.  It’s an IT hardware lifecycle that takes place every day in corporations around the world.  And if you are managing a multi-million dollar infrastructure, the hidden cost of managing this process can be a drain on the IT budget, and therefore the bottom line profits of your company.

One mans trash…

Once an IT hardware asset has lived out its useful life and has been fully depreciated the next step is to manage the asset out of your company at the lowest possible cost, and with the least impact to your company.  The traditional method of calling the IT trash man may be okay because it’s budgeted for, but a strategic alternative would be to layer in place an obsolete IT hardware exit strategy, and work with a professional company that knows how to safely, responsibly and efficiently remarket and recycle as much of the technology hardware as possible.  An independent review your network strategy with an external company to apply an EBITDA focused process with very little internal resource dedicated to the cause is a logical business decision.  This alternative has turned into a significant decrease in the net cost of maintaining an IT infrastructure.  And in some cases it’s actually turned into an IT revenue center. But in order to do this effectively there is a great deal of market knowledge required.  And pulling staff to get up to speed for, and maintaining this doesn’t support your core business.

ICT is an international IT Hardware Logistics solutions provider based in Malden, MA.  For over 16 years ICT has been partnering with clients to increase the value of their obsolete and end of life IT hardware infrastructure. www.ictcompany.com.

IT Hardware Logistics

Recently, Dave Aron of Gartner Research said that CIO’s are feeling the pinch of the downward economy in many ways. The outline that Dave presents provides some interesting clues that Gartner feels are imperative to the success of CIO’s in the near term. If the smart people at Gartner are right, and the innovation of an IT department affects the rest of the organization, it appears this is the primary key to success. Mr. Aron articulates that change leadership, a clear and articulated strategy and internal C-level stakeholder relationships should be the focus for a CIO. This line of thinking is also supported by CIO’s that were interviewed by Mark Hall, General Manager of the CIO Executive Council (http://www.cio.com/video/outlookseries).

The return of a company IT spend is sometimes hard to trace directly to a P&L. Sure, you can demonstrate how more efficiently a work process or department is with new technology. But what happens when that solution is no longer good enough? Now you have a technology infrastructure that needs a change management process applied to it. As part of that process, companies need to improve their understanding of returns and cost savings, therefore creating the missing link to the financials of the company. Essentially, if the project was stand alone and financed by external means, one would expect to see a return calculation, or in venture capitalist terms, an exit strategy. In the same way, you need an IT hardware exit strategy for your company.

Kendrick Anderberg who is the CIO at Phillips Healthcare specifically states in his interview that outsourcing the infrastructure that includes networks, mail systems and telephony (http://www.cio.com/documents/pdfs/anderberg.pdf) is something that CIO’s should be thinking about as the strategic impact of their role continues to evolve. His statement suggests that CIO’s are no longer the go-to people for maintenance of the infrastructure, but more they have become strategists that are aligned with other C-level people in the organization. Essentially they become the architects that align the evolution of technology with the strategic evolution of the entire organization.

The efficiencies and external relationships that a CIO and IT team build now will most assuredly help them to be ready for what will likely be increasing pressure to do more with less as the economy rebounds. IT is a cost driver. And even with the current rethinking of IT chargebacks, the cost of the IT infrastructure is still in the organization, it’s just realized in different cost centers. Providing the most cost-effective solution in this scenario is even more important. Direct users and stakeholders will be held accountable for this expense and will challenge the need for innovation unless the return value is visible.

Some of the major concerns that we hear include building an infrastructure that minimizes bottom line revenue dilution, ensuring that data security will remain intact, and remaining compliant with HIPPA and environmental laws.

As a company, we evaluate enterprise IT hardware assets that have become obsolete for a company or application and may have market value. We consult with our clients to “revalue” those IT Hardware assets. Sometimes there is no residual value, other times it’s significant. But one thing is certain: if a plan is in place that involves “cradle to rebirth” rather than “cradle to grave” thinking, it’s likely that the drain on resources will be better managed from a fiscal standpoint. The trick is to find an external solution that can be layered into the process, is largely self-managed and produces measurable results.

IT Hardware Logistics

As I was reading through news and reports this weekend, I came across a very interesting pole that was conducted on IT leaders who are responsible for all aspects of their corporate IT infrastructure. The results were clear: the majority – 69% felt that their budgets would either remain the same or would decrease in 2009. Those that responded that their budget would take a hit responded, on average, that they expect to see a reduction of 16%. This survey was directed at “mid-market” companies (1000-5000 employees) in the US. (http://www.pddnet.com/news-ap-second-annual-survey-of-it-executives-at-midsize-c-062509/ )

Because we have always been in a position to bring value added resources to an organization that wants to maximize their IT spend this was particularly interesting for me. It validated what my company does for our clients even after the physical IT equipment is no longer in use: we return value to the IT equation.

I like to talk about case studies when something goes terribly right.  I found it interesting that a study that we had no part in told our success story for us. What our team did was address a challenge for an OEM who wanted to achieve two goals: the physical destruction of the hard drives that they manufactured and to realize a return on any equipment that had unrealized market value. Their current situation was not showing a return for the remaining value of the assets – and was actually costing them bottom line revenue. We customized a process to match the need of the client and applied it to over 38 tons of equipment – creating value for the previously valueless assets they owned. We also managed their compliance reporting for these assets. We just helped 69% of the respondents as well as IT hardware manufacturers work more cost effectively!

On the data security side, consider that on June 23, 2009 a story broke about how sensitive government information was bought in Africa by journalism students doing a documentary on e-waste (http://www.cbc.ca/technology/story/2009/06/23/tech-e-waste-ghana-data-british-columbia-journalism-students.html#socialcomments). For $40 dollars a team of students bought a hard drive, and according to the story it didn’t take any special software for the students to open the files. In this day and age, that is not what any company wants to be dealing with.

IT Hardware Logistics

E-waste recycling laws are under consideration in several states, including Massachusetts, New York, Wisconsin, South Carolina, Colorado, Kentucky, Iowa, Pennsylvania and Utah. Hawaii, Missouri, and Texas are considering laws that would add televisions to their current laws, which only cover computer recycling.

States that currently have some form of electronics recycling law include:

• 2003 California
• 2004 Maine
• 2005 Maryland
• 2006 Washington
• 2007 Connecticut, Minnesota, Oregon, Texas, North Carolina
• 2008 New Jersey, New York City, Oklahoma, Virginia, West Virginia, Missouri, Hawaii, Rhode Island Illinois and Michigan
• 2009 Indiana.

Sustainability of resources is becoming increasingly relevant to companies as these laws become more widespread and established.  “It’s causing companies to rethink not only their manufacturing processes, but how they will “de-manufacture” equipment after it has gone through its full life cycle” says Mike Pekar, VP of Business Development for ICT in Malden, MA.

We can learn a bit from history.  The industrial revolution brought on the need to innovate a cleaner, safer way to manufacture steel and other raw materials.  It’s akin to what is happening right now in the information age.  Strategic thinking and action on the part of technology manufacturers is now required in order for those companies to stay competitive and compliant.  This is especially true of enterprise level manufacturers.  The increasing cost of precious metals alone means that engineering a sustainable, full cycle process is going to become more important than ever.  “We are working with our business partners to address these needs now.  And because of this we will both be well positioned to not only be a responsible company, but indeed we will be able to prove it.”, Pekar continued.  Coupled with an ever changing IT environment means that forward thinking companies who are want to stay relevant need to consider the entire life chain of their products.  Think of it as full circle manufacturing.  It’s a process that supports the commercial mission and enhances it, but doesn’t drain a budget to try and maintain.  In fact, a process that is well thought out and has the right creative minds behind it might even find a revenue stream that has been going unnoticed for years.

IT Hardware Logistics

In Europe, the European Union regulates how companies approach recycling – including how and where electronics waste can be transported and disposed.  There are new restrictions for manufacturers in the disposal of hazardous substances that are commonly found in IT hardware.  In some cases, the responsibility for disposal of a product is in the hands of the manufacturer or the importing company.

While the US does not have the same level of restriction or government oversight, many states have adopted legislation that will continue to be more restrictive.  However, in the US, The Resource Conservation and Recovery Act (RCRA) stipulates that businesses generating substantial amounts of electronics equipment must have a documented and compliant program in place or risk being fined for RCRA violations.  So a specialist that can reduce the amount of finished product that has been made obsolete for any reason can reduce the exposure to this type of risk.

This makes reverse logistics more relevant than ever.  There is a financial, legal and environmental component to the process.  Studies are suggesting that securing a solid third party logistics relationship that can provide a comprehensive solution for end of life assets will, in the long term, provide a cost effective solution.  In some cases it turns a cost center into a revenue generator for the IT arm of an organization.  Successful models show a significant dent in the net spend on enterprise wide technology spend, while at the same time reducing the risk of environmental concerns.  This allows manufacturers to devote resources and revenue to their core business.

I follow the retirement, refurbishment and remarketing of IT assets – so it’s what I speak to most readily.  Companies that are in the business of developing cutting edge enterprise IT hardware may not be efficient or even want to spend valuable resources to manage obsolete inventory, or product that has lost it’s “shelf life”.  And that’s where identifying and partnering with a 3PL that address specific needs and understand regulations can really save an organization time, resources and in the end, bring value to the bottom line.

They all manage the financial burden of environmental compliance, overhead cost, logistics, storage, and transportation of obsolete or retired IT hardware. All of these are significant cost drivers as your company stays on top of their technology. So, what do you do?

There are a couple of schools of thought:

Store it someplace because you could possibly cannibalize it and resurrect back into service.

Result: Now your IT department is constantly working to maintain up time, system stability, and are hamstrung by limits that are placed on your system when you need to innovate. Being able to deliver on the brand promise isn’t just sales and marketing – it’s the effectiveness of your network – the backbone of your company.

Pay a company to take it away for scrap.

Result: This is a cost driver – plain and simple. If you are budgeting for this without a return you are literally throwing corporate resources down the proverbial drain.

Partner with a strategic logistics provider that specializes in IT hardware and can revalue your inventory, and potentially reduce the overall net spend of your IT infrastructure.

Result: A trusted partner that allows you to focus on your core business. There are sophisticated methodologies that take time and effort to understand in order to make this cost effective. Most companies are not interested in creating a business model that is so far removed from their core competencies. Companies increasingly seek to consult with specialists who can quickly, efficiently and securely manage their IT burden and allow the IT team to focus on supporting the core goals of the company.

“The revaluation of IT hardware is something that we have always looked at seriously” says Alex Styller, President of ICT Company. “And the current economy has made us scrutinize every line of our P&L. So we know that other companies are doing exactly the same thing. Outside of personnel costs, IT is one of the major cost centers for any company in our technology driven world. As the recognized expert in our field, the question keeps coming to us when we approach our clients: “We are spending money renovating our IT platform. How do we reduce the cost of our IT infrastructure without impacting performance?”

And that is the question that ICT has been solving for clients since 1993. ICT has been a leading innovator and very nimble partner with their solutions to these problems. Every company has a different structure so no single answer is the right one. An independent solution provider is the preferred solution in this case. What the company has been able to do is partner with key providers in the IT network and telephony space to deliver on the promise of value back to the client. Styller says, “What we have been able to do is show our clients how that outflow of technology can be less of a burden – and in some cases add valuable capital back to the company. It’s similar to reinvesting and protecting financial assets in a t-bill. Safe, secure and can the results can be used to benefit your clients.”

IT Hardware Logistics

IT Hardware Logistics

Your company has IT hardware and has a regular IT Infrastructure maintenance plan.  Obsolete hardware is replaced on a regular basis and your company budgets for that.  But do they also budget for disposal of that hardware?  If so, read on.

You’re dragging your bottom line down unnecessarily if you don’t find a strategic partner to help manage your IT hardware decommissioning.  Here are some excellent questions to ask yourself about your current strategy:

1. Does our strategy require us to pay a recycler or reverse logistics vendor to remove unused IT hardware?
2. Do I know how the equipment is disposed of now?  Is it land filled, reclaimed, or is it decommissioned according to stringent government regulations?
3. Is there a comprehensive plan in place that minimizes the net spend of our IT infrastructure – and does it include remarketing?
4. Does my current plan ensure data security?

Do you know how to reduce the net spend on your current IT infrastructure?  As a leading partner with manufacturers and resellers, we provide the substantive and comprehensive solution that enhances your bottom line and enhances your compliance with environmental laws.

When you are investing in your IT infrastructure, there are three questions to ask your IT Hardware partner, especially if you are buying used equipment:

1.  Does your vendor have solid relationships with their suppliers?  The reliability of used hardware is surprisingly not significantly different than “new in box”.  Where you buy the hardware is really the key.  Finding a supplier that has the right relationships, knows where the hardware comes from, and will stand behind it is the key to your success.

2.  Have they built relationships that ensure the quality of their supply?  When deciding what you need, consider using a known provider that has longevity.  Working with a supplier that specializes in IT and closely related gear is also a great idea as opposed to a general electronics supplier.  That way you know you are dealing with a specialist, a professional in their field.

3.  Does your vendor partner own the hardware and know exactly where it came from, or do they use a third party to support their inventory?  This is a huge concern.  If your vendor doesn’t know where the hardware comes from, or understand the source, you could be setting yourself up for disaster.

If you can confirm these three important attributes then you are working with a professional who is committed to supporting your IT hardware needs.

Bruce Warren

ICT Company

www.ictcompany.com

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