Disposing of IT assets

“Data destruction takes time and a specific process,” says Tod Arbogast, senior manager at Dell Asset Recovery Services. Simply scrambling or deleting the file allocation table isn’t sufficient, he adds, nor is rewriting each drive sector just once, because the data can still be reconstructed. The more secure four-pass DOD method takes more time, Arbogast says, but can be accomplished economically by daisy-chaining PCs together to rewrite multiple drives simultaneously. Another tip: some disposal firms, such as RetroBox, randomly send wiped PCs to data recovery specialists to verify that their data destruction processes are bulletproof.

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Minimize environmental liabilities

“Seventy-five to 80 percent of [IT equipment] that’s being recycled in this country still goes to Third World countries,” estimates Redemtech’s Houghton, where it “essentially gets laundered” through a series of brokers before being dumped in environmentally unfriendly ways. A 2002 report about e-waste from the Silicon Valley Toxics Coalition exposed this phenomenon, pointing out the potential for corporate brands to turn up in unflattering photos of piles of e-waste.

The best approach is to perform due diligence on how your disposal vendor handles environmental compliance and what hazardous materials handling certifications it has — such as the International Organization for Standardization’s Environmental Management System standard 14001. Also learn what its downstream vendors are doing, because your liability is not necessarily limited once the equipment has changed hands several times. Approximately 50 pieces of proposed state legislation address e-waste, on top of existing state requirements for hazardous waste disposal. Some proposals would mandate fees built into the cost of new machines to cover proper disposal.

The technology for recycling electronic equipment is improving, according to Dell’s Arbogast, so look for vendors using state-of-the-art processes. Most destruction and recycling of raw materials is done by physically grinding components and separating raw materials. However, Gartner’s O’Brien notes that electronics recycling is a limited option because there’s not enough of a market for the resulting recycled materials — so you’re more likely to be dealing with environmental issues surrounding disposal than recycling.

Think cradle-to-grave TCO

Rather than assuming there’s a paying market for your used equipment, experts recommend taking a hard look at disposal costs as part of the asset’s total cost of ownership.

A recent Gartner study found that per-PC disposal costs could vary from about $85 to $135 depending on disposal method, including resale proceeds (see “Cost Comparison,” above). But vendors say most enterprises don’t really have a handle on what their true disposal costs will be, especially the cost of managing the logistics of equipment removal and disposal. “Our No. 1 competitor is internal programs,” says Stampp Corbin, RetroBox’s CEO, “but most customers have no idea how much it costs them.”

The best way to manage disposal is to start planning for those costs when you acquire assets. Prices are all over the map for outsourced disposal — Dell charges a flat $49 per system, for example — but remember that those figures don’t include your own internal administrative and labor costs. “It’s when do you retire it, how do you retire it,” says Gerri Gold, vice president of corporate development at HP Financial Services. “All those things need to be integrated together in a total solution,” Gold says.