Disposing of IT assets

When you decide to upgrade, get the old equipment out the door as fast as possible so you can recapture the maximum resale value, Ferguson says, rather than having it sit around in storage where it will surely lose all value.

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Include downstream liability in your cost calculation. One company thought it was getting a bargain paying $3 per monitor to a vendor that dumped the tubes in a field, O’Brien recalls. After getting a call from the state department of environmental protection, the company had to pay for site cleanup, plus an additional $7 per monitor to have them hauled away and dismantled. “Everyone’s looking to save a dollar, but it just could come back to haunt you in the long run,” O’Brien warns.

Leverage process automation

To minimize your costs, establish enterprisewide processes for handling asset retirement and disposal. “You need to set a corporatewide strategy,” IBM’s Ferguson says, “an efficient process for deciding if [an asset] has value or needs to be scrapped, getting the most cash if there’s value, or disposing of it in an environmentally safe manner.” Other options that could be part of your overall strategy include internal redeployment, sales to employees, and charitable donations — although the latter programs can be costly and time-consuming. And charities may want software and support to come with used equipment.

“You want to try and take the labor out of [asset disposal],” O’Brien adds, and recommends using asset management software to handle documentation of such end-of-life issues as asset mix and condition, status, chain of custody, and important details such as software license removal. “Know what you own in the first place,” says O’Brien, “and understand that different equipment comes out of service at different points in time for different reasons, and you may need multiple paths for [disposal of] that equipment.”

Logistics and equipment removal is another area where process is key, Arbogast explains. “Often customers aren’t really in tune with where their assets are located, or the specs of the equipment, so they need on-site inventories,” he adds.

Choose the right vendors

Vendor selection is a critical issue in disposal. In addition to strong environmental, data security, and operational processes, enterprises should look for robust audit trail, asset tracking, and reporting capabilities.

Disposal vendors include large OEMs such as Dell, Hewlett-Packard, and IBM — who have developed disposal programs as part of their leasing ventures and are now starting to market them more aggressively — plus smaller national and regional players such as Newmarket Trading, Redemtech, RetroBox, SpaceFitters, and United Recycling Industries. Most of these vendors will support the options previously mentioned including resale, destruction and recycling, or internal redeployment, for a wide variety of IT equipment.

O’Brien recommends conducting extensive due diligence, including scrutinizing hiring processes (do they do routine background checks?), subcontractor selection, and available indemnifications they can offer you. “Look at their insurance policy — if it’s $3 million to $5 million and I’m a $50 billion company, that won’t cut it,” she explains.

And because shipping is one of the biggest cost components of disposal, O’Brien recommends choosing a vendor that has locations relatively near where your equipment is located.

But with vendor selection, as with the data security and environmental aspects of disposal, it all comes back to cost vs. risk. O’Brien sums up the challenge of disposing of end-of-life assets: “At the end of the day, you have to look at how much risk you want to assume.”