Over time, every enterprise reaches a point when some or all of their IT assets become obsolete; either their existing hardware no longer functions properly, or it must be replaced with newer equipment for improved functionality and capacity. Most foresighted business managers understand that holding onto out-of-date technology can be a recipe for failure as industry competitors become more nimble and flexible, armed with real-time, fact-based data and communications.
So, what do you do with your old IT equipment? The IT Asset Disposition (ITAD) industry has grown significantly in recent years as new equipment capabilities continue to grow.
Factors that contribute to the ITAD industry’s growth include the:
- Increasing awareness of the harmful environmental impact of electronic waste equipment
- Importance of security and the elimination of data remaining on discarded equipment
- Governmental initiatives designed to implement safe ITAD processes to safeguard the environment
What an ITAD Company Does
The safe, secure, and economical disposition of electronic equipment is a critical role for any IT manager.
With the ever-increasing volume of discarded computers, mobile phones, and related equipment, ITAD companies are thriving by finding creative outlets to reuse or recycle them. The process also involves the assured, safe erasure of data and harvesting parts that might still have some use or resale value.
Developing Your ITAD Strategy
Larger companies and organizations make substantial investments in IT equipment. Imagine entire rooms or even floors of IT staff with desktop computers, monitors, printers, copiers, and all other accessories. The same company may have hundreds of field personnel with laptops, notebooks, and mobile phones. In five to ten years, all of this equipment will likely be replaced with newer equipment at least once.
Disposal of obsolete equipment demands a well-developed strategy by the IT manager. That individual’s objective will be to achieve the best possible, lowest-cost outcome for the removal while minimizing environmental impact, security risks, and freight costs.
In some instances, the residual value of your discarded equipment may offset the cost of disposition. Demand for used equipment has risen with the work-from-home and distance learning trends that we are currently experiencing.
Begin Your Search
With ITAD, “putting all of your eggs in one basket” by working with only one company can be risky. Some ITAD companies, even larger ones, have recently discontinued their operations to focus on other activities. Their sudden demise has left clients in a costly and challenging situation of scrambling to find a replacement.
Start your ITAD provider search by asking for several Requests for Proposal (RFP) from as many potential providers as possible with the objective of retaining two or more. The RFPs should be specific to your needs and offer a clear hypothetical case for each candidate to address. A well-defined RFP gives you a clear understanding of how each ITAD company will respond to your needs.
Be careful when a company suggests “free” services. In an ideal transaction, the amount that the ITAD company receives from the resale of your used equipment and parts might offset the total cost of the transport, disposition, selling, and profit margin. These transactions may be termed revenue sharing, demanding a relationship that is totally transparent and honest.
Another ITAD vendor may promise “free” disposition but refuse to share their actual costs (and excessive profits) with you. Most likely, this company has figured out a way to turn your discarded equipment profitably without sharing the benefit with your company.
Democratizing with Multiple Vendors
Once you have defined at least two ITAD vendors, give each one a similar project to handle. After you compare the outcomes and the resulting costs/expenses are similar, you have probably chosen well. If one is repeatedly more expensive or problematic than the other, you should consider reviewing a replacement candidate.
Having more than one ITAD vendor also encourages competition. If your projects are sufficiently large to warrant special attention, you should be able to justify very competitive ITAD bids.
Along the way, create a scorecard to measure the effectiveness of each ITAD company you retain. Metrics should include:
- Responsiveness and reaction time
- Cost per comparable project
- Chain of custody reporting
- Recovered value relative to final charges
- Total logistics and transport costs
You should also maintain a running total of comparative cost reductions resulting from the efficiencies created by your decisions.
Major companies have several national or international locations, each with varying volumes of IT equipment.
While in many instances, “globalizing” certain supply chain functions offer benefits due to economies of scale.
With ITAD, however, regionalizing or “localizing” ITAD functions is usually more cost-effective because of the reduction in total logistics costs. Moving less equipment over shorter distances will offset most volume advantages.
Develop your ITAD strategy carefully, keeping in mind that more than one ITAD provider will:
- Encourage competition in cost and measurable service levels
- Provide a “safety net” in case one provider becomes unavailable
- Increase your IT asset disposition capacity
Maintaining a transparent, positive, and collaborative relationship with more than one ITAD provider will provide you with much-needed emergency service capabilities when you require a quick response.
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