Business Imperatives:

• Enterprises are often fearful of shifting preferred PC vendors, because of the perceived costs associated with acquiring an additional vendor and possibly dismissing an incumbent. IT executives should strive to reduce the cost of changing PC vendors by choosing to switch during a normal upgrade period, and standardizing on hardware and software configurations. Moreover, IT executives should work with vendors to understand and accurately capture the cost reductions enabled through improved management processes and technologies.
• There are one-time and ongoing costs associated with switching PC vendors, including financing terms, inventory write-downs, IT staff training, new vendor setup, process changes, and quality differences. IT executives should identify common and unique costs, and ensure that a new vendor is able to meet or improve upon existing best practices for acquisition, deployment, problem resolution, and support. Additionally, IT executives calculating switching costs should not include charges that are common whenever a new purchasing cycle occurs and a new system image is required.
• Comprehensive management of individual user systems, as well as management of enterprise images, have plagued IT departments. IT executives can realize significantly reduced costs using a phased strategic methodology for acquisition, deployment, maintenance, and support. IT executives should examine the qualitative improvements that can be captured using best practices, improved systems management tools, and standardization efforts to reduce switching costs.

As PCs have become integral tools of the workplace and their disposition and support has grown too onerous for the lines of business (LOBs) to sustain, their acquisition, maintenance, support, retirement, and disposal have been relinquished to IT. In addition, most enterprises must maintain multiple application versions, languages, and operating systems to meet interoperability requirements, licensing restrictions, and political, training, and/or support issues. Moreover, there are many different levels of requirements that range from the enterprise to the LOB, and even down to the individual user within a single LOB. Image management can potentially be as simple as one image for the entire company, or as complex as one image per user.

To deal with these issues and keep control over costs, most IT teams have had to place controls around all PC lifecycle issues. However, most procedures in use at enterprises today do not take full advantage of available tools and technologies designed to simplify and expedite the deployment process. RFG has discovered that while controls do exist, they are far from hard and fast at all but the most stringently run organizations, which account for only about three to five percent of companies. Therefore, proper tool usage, coupled with the promotion of best practices, could significantly reduce costs.

The level and types of controls can differ dramatically from one enterprise to the next, and even within an enterprise. Although most tools and methodologies in use at enterprises to contain costs and ease maintenance are not vendor specific, there is still a stigma attached to switching PC vendors, and many enterprises purposefully avoid the option. Most PC lifecycle processes are relatively complex, and some IT executives have been unwilling to switch PC vendors or techniques for fear of negatively affecting the process and training costs, and jeopardizing established vendor relationships.

Despite this, some established hardware vendors will use fear, uncertainty, and doubt (FUD) to make switching hardware vendors appear more costly than it may actually be. Many vendors use pricing negotiations to further convince enterprises of the value each relationship adds, particularly through the inclusion of various "free" or "heavily discounted" products and services. IT executives should understand existing PC lifecycle practices, and look for ways to improve procedures to reduce the cost of switching, and be committed to continual operational efficiency improvement.

New advancements in tools and practices, as well as the addition of increased on-site staffing and higher service levels are frequently offered in vendor proposals. IT executives should prepare rigorous requests for proposal (RFPs) to obtain a common format, enabling a fair product and cost comparison. The RFP process should be used by IT executives to their advantage to pressure vendors into further reducing costs. Vendors should be provided with the ability to resubmit responses to RFPs at least once after each learns of the favorable terms offered by competitors. This twist in the RFP process should negate the "relationship advantage" that vendors like to tout.

RFG has determined that the majority of PC lifecycle costs fall into six categories.

1. Asset management,
2. General user-generated help desk queries,
3. Operating system or application upgrade,
4. PC deployment,
5. PC retirement and disposal, and
6. Software maintenance and update.

IT executives should look for PC vendors with integrated, cross-functional, and non-proprietary software tools, low product failure rates, raised service levels, and standard hardware platforms. Furthermore, these vendors should adhere to open standards and best practice capabilities. These vendor attributes are the most significant in reducing costs throughout the PC lifecycle, thus resulting in lower TCO. Although the costs associated with switching PC vendors are often ambiguous, there are methods to employ to enable lowest-cost calculation comparisons.

Source: Robert Frances Group

As is evidenced in Table 1 above, most of the costs associated with PC lifecycle management appear to fall into the lower "common costs" quadrants. RFG believes, therefore, the enterprise can, and should, switch to PC vendors that offer comprehensive systems management tools to enable rapid enterprise deployment, imaging, maintenance, troubleshooting, and upgrade capabilities. Chosen tools should operate effectively regardless of application, language, and operating system constraints, and leverage the lowest lifecycle costs. To reduce the cost of switching suppliers, IT executives should evaluate and optimize their PC acquisition, deployment, maintenance, and support procedures.

IT executives can capture additional savings and flexibility by purchasing PCs from vendors that protect customers' hardware investments. Moreover, enterprises will substantially decrease costs through the use of next-generation tools that automate deployment, recovery, and updates, and enable creation of consolidated images. Further cost savings and decreased TCO can be captured using tools centered on business applications, rather than images based on hardware and user profiles to enable deployment, maintenance, and upgrade functionality.

For the most part, PC acquisition and deployment takes place either all at once, or in a phased approach. Enterprises either acquire new PCs all at once, wherein new systems are purchased and phased in throughout the corporation as quickly as possible, or through a timed approach. Phasing in new PCs can be done either strategically based on a logical grouping, such as common requirements, geographic location, or within an LOB, or using an ad-hoc or as needed methodology. Table 2 demonstrates the pros and cons of the three different strategies.

Source: Robert Frances Group, Inc.

The phased strategic model allows for both one-time and ongoing unique costs to be reduced, as compared with other acquisition and deployment models. One-time costs remain low, as coordination requirements and access to capital are staggered over the typical acquisition and deployment window. Additionally, the number of system images and PC types can remain controlled to reduce ongoing costs. This model allows the enterprise to capitalize on best practices and the acquisition, deployment, support, and update abilities of infrastructure management tools.

Reducing the number of applications, system images, and versions can be limiting and infeasible, as business requirements may dictate otherwise. IT executives have therefore had to manage numerous images and user customizations as needed; a tack that has eroded the cost savings afforded by standardization and automation efforts. A variety of tools are available from the major PC vendors and third-party providers to manage assets, configuration, deployment, diagnostics, fault detection, and system updating.

Although helpful, many client management tools go unused within the enterprise for many reasons. Some IT departments disbelieve, or do not fully understand the tools' capabilities. Others avoid tools because of their perceived learning curve, and some tools are avoided because they are deemed too vendor-specific, or are likely to be replaced. Some IT departments have developed their own tools, which need to be maintained on an ongoing basis, and which are both costly, and neither provide the organization with a competitive advantage nor competitive parity. Sometimes members of the IT support staff enjoy solving user problems without the aid of tools, despite whatever cost advantages there may be. Additionally, some IT support individuals want to be seen as "heroes," and thus do things manually to "rescue" business users who see these employees as "indispensable."

IT executives should consider working with PC vendors who provide tools, which automate most aspect of the PC lifecycle, as the return on investment to obtain and train support personnel is typically captured within four months. While limitations may exist in some tools, others' management tools provide capabilities that reduce TCO and save time. This is especially true when best practices and system standardization are in use. Additionally, some new tools can now help enterprises cope with extensive image management and user differences, including multi-language support. This provides further cost savings and increased service levels, allowing IT support personnel to concentrate on the business – applying their skills to projects that can help the enterprise gain competitive differentiation in the market – instead of on technology.

RFG believes the switching costs associated with PC acquisition, deployment, maintenance, and support processes can be minimized through strong vendor tools, an understanding of hardware vendor switching costs, and the use of best practices. Process automation is a key component to minimizing these costs, and IT executives should implement best-of-breed procedures and tools that enable simplified PC lifecycle processes, and reduce support requirements for personnel and technology. Minimizing customization, the number of managed system images, and personalization can further reduce per-system procedure and technology support costs. New tools can also help mitigate many of these costs throughout the entire PC lifecycle.

Copyright © 2002 Robert Frances Group, Inc. All rights reserved. Agenda products are published by Robert Frances Group, Inc., 22 Crescent Road, Westport, CT 06880. Telephone (203) 291-6900. Facsimile (203) 291-6906. http://www.rfgonline.com. This publication and all Agenda publications may not be reproduced in any form or by any electronic or mechanical means without prior written permission. The information and materials presented herein represent to the best of our knowledge true and accurate information as of date of publication. It nevertheless is being provided on an "as is" basis. Reprints are available.