In general, there are two reasons to upgrade or replace hardware outside of a direct customer request; the first is performance and the second is security. Performance issues cause losses in productivity that, if not quantified, the business owner may not realize how much they’re losing. Security is top of mind for many business owners today, but it may still be hard to justify the expense. So how do you effectively communicate the need to the business owner?
Quantifying Performance Issues
When it comes to performance, measuring how long it takes for an employee to perform a task on older equipment versus newer equipment provides an easy way to calculate return on investment (ROI).
Imagine this fictitious example: it takes five minutes for an employee to process an invoice but an equipment upgrade reduces the time to four. If that employee processes 30 invoices per day, the upgrade saves 30 minutes per day, or two and a half hours per week (on a standard five-day week). If you’re paying that person $25 per hour, you’ll have a weekly savings of $62.50. If the upgrade costs $500, it will pay for itself in two months.
As you can see, it’s easy to provide a quick ROI calculation for a slow or error-prone device.
Security is easier to sell these days because of all the publicity surrounding data breaches and ransomware in the news. In many cases, these events can cause an extinction-level event for a business of any size. As I write this, one industry news outlet is reporting the breach of 100 or more dental practices. If those practices don’t have backups of their data, they may have to close their doors. In fact, even if they have backups, the expense of getting back up and running can be extensive. If a dental practice that does about $1M annually (or $3,800 per day) has to close for three days to remediate and restore its systems, it’ll cost the practice about $11,400 in lost revenue alone. This cost estimate doesn’t include the time and materials for the remediation. If no backup exists, you should add the cost of paying the ransom as well. A vital way of helping prevent ransomware from getting a foothold in an organization is to ensure they’re using the most up-to-date hardware and software.
Hardware upgrades are important. Lost productivity can cost a business hundreds or thousands of dollars a week, which makes a strong business case that quickly recoups upfront expense through increased productivity. Likewise, taking steps to potentially prevent a security event, or dramatically reducing recovery time if one does occur, can save money and help keep a business from having to close. Learning how to calculate the ROI of the investment in those upgrades isn’t difficult and should be the basis for helping your clients make logical decisions.
Eric Anthony is the Head Operations Nerd at SolarWinds MSP. Before joining SolarWinds, Eric ran his own managed services provider business for over six years.
You can follow Eric on Twitter at @operations_nerd