Revise Your Technology Refresh Strategy
By Masha Zager
High on the list of certainties, right after death and taxes, is the knowledge that the computers your company bought just three months ago are already obsolete. But when is the best time to upgrade?
When developing technology refresh strategies, enterprises are caught between the pull of new technology and the realities of budgets and operations. While these competing forces play out differently from company to company -- sometimes from business unit to business unit -- the underlying issues are similar.
Until recently, hardware refresh strategies were often driven by tax depreciation schedules. Many companies were unwilling to replace assets on the books, even if their real value was little or nothing.
During the last five years, with prices falling and computers becoming more powerful, accounting imperatives have become less important. "The asset may not be depreciated, but the business isn't getting any value [from the asset] because it can't take advantage of the newer software it needs to compete," says Mike Yudkin, senior vice president of Design Strategy Corporation in New York City. During the last few years, he has seen more companies expensing their equipment and others moving to shorter, usually three-year, depreciation schedules in order to gain earlier access to new technology. (article continues)
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