The way in which IT equipment is valued by finance departments costs IT managers at least 10 per cent of their infrastructure budget, IT recycling specialist SML has claimed.
Current accounting processes may not reflect the actual market value of the equipment, and financial directors need to realise that data centre assets have a longer-term value, according to Phil Reakes, managing director at SML.
"Part of the problem is that things develop very quickly," he said. "People are upgrading their mission critical systems over two to three years and accounting policies have not kept pace.
"The net effect is that accounting policies are stopping IT managers from upgrading because it is seen that the company will lose money."
The result is that IT managers are losing out on funds to invest in new IT equipment.
Instead of waiting until IT equipment is worth nothing before disposing of it, running up support costs in the process, Reakes urged companies to upgrade earlier to recoup part of their initial costs.
"Planned and timely recycling makes good environmental sense, of course, but missing out is like throwing away 10 per cent or more of the IT infrastructure budget," he claimed.
But Reakes warned that IT managers must work more closely with the finance department to bring in-house accounting policies into line with their IT strategies and change the way that the value of IT equipment is assessed.
"It opens up the debate of whether IT should report through finance," he explained. "IT managers need to have a greater understanding of the detrimental depreciation policy on data centre assets.
"A shrewd IT manager would probably find that he had more money to spend on new kit if he purchased in line with accounting practices."
But Paul Booth, technical manager at the IT faculty of the Institute of Chartered Accountants in England and Wales said: "If a company wishes to be leading edge it has a certain attitude to risk and reward and is more likely to look for the latest technologies.
"But in practice it's unusual that equipment is past its sell-by date before it is written off. There's got to be a business case for new investments. A lot of IT users don't exploit a fraction of the functionality of the technology but suppliers continue to throw more at them and there is a conspiracy to make everyone upgrade."
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