So your request for a capital investment for computer equipment was cut in half? You are not alone. That happens in tight budget years. This is especially true for small organizations who lack an IT capital budget, or with those senior managers who believe IT maintenance is an elective.
I once had a proposal for purchasing PC's denied. I had some savings in my operating budget, so I leased the PC's. A strait lease versus buy analysis suggested buying was the better option (slightly) [1]. But in the up and down of nonprofit budgets, sometimes you need to meet the demand by whatever legitimate means are at your disposal.
While capital expenses may rise and fall, operating expenses are usually more stable. Here's the kicker, operating expense allows your computer equipment to be "evergreen." "How's that," you ask?
While the average life of a PC or server is 3-5 years, every 3-5 years you are replacing your base of equipment.[2] That means a spike of purchasing from time to time. That's an opportunity for a "no" decision.
If you lease the equipment, the annual cost is relatively constant each year. So the replacement of equipment as it reaches the end of its useful life continues the lease expense, with little change to your operating budget. Consider this the IT hardware cost per employee.
If you take the longer view, a one-time lease versus buy decision changes. And lowest cost is not always the best answer.
Sincerely,Ed |