In this blog series, we first addressed how data center is a different kind of ITAD than corporate IT. We then explained how data center decommissioning and enterprise ITAD are two different playing fields.
Having read those articles, it only stands to reason then if data center decommissioning is a completely different ballgame, which is played on a distinctly different playing field according to a unique set of rules, then it would also require an entirely different way of measuring program success. ITRenew’s Total Return methodology provides this framework.
Total Return is a term used in the financial space for measuring the actual rate of return of an investment, taking into account a breadth of factors over time. The term has similar purpose in data center IT asset disposition. The methodology is built upon our core operating philosophy that the success of every data center ITAD project should be measured based on actual value gained or lost, not simply by a bid price. No matter whether the project entails asset decommissioning, IT hardware refresh, equipment consolidation, data center migration or shutdown, IT lease return, or hard drive RMA. The measurement for a successful data center ITAD operation should furthermore be rooted in the things that matter most to your organization including: data security, operational efficiency, environmental sustainability, and financial return.
Total Return goes beyond standard measures like Service-Level Agreements (SLAs), which are good for tracking whether your ITAD service provider is contractually meeting its obligations. However, SLAs are not as effective for measuring the actual dollarized value you’re getting out of your data center decommissioning program. Total Return systematically evaluates success criteria and answers questions such as:
- Is my sensitive data secure, but also at what cost? Am I sacrificing financial and sustainability value for security purposes? Are my security practices actually adding cost and/or risk?
- Did I get fair market value for my data center IT equipment, but also how much of my decommissioned IT equipment was actually sold? In addition, what were my net proceeds after all ITAD fees and cost of goods sold are factored in?
- What are my total ITAD program expenses, but also what are the opportunity costs in terms of time, labor, floor space, and budget allocation? In other words, how could I otherwise put those precious assets to productive use if I could drive better efficiencies and performance out of my data center ITAD program?
Total Return in Data Center ITAD
ITRenew encourages companies to take a Total Return approach to data center decommissioning for two reasons.
- Total Return helps companies comprehensively measure overall data center ITAD program ROI. It applies a methodology to measuring the ways that change the entire ITAD value equation in data center decommissioning. Total Return provides the framework to calculate savings associated with data center IT asset lifecycle, logistics, disposition, and data sanitization activities.
- By implementing the Best Practices in Data Center Decommissioning necessary to optimize Total Return ITAD performance, companies can apply the efficiencies gained to free up valuable resources that are redirected to strategic data center initiatives.
Total Return furthermore enables companies to baseline the performance of their entire data center decommissioning program, as well as individual data center ITAD projects. In calculating the actual value gained (or lost), Total Return factors in a variety of performance metrics including:
- Labor costs of processing data center clusters onsite and the savings associated with freeing up valuable IT resources.
- Data center cluster processing time and the financial impact of freeing square footage for more revenue production.
- Data sanitization yield rates and the associated cost reductions and revenue production.
- Fair market value analysis of IT inventory and financial opportunity of value-optimized asset remarketing.
- CAPEX impact of processing RMA-eligible hard drives for credit or replacement.
- Overall data center disposition costs and net program proceeds after costs of goods sold.
Selfishly speaking, there is one more important reason ITRenew recommends a Total Return examination. When data center operations conduct a such a thorough analysis of their decommissioning program and disposition activities, ITRenew’s solution is clearly distinguished from all other ITAD vendor offerings. There are several reasons why, but it all starts with Teraware, our proprietary data sanitization and asset management software platform. Compared to other tools, Teraware delivers significantly higher data sanitization yields, which in turn delivers significantly higher reusable hardware yields and reduces costs. As an enterprise-grade software platform, Teraware is also considerably faster, far more operationally efficient, and is infinitely scalable. In addition, Teraware software is ADISA certified on all data center storage media, ensuring compatibility for any brand, type, or capacity of hard drive including solid-state drives and high-capacity drives.
Breaking Down Total Return in Data Center Decommissioning
To help companies understand what ITAD processes they should measure and how they can go about improving Total Return results, we will analyze five key areas of data center decommissioning and IT asset disposition including:
- IT asset and data security
- Data erasure and reusable hardware yield
- Remarketing and value recovery
- RMA and break-fix management
- Productivity from data center decommissioning
Please return next week for the first article in the final installment of our data center decommissioning blog series.