Policy:Memorial regards the acquisition of computing and communications technology as a recurring departmental cost requiring long term budget planning.
Memorial will tender regularly for PC products and systems which meet established component level specifications, and for leading brand name systems or other systems which offer specific configurations, or offer better value, or which reflect market demand.
Pricing will be frequently updated between tender calls to reflect market fluctuations.
The Department of Computing and Communications (C&C) will regularly update PC component specifications.
Deans, Directors, the Executive Director of the Marine Institute, and the Principal of Sir Wilfred Grenfell College are responsible to ensure that the correct procedures and guidelines are observed. This responsibility may be delegated to Heads of Departments.
GUIDELINES FOR HARDWARE ACQUISITION
Generic Configuration versus Brand Names
Based on the experience gained by the University in supporting thousands of systems since PCs were first introduced, systems configured with components selected from the tested and approved list of detailed component specifications are generally recommended. These systems historically are more flexible to upgrade and easier to support and maintain. They have proven superior compatibility with a wider range of peripherals and software, and are cheaper to purchase.
Market-leading vendors are decreasing the amount of proprietary design in their systems, decreasing costs, and introducing attractive programs for the education community. Leading brands offer the comfort and peace of mind of dealing with recognized vendors, and generally include quality maintenance services, a wider range of finance options, and other value-added services.
Memorial's experience with many vendors since PCs were introduced indicates that there is no significant difference in reliability between the various classes of vendors.
Upgrading Versus Replacement
While systems will continue to operate for years longer, the industry's life-expectancy cycle for PCs - the period when the system will be adequately configured to accommodate current versions of popular software products - is three years. A typical system purchased 36 months ago can function for much longer in less demanding environments, or it can be selectively upgraded for less than the replacement cost. However, the comparable cost for replacement of the complete system, less monitor, does not cost significantly more after deducting the residual value of the old system.
The choice of whether or not to upgrade should take into account the following:
- some components supplied with the upgrade may be below Memorial's current standard;
- limited warranty will be carried on new components only, defective components may have to be returned to manufacturer for repair or replacement;
- some retained components may be below current standard;
- installation and setup costs may be significantly higher.
Support
C&C offers acquisition, installation, and software support for desktop systems in use at Memorial. The Computer Purchasing Center (CPC) and the Personal Computing Group provide related purchasing advice. Quotations are available via the CPC's web page and may be acquired via e-mail or by telephone at 864-2673. Current standards and pricing are also available at www.mun.ca/cc/cpc
Technical Services offers hardware support and upgrades for desktop systems.
Members of the University community who encounter computing problems of unknown origin are encouraged to contact the C&C Help Centre at 864-4595 or email help@mun.ca.
In addition to central services, several faculties, schools, and departments elect to provide support services internally.
Financing Options
Three financing options are in use at Memorial. The large majority of PCs are acquired through the outright purchase option.
1. Outright Purchase is based on a three year replacement cycle and is the cheapest of the three alternatives when the residual value of equipment is factored in the calculations. However, this option requires the complete cost of acquisition to be paid at the time of purchase, creating "bumps" in the budgeting cycle at the faculty/school/department level. Outright purchasing encourages long term retention of assets, although their utility in latter years may be limited. Assets acquired through outright purchase are the property of the University until disposal occurs. Thus, they can be reused internally or externally (reference disposal of University Assets Policy), or directed to other uses. Long term retention creates increased support costs as older and less-capable systems trickle through the institution. Disposal of assets is a significant task.
2. Bank Financing adds almost 8% to the net costs of the purchase, again after residual value is factored in. Finance terms tied to the replacement cycle ensure that there are fewer "bumps" in the budget process in that annual costs are continued each year. Needed equipment can be purchased all at once rather than waiting until sufficient capital is acquired, thus promoting homogeneity in a given environment, while allowing departments to equip facilities earlier and more completely. The disposition of the assets as they age is the same as if those assets were acquired outright.
3. Vendor Operating Leases are the most costly alternative, adding 16% to the cost of acquisition, in a three-year comparison (11% over four years), again assuming a three-year replacement cycle. Assets remain the property of the leasing company and must be returned or purchased at lease end. Regular replacement cycles are therefore encouraged/enforced. Trickle down of older systems cannot occur unless the assets are eventually purchased. The institution will employ more modern equipment and lower support costs. Maintenance costs may be lower as systems can, if the warranty period permits, remain on warranty for the period of the lease. The warranty period is not a factor of the lease itself unless explicitly negotiated; warranty periods are the same regardless of method of financing.
These options can also be assessed using a Net Present Value (NPV) analysis which converts cash transactions throughout the life of a financing arrangement to a present day equivalent, and factors in investment income from the deferred payments. NPV results in the extended financing options being much more attractive. Bank financing is actually recommended over outright purchase if assumptions of interest earning through investing the deferred payments, and the declining value of money are factored in. Vendor leasing is only marginally more costly. However, given that the investment assumption does not fit normal University practices, the straightforward method of analysis is preferred, resulting in the above financing recommendations. |