Management

Don't Be Penny-Wise and Computer-Foolish

23 Oct, 2013 By: Robert Green

Using outdated computers for CAD is a false economy that can waste staggering amounts of employee time. Here's how to open management's eyes.


One trend I've noticed during periods of low economic growth is that companies use their computers longer than usual in the name of saving money on hardware. Using a CAD machine for four or five years may seem like a wise choice to many senior management teams, but I see the issue differently.

In this edition of the CAD Manager's Newsletter, I'll make the argument that cutting corners on hardware updates often costs massive amounts of productivity — and labor dollars — when you consider the complete picture. Here goes.

Computers Are Cheap

I know some accountants will disagree with me, but computers really are cheap. In fact, considering everything they do, I would argue they are dirt cheap.

When an ergonomic chair costs $500, a plane ticket costs $400, and annual salaries with benefits start at $60,000, a computer that will crank out CAD work for three years is a steal at $3,000, adding only 50 cents per hour to the labor cost of an information worker's cost over a three-year lifespan ($3,000 divided by 3 years comes to $1,000 per year, which is then divided by 2,000 man-hours per year). Even high-end machines tipping the scale at $6,000 add only $1 per hour in labor costs per employee.

And when you consider that leasing and financing options can negate the big up-front cost of purchasing new computers — while delivering tax write-offs immediately — getting new machines doesn't have to be painful financially.

To put it another way, you can power up your employees with a new computer for 50 cents to $1 per hour — which may be less than your company is presently spending on coffee for that employee. Have you ever thought of it that way?

A Real-Life Example

To illustrate the folly of keeping an old "boat anchor" computer in service, I'll present the true story of "Jim" — a client I've worked with in recent years. Jim is a structural engineer who does a lot of analysis work on very large concrete and metal truss building structures. He runs a variety of CAD and calculation programs to model static and seismic loads, and all are memory-hungry, data-intensive applications.

Every other day or so, Jim needs to run major analytical calculations on his old dual-core machine that features a whopping 6 GB of RAM. When faced with larger file sizes, this clunker often locks up, and Jim has to start over. In any given week, Jim loses at least five hours of processing time because of these types of problems. Not only are these delays very frustrating for Jim, they also hamper the progress of other personnel who need Jim's results to proceed with their work, and they ultimately lead to increased project turnaround times and even missed deadlines.

Now here's where it gets interesting:

Jim is a very highly compensated engineer ($110,000 per year) whose billable rate approaches $80 per hour. This means that every week, Jim is losing $400 in productivity (five hours at $80 per hour) due to lockups. If Jim works 48 weeks per year, this number jumps to an astounding $19,200 in lost productivity per year, or $57,600 over the three-year life of a computer.

Currently Jim cusses a lot, works weekends, and just isn't a happy camper in general. So Jim is disgruntled — and his company is losing $19,200 each year — because his management team believes that a new $6,000 workstation is way too expensive.

Does this strike you as penny-wise and computer-foolish?

The Underlying Problem

So why is it that companies hire people like Jim, pay for their high salaries and extensive benefits, and entrust them with huge client projects— yet refuse to purchase a computer that can make them productive?

The answer I've observed is that, in most cases, companies genuinely don't understand how much more computer power it takes to run CAD programs. The reasons typically are quite simple: Senior managers and IT personnel don’t use CAD, and CAD managers typically are not involved in specifying, budgeting, or approving new computers, so no one with any CAD-specific knowledge is involved in the purchasing process.

When CAD managers aren't in charge of specifying the machines, IT doesn't know how to appropriately specify the machines, and senior management isn't aware of what they need to spend — let alone the ramifications of cutting corners — the unfortunate end result is that the decision makers think, "A computer is just a computer, so who really cares what we buy for our CAD people?"

If that's the case in your company, what are you to do about it? Let's explore some solutions.

Fight for the Right Tools

To get the hardware your CAD users need, you'll have to get in the ring and fight for them. Here are the key steps you need to take:

Quantify the power required for the job. You can start the discussion with the system requirements your software vendors specify, although I've found those recommendations tend to be minimally adequate. You can then make the argument that today's minimum requirements will be substandard by next year, so more robust machines must be purchased to stave off obsolescence.

Specify the hardware that will provide that power. If CAD managers understand what new hardware configurations can offer their power users, they'll be able to specify machines that get more work done with fewer man-hours and less user frustration. (Note: We'll explore this topic in detail in a future issue of the CAD Manager's Newsletter.)

Get IT's attention. This step doesn't have to be adversarial; it simply requires the CAD manager to demonstrate the unique needs of CAD applications and offer a few real-world cost scenarios (like Jim's story). This is where your homework in specifying the right hardware really pays off, as your arguments will be supported by factual evidence.

Get budget approval. Once you've convinced IT, you'll need to get the money from your senior management team to make the new machines a reality. During this phase, the story of Jim (or similar horror stories from your own company) are your best ammunition, as the entire justification is financial and based on business metrics.

Advocate a roll-down program. To mitigate the cost of new machines, explain that today's fast CAD machine is going to be just a regular computer in three years. Explain that the company can still get five years of use out of these machines — the first three years will be as a CAD machine, and the final two years as a general office computer. After all, a shipping clerk or word processing user doesn't need the fastest machine to do their work, but a CAD user does.

Summing Up

I hope I've given you enough inspiration and ammunition to make the case for equipping your users with high-performance CAD machines. Now, you can illustrate the penny-wise, computer-foolish argument for your management. Feel free to use the story of Jim to make your point!

In a future edition of the CAD Manager's Newsletter, we'll look at how to determine the optimal configuration for your CAD workstations. Until then.


About the Author: Robert Green

Robert Green

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Comments

Re: Don't Be Penny-Wise and Computer-Foolish
by: jaanthud
on:
October 23, 2013 - 1:35pm
Sure, I went out last year and purchased a new computer, with Windows 8. Wouldn't recognize Autocad when I tried to install it. Has Autocad come up with a workaround for previous versions of Autocad? Or do we all need to purchase new versions of Autocad along with the new computer? How are the economics then if this is true?
 
Re: Don't Be Penny-Wise and Computer-Foolish
by: Nancy_Johnson
on:
October 24, 2013 - 6:22pm
You definitely don't want to be buying new hardware for old software (or vice versa, for that matter). Always check the software specs to see what you need in terms of hardware and OS! As for determining the economics of new software investments, it's a similar process. If your current software is crashing or doesn't perform the functions you need, a new version could pay for itself in terms of the productivity you gain.
 
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