LCD Monitors
White Paper | October 2005 When LCD Monitors can reduce TCO |
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When LCD Monitors can
reduce Total Cost of Ownership
For further information about Philips professional monitors
please contact us via www.professional.philips.com
October 2005 - Authors: E.L. van ‘t Hoff & P. T.H.C. van Laer
Saving of up to 10% can
be achieved on an annual
basis when using Philips
LCD monitors together
with Philips SmartManage
asset management tool.
White Paper
White Paper | October 2005 When LCD Monitors can reduce TCO |
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Content
1.
Introduction 3
2.
Monitors: vital part of the desktop configuration 3
3.
Defining Total Cost of Ownership 4
4.
The TCO of an LCD monitor 5
4.1 Acquisition phase 5
4.2 Deployment phase 6
4.3 Operation phase 6
4.4 Retirement phase 7
5.
Philips solution for reducing TCO costs 8
5.1 Reducing TCO with Philips LCD monitors 8
5.2 Making further TCO savings with Philips SmartManage 9
6.
The TCO of Philips LCD monitors 12
6.1 Specifications overview 12
6.2 TCO breakdown 13
7.
Significant TCO savings with Philips monitors 14
Specifications are subject to change without notice.
Trademarks are the property of Koninklijke Philips Electronics N.V.
or their respective owners.
© 2005 Koninklijke Philips Electronics N.V. All rights reser ved.
White Paper | October 2005 When LCD Monitors can reduce TCO |
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1. Introduction
Controlling total cost of ownership (TCO) has been the goal of every good IT manager for the
last 10 years. IT managers are well aware that the costs incurred af ter the initial deployment of a
PC network can add up to 80 per cent of total IT costs. But when they are controlling TCO, most
decision-makers still focus primarily on their PCs, software and IT infrastructure. Little attention is
given to the life-cycle costs of LCD monitors - despite the significant role that these play in both
user satisfaction and productivity.
Philips has adopted an overall strategy focused on optimizing the life-cycle costs of LCD monitors.
Rather than concentrating solely on reducing the initial purchase costs, Philips is the first supplier to
address the specific needs of each life-cycle phase. The result is a range of outstanding LCD monitors, together with an asset management tool that helps companies to substantially reduce their
TCO costs. This white paper aims to provide an over view of the life-cycle costs of LCD monitors
and of all the individual factors that can influence those costs, and how these cost-relevant factors
can best be addressed. Identifying and understanding the components of life-cycle costs is the first
step towards controlling and reducing them.
2. Monitors: vital part of the desktop configuration
End-users operate their PC software by using a keyboard and a mouse, but more impor tantly by
looking at their monitors. The monitor is what they see in front of them, day in day out as shown
in Figure 1, while the PC is often stored under the desk or in a docking station, in case of a laptop.
A monitor without enough brightness, contrast or color depth will cause eyestrain and reduce
productivity. A monitor with faulty pixels will cause irritation, generate help desk calls and eventually result in a warranty claim, meaning extra IT suppor t costs and temporar y downtime for the
end-user. In other words, as far as end-users are
concerned the monitor is what provides their
‘window’ on their application and on the content of their work, which makes it a strategically
important tool for them.
However, for IT depar tments monitors are often
not given the impor tance they deser ve. Key purchase criteria are mostly based on size, design,
price, display performance, warranty conditions
and specific features such as I/O capabilities and
on-screen display facilities. Features affecting
life-cycle costs are often overlooked. Companies
may have a good idea of where their PCs and
other IT devices are located at any time, but can
rarely answer this and many other vital costdetermining questions about their computer
monitors:
• How many monitors are being used in the organization?
• What are their brands and configurations?
• Where are they located ?
• Which monitors are being leased and which are owned?
• What is the impact of all installed monitor s on the total power bill?
• What measures are in place to prevent hardware theft?
• What are the operating hours per monitor, and what are the replacement criteria?
• What is the warranty expiry date?
Figure 1: The monitor is the vital visual interface with the
end-user, and the dominant component at the workplace
White Paper | October 2005 When LCD Monitors can reduce TCO |
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Some additional facts and fi gures about monitors underline their importance in the overall costs
picture. For example:
• The purchase cost of an LCD monitor is of ten more than 50 % of that of a standard PC
(see Figure 2)
• 35% of the power bill of a typical desk top confi guration is accounted for by the monitor.
The PC itself only consumes twice as much (see Figure 3)
• The theft r isk of an LCD monitor is at leas t 3 times that of a PC. Like laptops, LCD
monitors can easily be removed and are also in great demand. The theft rate of LCD
monitors is estimated at 1% per year
• The technical lifetime of a monitor can easily be extended to more than 5 years, while a
PC is ver y often written-off after 3 years
• PCs are identifi ed with asset tags and managed by a centr al system. Monitors are often
considered as ‘consumable’ accessories
One more possibly surprising example: when employees leave or move to other depar tments,
their PCs are always returned to IT for a ‘sanity check’ and to reload standard settings. But
the monitor just stays on the desk, awaiting its new user. Impor tant settings like brightness and
contrast – which are strongly related to users’ individual preferences – are left unchanged, even
though the new user will require his or her own settings.
LCD Monitor
31%
PC unit
69%
LCD Monitor
33%
PC unit
67%
Figure 2 : Price breakdown of typical PC set-up Figure 3: Power consumption breakdown of a typical PC set-up
3. Defi ning Total Cost of Ownership
Total Cost of Ownership (TCO) is a business model to help organizations determine the total
cost of procuring, owning, using and disposing of assets over time. TCO attempts to capture all the
costs of IT-related investments throughout their life cycle. Four life-cycle phases are distinguished
(see Figure 4):
• Acquisition: needs assessment, end-user surveys, vendor evaluation, planning
and procurement
• Deployment: site preparation, de-installation of existing equipment , installation and
confi guration of new solution, on-site testing, user training and validation
• Operation: day-to-day usage, end-user support, moves & changes, hardware and software
maintenance, war ranty handling, asset management , power supply etc
• Retirement: removal and disposal of equipment at the end of its useful life
Acquisition Deployment Operation
Retirement
Figure 4 : The 4 phases of Total Cost of Ownership
White Paper | October 2005 When LCD Monitors can reduce TCO |
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Each of these phases has different cost implications, and their relative importance varies from
equipment to equipment. For example, the costs of evaluating and selecting new technology such
as wireless LAN are typically higher than those related to desktop PCs.
Also, note that TCO measures costs, and not the return on investment or value derived from the
investment. For example, TCO will determine the cost of owning an LCD monitor - but not the
added value and direct user benefi ts of a new 19” monitor with ‘Perfect Panel’ specifi cations and
outstanding display performance.
4. The TCO of an LCD monitor
Companies consider the purchase of new LCD monitors to replace old CRT models or to upgrade
their installed base with state-of-the ar t technology. The reason for doing this is often driven by
the need to standardize on a higher screen size or to help end-users work more productively.
Reducing TCO is often not considered. This section explains why companies should put TCO high
on their list of purchasing criteria for LCD monitors. For each life-cycle phase, a number of recommendations are given for minimizing TCO. These recommendations are by no means exhaustive,
the focus is on TCO-related issues. Figure 5 shows the specifi c cost-relevant activities involved in
each life-cycle phase.
4.1 Acquisition phase
The identifi cation, comparison, selection and purchase of new LCD monitors that best meet all a
company’s needs right through the life cycle can be a time-consuming task. Valuable time and effort
can be saved by choosing a display vendor with the right processes in place to simplify all the steps
during the acquisition phase.
• Product information should be easy to fi nd and complete, preferably on-line. This applies not only to spec.
sheets, but also to approval certifi cates, user guides, technical drawings, warranty statements and compatibility
overviews
• The vendor should ac tively suppor t the evaluation process with, for example, test samples, testimonials,
benchmark data, review repor ts and white papers
• Product pricing should be unambiguous and where necessar y tr ansparent
Information about the vendor should be provided on request , suppor ted by fi nancial data, organization
structure, long-term strategy, global presence and related pricing, warranty and supply conditions, sustainability
policy etc.
• The product should be available through the customer’s preferred reseller or system integrator. Simple, effective procedures should be in place to allow such third-party companies to check availability and place orders
• support end-users
• handle defects and manage
warranty claims
• cater for hardware theft
• register moves & changes
• manage power bill
• update asset data
Acquisition Deployment Operation
Retirement
Figure 5 : Typical activities during the life-time of a LCD monitor
• identify needs
• select suppliers
• evaluate samples
• plan deployment
• purchase selected
monitors
• stock received order prior
deployment
• deliver on-site and unpack
• install and confi gure
• validate functionality
• handle ‘dead on arrivals’
• register in asset mgt. tool
• store or dispose
packaging material
• track installed park
• determine monitor quality
status
• select monitors for extended
usage
• register moves & changes
• remove and dispose monitors
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