Communications Technology: Finding Hidden Value in Your Company’s Internal Assets
By: Brian Folkes, Recovery Distribution Services
What are high value surplus IT assets?
It ain’t what’s on your desk, that’s for sure. We call that e-Waste and it is best handled by companies whose specialization is in recycling and data destruction.
What “IT” is, is networking and telecommunications equipment you might find in your company’s Data Center, Communications Center (Comm Center) or Network Operation Center (NOC). Usually this product will be in a 7’ high, either 19” or 23” wide, equipment rack or in a much larger cabinet. The “money” cards (called circuit packs) will be in shelves within the cabinets. The rest is scrap.
The reason this type of equipment is a high value commodity is because, unlike desk top IT, networking and communications equipment has a long life span. Does that sound unbelievable? Well, if your company happens to have a GTD-5 telecom switch, the value would be around $25,000 to $75,000 depending on the card configuration. That switch, incidentally, was first released in 1982, and discontinued from manufacturing in 2002! We have daily RFQs from telephone companies, large and small, regional and rural, still looking for network spares so they can keep their communications up and running in case a card breaks down.
Even in this new age of VoIP and digital communications, this technology is valuable. Think about a freeway that can no longer handle traffic without congestion. Do they replace a freeway every 3-5 years? No. They expand it by adding lanes to handle more traffic. Same deal with handling communications traffic. As more bandwidth is required to handle larger files, video and graphics, these older switches can be adapted to handle greater and greater volume.
Telecom companies around the word still need network spares. Not only telecoms, but also medium and large sized corporations have older comm equipment that will need network spares to keep going. So why not just replace older equipment at your company? Because it works and there’s a secondary market that supports it and repair depots that can fix what can’t be found any more.
Create business cases for the Investment Recovery Department to directly handle or be directly involved with, marketable communications equipment.
Now that you know what IT is and where to find IT, you need to find out who is responsible for the asset. Maybe it’s you? Your boss or coworkers? Purchasing or IT Department? If IR is not directly responsible for these high profile assets, you should be. After all, IR can always do a better job handling surplus assets given time, space and resources. There are a number of good reasons that the IR Department should have control of or, at very least, strong input into your company’s decision making process regarding surplus technology assets:
- Supervise t he resale of the assets directly
- Outsource to another company
- Advise another department within your organization
- IR personnel are the experts
Perhaps the most compelling reason to have the responsibility, or at the very least input, into the decisions regarding this type of product is because of its potentially high return. The department that returns the most to your company’s bottom line is the one that is visible and of value. In today’s tight world of limited budgets, providing value is what keeps you employed.
So how do you make the business case? This is the easiest part of all. Once you have found these assets (maybe not today, maybe next year) you can—with the help of a trustworthy secondary market distributor who sells upstream to end-users—determine the range of current market activity and pricing. This will prove invaluable to making your case for taking on the responsibility to move these assets. Once you have an idea of value, you can explore many of the options at your disposal including sale or consignment to a secondary market specialist. There are plenty of them out there. A few are even members of the Investment Recovery Association! Seek them out, run your product through them, and prove your value to your department and company.
The best business case of all is to ask the powers that be what they would prefer: That you find $100,000 of hidden treasures in the comm. room? Or that you discover the IT Department scrapped $100,000 worth of high value surplus because it was treated as if it was e-Waste?
Brian Folkes can be reached at email@example.com or 866.575.4994
This article is a reprint from ASSET 2.0, the Investment Recovery Business Journal (VOL. 2, 2012), published by the Investment Recovery Association, an organization dedicated to the professional management of surplus assets. Learn more at www.InvRecovery.org