The WEEE (Waste Electronic and Electrical Equipment) Directive, the recycling framework set by the EU, brings fundamental changes to the way businesses deal with IT equipment, but it's usually accompanied by a bag full of mixed messages from the government. Ultimately, it will mean you can no longer dump old products, bringing added responsibility to retailers, distributors and end users to dispose of goods in an environmentally friendly way.
The tendency for many businesses is to view the requirements as a headache. They bring added responsibility to IT departments that are already working at full throttle, and an extra cost to suppliers working on paper-thin margins.
However, a growing sector of the IT services market claims the legal obligations brought about by WEEE will provide a welcome nudge to businesses, convincing them that now is the time to improve their asset-management strategies. Your business, they claim, can reap the rewards of a watertight recovery policy, whereby you reuse or resell the three-year-old PCs currently destined for the skip.
The directive affects all forms of IT equipment, but those advising businesses to make more of their redundant goods pick out PCs and laptops for special attention. There are no concrete figures on the number of systems thrown away by UK companies, but one specialist in the reuse of office equipment estimates that up to two million working Pentium-based PCs are dumped in landfill sites every year. Another firm claims 98 per cent of the potential clients it comes into contact with are unaware their throwaway goods have any value, despite the fact that the vast majority of those systems are nowhere near the end of their life and can continue to be used elsewhere by other businesses, charities or schools. These companies say it's time for a change in attitude.
What is it?
All sorts of methods have been used to explain the extent of the manufacturing sector's impact on the environment, not least the creation of the WEEE Man. Built by Canon and the Royal Society for the Encouragement of Arts, Manufacturers and Commerce, it's made from seven tonnes of defunct computer and electrical equipment and is said to represent the average amount of technology used by a single person in their lifetime. At the current rate, 90 per cent of each person's electrical goods will end up in a landfill or be incinerated, instead of being reused or recycled.
WEEE is designed to tackle this problem by putting the onus on suppliers to legally dispose of products they sell when they're no longer needed by customers.
The EU has been working on the directive for over five years, and the final plans were first published in February 2003. According to the initial guidelines, the responsibilities were due to be in place this summer, but most countries are yet to implement them.
Earlier this year, the DTI said it had encountered 'major practical difficulties' in the preparation of the planned implementation of WEEE this August, revealing that most of the directive wouldn't be written into the statute books until January 2006.
However, a DTI spokesperson told us immediately after the announcement that, rather than committing to the January date, officials were 'hopeful' it would meet the deadline. Industry experts believe it won't come into place until later next year, with the balance of opinion suggesting the full UK implementation will be put back until spring 2006.
Despite the delays, business buyers are advised to make clear provisions for their new responsibilities. No longer should your company store old equipment in cupboards, no longer can PCs be passed about on an ad-hoc basis, and no longer should buildings and facilities staff be held responsible for old computers. If the PCs in your business are going to be passed on to anyone outside the company - whether they be recyclers or charities - you must make sure the data has been properly removed by a trusted IT support technician. Many companies will rely on in-house staff, but there's a growing number of third-party firms with the technical resources to take that particular burden on.
What it means
In theory, the implementation of the directive won't impinge upon those who hold the corporate purse strings. The producer-responsibility concept means the supplier is accountable for picking up and disposing of old IT products. However, the whole process has to be paid for and it's likely the added expenditure on the part of the retailer or distributor will be funded by a higher upfront cost. PC prices, for example, will increase slightly to pay for the recycling fees required at the end of the product's life.
The supplier that sells IT equipment to your company is, by default, responsible for collecting, recycling or reusing the systems it replaces. If you buy 100 new systems from a supplier then WEEE allows for you to return 100 old systems - like for like - no matter when you bought them or where you bought them from.
Specialists in the field believe many firms aren't aware they're allowed to 'give back' old IT equipment that may have been sitting in a store room for five years.
'If the customer wants to do that, it's absolutely legitimate,' said Claire Snow, director of the Industry Council for Electronic Equipment Recycling.
'The subject of "like for like" is being worked out on a pragmatic basis. In theory, it's got to be like for like in terms of function, so it's possible you'll be able to give someone three machines back for the one you've bought in the case of [multifunction devices] that print, scan and photocopy.'
One source told us such a policy would be an added incentive for companies that have considered upgrading to Voice over IP, but currently face the headache of how to dispose of their bulky PBX equipment.
And, from August 2005, all electrical and electronic equipment put on the market in the EU has to be labelled to highlight the fact it can no longer be sent to a landfill site. That will give users an extra reminder of their new responsibilities.
However, many people won't deal directly with their supplier, as a lot of manufacturers are joining compliance schemes whereby a third party assumes the role of a collection and recycling agency. 'The idea of a compliance scheme is that it's an umbrella organisation which provides a service to producers,' said a spokesperson for the DTI. 'The compliance scheme would take on the responsibilities that a producer would otherwise have, such as registering and ensuring that appropriate records are kept.'
It's the easy option, and certainly the sensible one for business buyers who want to get rid of very old equipment.
DIY WEEE
However, the more astute companies may choose to bear the burden themselves. The constant release of new, higher-specification PCs devalues the systems on your company's desktop almost immediately, but there's still value in systems that are two or three years behind the bleeding edge. So why not sever your ties with the supplier and get some money back on your investment?
'At the point of sale, you should agree who's responsible for taking the product back at the end of its life,' said Kevin Riches, managing director of Technical Asset Management (TAM), a Hertfordshire-based company that specialises in the remarketing and disposal of redundant IT equipment. 'Resellers are going to be smart and try to take the responsibility, because it ties the customer in. Don't be fooled when the supplier says they'll do it for you. If you let that happen, you're giving them the money they'll make on the resale.'
The market for refurbished computers is growing and, while charities and schools in third-world countries are often publicised as the biggest potential beneficiaries, specialists in the field claim there's enough demand from paying customers in the UK to create a lucrative business. 'Start-up businesses are a key area,' said Peter Paduh, managing director of redundant equipment reseller Maxitech. 'They might not want the top-of-the-range PC, but they still want to buy a reliable product.'
As well as selling your company's old IT equipment to other businesses with less demanding requirements, service providers like TAM offer a staff sales programme. The company says that while selling old PCs to staff initially seems like an ideal way to get rid of redundant equipment, the costs associated with the administration, security, software licences and support soon add up. So TAM takes your obsolete equipment, refurbishes it and then integrates it with software and peripherals to your employees' individual requirements. TAM promises all equipment is subject to the strictest safety inspection and tests, it runs a customer services desk that can liaise with your staff directly, and it takes care of any liability and support issues.
CASH BACK
So, how much are the ageing laptops on the desks of your sales team worth? Not much if your company has a policy of running systems into the ground and only buying a replacement when the system finally breathes its last breath six years down the line. But Riches said companies that work on a shorter refresh could reclaim a significant amount of money: 'Many companies are on about a three-year refresh, and IT managers will cotton on to the fact that their three-year-old laptop is still worth £150.
'Overall, the net amount of money they could put back into their business is 5 to 8 per cent of whatever they're spending on hardware per year. Every company is different, but for a company with 400 employees they might be spending £300,000 per year on IT. They should be getting £25,000 back just by being a bit smarter about products at the end of their life. All businesses should be doing it without exception.'
Riches said a study his company produced with Accenture revealed some interesting insights into the way business users treat their PCs. The research showed that IT departments get a lot of calls from users when the new PCs or laptops are first installed, but IT phone lines soon calm down once people are used to their new system.
However, technical support staff receive a suspicious number of calls about broken systems during the last six months of the lifecycle. 'People get brassed off. They think, "I've been here for five years, I've got a lower-spec laptop than someone who's been here for five minutes. If mine breaks, I get a new one". So they get broken,' said Riches. 'If you take that bath-shaped curve and look for the optimum point in terms of value, then you overlay that with where the price of the product should be, you'll find that laptops should be refreshed every 20 months. That's the cheapest thing you could do, because it puts up your volume, so you get a better price.'
Action plan
The WEEE Directive promises to offer UK businesses an added incentive to make the most of the equipment they previously regarded as worthless.
Rather than being a burden, some suppliers are already achieving early compliance in a bid to create a 'green' brand, and many buyers are embracing the concept of environmental awareness under the banner of what the government likes to call 'corporate social responsibility'. But it's the potential financial gains that go hand in hand with the efficient disposal of products that will capture the attention of many IT managers and managing directors.
Look at the IT equipment your company is throwing away. The responsibilities, burdens and benefits of the WEEE Directive can be a can of worms, but it pays to have a clear strategy. This could be just the incentive your company needs to reclaim some money that would otherwise be thrown away. For larger firms, the savings could be enough to pay for another IT support worker.
Author: Paul Trotter
What WEEE can do for you