Computer hardware: the basics

Before purchasing computer hardware, you should consider what benefits it might bring to your business. This might affect what type of hardware you choose. For example, new computer hardware could:

• reduce costs by automating routine tasks
• improve customer service or supplier relationships through more effective communication
• improve your business efficiency
• extend your business offer - eg through an online shop, support facility or download centre

Once you have listed the key hardware investments you could make, look at the cost/benefit relationship. This will help you to prioritise and see which you can afford now, and which can wait.

However, while investing in computer hardware can bring benefits to your business, you should make sure that any hardware you do choose is compatible and worth the investment.

Purchasing new computer hardware can bring several benefits to your business. However, you should make sure that you make the right decision and choose the hardware that best suits your business needs. There may also be long-term, legal or security issues to consider when purchasing new hardware for your business.

Compatibility

Make sure any new or replacement hardware is compatible with your existing computer equipment, some of which may need upgrading. Think carefully about the overall costs, and whether it might be more cost-effective to simply install a whole new system.

Keep a register of your hardware

Keep a list of purchase dates and cost of hardware, which will be helpful for accountancy, tax and insurance purposes.

Plan for the future

You should have a long-term IT strategy that - as far as possible - takes into account any future changes in your market, your employees and your products or services. If possible, try to integrate hardware and software strategies in your business.

Replacement and disposal of old hardware

Many businesses work on a replacement cycle of about three to four years for desktop PCs and five years for servers.

Redundant computer hardware must be disposed of in an environmentally sound way. In some cases, the manufacturer can arrange free collection from you, but retailers or suppliers may charge you to dispose of the equipment.

Security

It's important to take security measures for both hardware and data. This should include physical security measures such as security cables, locks and cages and measures to secure your data - eg by backing the data up in a second location and installing anti-virus software, firewalls and intrusion detection software.

If you carry out all your work in one place, a desktop computer will meet your needs and will offer the best price for a given level of performance. Desktop PCs are generally more durable than laptops.

Desktop computers can generally be repaired and upgraded by local computer shops using standard off-the-shelf components. This can extend their life considerably. Laptops are more difficult to repair and may need to be returned to the supplier.

If you need to use a computer while away from your office, a laptop can be invaluable. They are particularly suitable for salespeople making client visits and for employees who work from home.

A laptop can be used in place of a desktop PC for workers who occasionally need to work in the office. In this case, you should consider a docking station that allows the laptop to be connected to the existing business network and a power supply.

Laptops are easy to steal and need additional security measures such as a security cable to lock them to a desk when away from base. Most laptops on the market are equipped with a Universal Security Slot that allows them to be attached to a cable lock or laptop alarm.

Some workers may benefit from having a smartphone, tablet computer, netbook or other handheld computer rather than a laptop. These devices can synchronise data such as diaries, telephone numbers and short documents with a desktop computer. They are also ideal for workers who need to make notes while out of the office. When combined with cloud computing services, mobile devices can provide a convenient way of accessing business information while on the move.

Servers store data and programs that will be shared and used by many different people. A typical small office with a number of desktop PCs will have one or more servers connected by a network.

Think of a server as a shared resource and a repository for your business information. Given its central role, its specification needs to be much greater than the typical desktop computer.

The disk storage capacity of your server needs to be large enough to keep all the current data for your business.

Your server must be capable of rapid repair, since a breakdown will halt most of your IT functions. Servers are often built so that key components such as disks and power supplies can be quickly changed. More expensive servers will have redundant components, so that if one fails another will take over automatically.

Servers are normally kept in a secure, temperature and humidity-controlled location, often alongside your networking equipment. It is important to prevent casual access to your server because of the damage that could be done to your business information, as well as physical damage from dust and other contaminants.

A server maintenance contract is a wise investment, especially if you have limited in-house IT expertise.

If you have several desktop computers and peripherals such as printers and scanners, it may benefit your business to have them networked together.

A network allows data and resources to be shared, improving both efficiency and speed of working.

Originally, all computer networks used fixed wiring to link PCs and peripherals. However, many businesses now have wireless networks - which are ideal for workers who need mobility - or wired networks with wireless hubs in shared spaces.

Printers are essential for most businesses. There are three basic types of printer.

Laser printers produce colour or black print and are suitable for most office printing needs. They are more expensive than other types of printers but are more economical if you do lots of printing and are relatively fast.

Inkjet printers are used for either colour or black printing. Some inkjet printers can produce photographic quality images. Although cheap to purchase, inkjet supplies, like paper and ink, make them expensive per page printed. They are also slower than comparable laser printers.

Impact printers such as dot matrix printers, are now rarely used except for special purposes, eg for printing forms used with accounts packages.

Printers can be directly connected to desktop PC or laptops, or shared on a network. Shared printers are preferable for most small offices, but some workers may need a personal printer in a secure location, particularly if they are dealing with sensitive or confidential information. Unless you have in-house expertise, consider paying for a maintenance contract for your printer. Any failure of the equipment can then be dealt with quickly, reducing disruption.

Scanners are used to capture images digitally. They can be useful for storing content digitally that is only available in print and for extracting text from documents such as books. Scanners can be connected directly to a desktop PC or laptop.

You could consider a multi-function device combining a printer, photocopier, fax machine and scanner. They have several advantages:

• the total cost may be lower than the combined cost of separate units
• they save floor and desk space
• there is less to install

However, such devices may not deliver all the performance available from separate units and, if they fail, you lose all the functions at once and will need to replace the entire unit.

When you decide to acquire computer hardware, you have a choice between buying outright, hire purchase or leasing. The route you follow will depend on your business needs, your budget and the level of advice and support you need.

Advantages of buying computer hardware outright

• For small businesses, being able to deduct a percentage of the value of their IT investments from their taxable income. This includes hardware, software and mobile phones.
• Not being tied into medium or long-term agreements which may be difficult to end if your needs or circumstances change.

Disadvantages of buying computer hardware outright:

• pay the full cost up front - this may cause cashflow pressures as you can't easily spread the cost to coincide with money coming into the business.
• replace equipment regularly - computer equipment depreciates quite quickly in value and may be obsolete after a few years, requiring a further investment.

Advantages of hire purchase or leasing of IT equipment:

• Financial flexibility - you can spread the cost of your equipment over a period of time so its impact on your cashflow is less severe.
• Tax benefits - you can usually deduct the full cost of lease rentals from taxable income. Consult your accountant for specialist advice.
• An integrated maintenance contract and replacement equipment (in the event of total failure), often as part of the deal.
• The possibility of a periodic upgrade or replacement with new equipment as part of the package, keeping your office technology up to date.

Disadvantages of hire purchase or leasing:

• the equipment's overall cost may be greater than if you'd purchased it outright.
• there can be more administration involved.
• when leasing, your business doesn't actually own the equipment - it remains the property of the supplier.
• when using hire purchase, your business will own the equipment at the end of the contract, by which time it may be obsolete.

Read our guide Computer software: the basics.