Computer hardware: the basics

Computer hardware is the most easily identifiable part of your IT infrastructure and is one of your most important business assets.

While software is needed to make any hardware useful, without the correct hardware your software may not run efficiently or even at all. Therefore, as with any business investment, you should choose your computer hardware with care.

This guide takes you through every aspect of hardware acquisition, from assessing your needs to getting the best deal and finding specialist help. It covers a range of hardware, including stand-alone PCs, servers, network equipment, scanners and printers. It also provides information about the security measures you should take to protect your investment from risks such as theft.

Business benefits of new computer hardware

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 electronic 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 them 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. For more information, see the page in this guide on buying new computer hardware for your business.

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Buying new computer hardware for your business

Purchasing new computer hardware can bring several benefits to your business – see the page in this guide on the business benefits of new computer hardware. 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. Look carefully at the overall costs, and think about 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 – for more information, see our guide on computer software: the basics.

Replacement and disposal of old hardware

All hardware contains moving parts that will eventually fail. The life expectancy for some parts is three to four years. Even if failures of this type do not occur, the hardware may become too old and its performance inadequate for your needs. 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

Theft of computer hardware from businesses is a risk. Laptops and other portable devices are easier to steal, but internal devices such as processors and chips can also be at risk for the business data they contain. It is therefore 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.

For more information, see our guides on IT security and IT risk management.

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Desktop computer hardware components

Desktop hardware, such as a desktop computer itself, is the most common type of IT hardware purchased by a small business. The cost of hardware depends on its specification, which in turn is determined by some key components. When you buy desktop hardware, you will need to decide what the specification of these key components should be.

The processor is the driver of the computer. Processors are usually differentiated by speed, measured in gigahertz (GHz). The higher the GHz, the faster the computer will run. You should buy the fastest processor you can afford, but a 3GHz processor will normally be enough for most business functions, eg word processing and spreadsheets, together with some multimedia.

Memory is used by the processor to run programs. Generally, the more random access memory (RAM) you have, the better your computer will run when using several programs at once. Your computer should have enough memory to make the most of the processor speed. For a 3GHz processor, for example, you should have around 2-3 gigabytes (GB) of RAM.

The hard disk is used to store the data you create in your business, as well as the programs you use. Its capacity is much greater than the RAM. An office computer with a 3GHz processor should have at least 200GB of hard disk space, but if you intend to use a single desktop PC as the main storage location for all your business data, you will need at least 500GB.

External plug-ins, such as rewritable DVD, DVD-Read Only Memory (ROM), or CD-RW (rewritable) drives can be used to supplement your computer’s memory.

The monitor is the computer’s display screen. Liquid Crystal Display (LCD) or flat screen monitors offer reduced bulk and lower power consumption, relative to cathode ray tube (CRT) monitors. Monitors are normally measured diagonally in inches – typically 19, 22 or 24 inches. Larger or wide-screen monitors allow you to compare two documents on-screen. Many monitors have an aspect ratio – the proportion of image width to height – of 16:10, although screens with a 16:9 ratio are becoming more widely available and offer higher resolution.

Find out about desktop computer specifications on the About.com website – Opens in a new window.

The keyboard and mouse usually come as part of a bundle, but you may be able to select wireless devices that make desktops neater.

There are alternative computers to conventional PCs available, such as Apple Macs. These have historically been used to support desktop publishing software but now also offer a comparable system for general office use.

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Choosing desktop computer hardware

There are two types of computer that you might need for your business – desktop PCs and laptops.

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 – an important factor in a busy office.

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. See our guides on mobile technology and employees working 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.

More than a third of laptop thefts occur in the workplace. You can help prevent this by using docking stations that are permanently fixed to your desktops and have a feature that locks laptops securely in place. If you are leaving laptops overnight, or for the weekend, lock them in a secure room or cupboard and use any additional locks, such as office or internal doors.

Some workers may benefit from having a personal digital assistant (PDA), smart phone, 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 and are 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’. For more information see our guide on cloud computing.

If your business is setting up a basic IT system, you can use our interactive tool to find out which computer equipment you should buy for your business.

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Servers

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. Consider 180 gigabytes (GB) as the bare minimum, although you will need a lot more if you deal with large files, eg graphic, image, video and audio files.

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.

A lot of data flows in and out of your server. All this data needs to pass through a special connector card to your local area network. This card, called a network interface card, needs to be fast enough to handle the flow of data – therefore it is common to use a card of 1GB or greater.

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. See our guides on computer networking and IT security.

A server maintenance contract is a wise investment, especially if you have limited in-house IT expertise. You can find information about maintenance contracts on leading hardware supplier websites. A web search for ‘server maintenance’ will find other possible sources.

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Networking your computers

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. For more information, see our guides on computer networking and wireless technology.

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Printers, scanners and multi-function devices

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 PCs, 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. As with most computer equipment, unless you have in-house expertise, it is worth paying for a maintenance contract for your printer. Any failure of the equipment can then be dealt with quickly, reducing the disruption to your office. See the page in this guide on computer hardware installation and support.

Scanners are used to capture images digitally. They can be useful in an office 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.

A small office usually needs a printer, a photocopier, a fax machine and perhaps a scanner. These can be combined in one multi-function device. 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.

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Computer hardware installation and support

A single computer can usually be set up and operated by someone who is not an IT expert.

However, unless you have in-house expertise, you may need outside help, eg from your supplier, to install more complicated systems such as a full network. You may also need external help with training and support services. 

See our guide on computer networking.

When you buy hardware, the manufacture or supplier may offer you access to a helpdesk, either by phone or via the internet, at no cost or by subscription. Be sure to find out what the exact charges are, how long the help lasts for and, if possible, whether the helpdesk has a good reputation.

You may also want a maintenance contract, either from your supplier or an independent maintenance company. On-site cover, which involves someone coming to your premises to make repairs, can get your system running again quickly but may be expensive. Return-to-base repairs, which involve sending your equipment away to be repaired, may be cheaper, but can also be inconvenient.

You should also establish the quality of the service. For example, check whether the engineers work to ISO 9000 standard and what quality of parts they use. Find out about the ISO 9000 standard on the British Standards Institution (BSI) website – Opens in a new window.

For a critical system that your business relies on completely, you may want a maintenance contract which guarantees repair or replacement at short notice when a fault occurs.

The internet is an invaluable source of information about computer hardware. Many suppliers now offer support pages on their corporate website where documentation, help and upgrades to software can be obtained.

It’s worth remembering that to get the most from new technology, employees often need training and support for a new computer system. To find out more about how to assess your staff’s training needs, see our guide on basic IT skills.

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Purchasing or leasing computer hardware

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.

Buying computer hardware outright

Advantages of buying equipment outright include:

• 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. See our guides on capital allowances: the basics and first-year allowances: the basics.
• Not being tied into medium or long-term agreements which may be difficult to end if your needs or circumstances change.

Disadvantages of buying outright include having to:

• 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

See our guide on how to choose and manage your IT supplier.

Leasing computer hardware

Advantages of hire purchase or leasing of IT equipment include:

• 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 – as with purchasing, leasing can also offer tax benefits. Businesses can usually deduct the full cost of lease rentals from taxable income. Consult your accountant for specialist advice in this area. See our guide on how to choose and work with an accountant.
• 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 include the following:

• 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

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CASE STUDY

Here’s how investing in computer hardware benefited my business

When Luckman Ismail joined tile retailer and wholesaler Tile Mart Limited as business development manager in April 2003, he believed that a measured investment in IT could bring efficiency and customer service improvements to the company. Here Luckman explains how he went about it.

What we did

Analyse the business’ needs

“I believed there were ways we could improve our customer relations, supplier management and stock control by introducing electronic systems. All our information was paper-based or in our directors’ heads. We did a lot of investigation work, making sure we understood how Tile Mart works, what our suppliers wanted and what our customers needed, and used that to set out our overall objectives.”

Make use of the advice and support available

“We got our local Business Link involved quite early on. While it was easy for us to generate the ideas – such as unifying our stock control and ordering processes – turning them into a real system can be difficult. Our adviser worked very hard for us, suggesting practical approaches to introduce our IT hardware and systems. And he introduced us to Preston Business Venture and the Asian Business Federation, which helped us with grants for equipment.”

Introduce IT systems progressively

“Previously we had one PC sitting in a corner, hardly used. Now we’ve got four networked PCs, a printer that we use for statements, invoices and promotional material and a laptop that our sales team can use on the road. While our overall objective was large – to use and share all our company data effectively – we broke it down into small parts. Our accounting systems were first and we bought an off-the-shelf software system, which helped us manage credit control more effectively and allowed us to raise invoices in a matter of minutes.

“Then we converted the purchase ledger system. The reports from the software package helped us to accurately analyse our ordering and boost our cashflow through smarter stockholding. We’ve got internal and external email now too, which makes communication between our three sites faster and more reliable.

“Our next project is to introduce a stock control and point-of-sale system to make it easier to share stock across the branches and improve availability for customers.”

What I’d do differently

Pilot systems first to make sure they work

“We devised a stock-code system that we thought would save time when inputting product details to the software. However, after six months, we realised that it just wasn’t going to work as it stood, so we scrapped it.”

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