Hi there
My experience of I.T in large organisations in over 30 years is that Management NEVER understands the savings made by quick response time and decent hardware. They only look at the cost of the hardware and NOT the people operating it.
It would probably take me at LEAST 3 times longer to do even a fairly simple piece of work using an old PC and XP compared to a fast modern PC running Windows 7 (or even 8.1).
Baring in mind that say my billing is typically around 100 EUR an hr (seems the "norm" for European contracts these days) and the cost of new equipment is say 700 EUR -- you can see it doesn't take long for the outlay to be recouped easily in productivity.
What happens is though the new PC etc is CAPITAL Cost in "Real Money" which goes on some lower level managers budget whereas my Fees are routed usually through purchasing / HR / Finance depts. which are another part of the organisation
The lower level manager THINKS he's appearing good because he's (or she's) kept or reduced HIS/HER BUDGET. - Like Blinkered Horses they can't see beyond their small part of the organisation.
It's not only Govt. depts --even quite large successful firms are guilty of this at times
Even if the employee cost is a bit lower than 100 EUR / hr then it still won't take much longer to recoup the money.
This is the CLASSIC article about fast response time written back in 1982 by IBM - mainframes were king back then but the article is no less valid today. !!!
IBM: The Economic Value of Rapid Response Time
Perhaps also too many modern managers - when they are trained at all use THIS too much to evaluate their strategy.
Mathematicians call the process as following a "Greedy Algorithm" - have fun on reading the article. !!
http://whatis.techtarget.com/definition/greedy-algorithm?track=NL-1823&ad=892911&asrc=EM_NLN_28024870&uid=8764353&utm_medium=EM&utm_source=NLN&utm_campaign=20140408_Word+of+the+Day%3A+greedy+algorithm_mrouse
Cheers
jimbo