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Total Cost of Ownership |
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Total Cost of Ownership TCO is an acronym that has been increasingly tossed around in the computer world for the past few years. It is simply a measure of how much owning a PC actually costs a company when all direct and indirect costs have been totaled. The direct costs of a PC are easy to figure out. They simply involve adding the system's purchase price and support costs together. Indirect costs are a whole different story. Indirect costs are hard to measure because nobody ever cuts a check to pay for them. How much are you paying a computer operator while he reboots a crashed system three times a day? What is the cost of lost work while you wait a half hour for a CD to finish burning? How much does a network crash really cost you in wages to your employees while you wait for the technician to arrive? When all these hidden costs are totaled the cost of owning a PC can be astronomical. Most people will not believe that the Total Cost of Ownership for the average networked PC is as high as $13,187 (The Gartner Group, 1996) per year! It is hard to believe, but the actual purchase price of a PC is almost negligible when all costs are figured in. This number can vary by thousands of dollars from business to business but one thing remains constant. The need to reduce TCO is virtually universal. How to compute TCO If you are running a small business, you may be wondering how to compute your own business' TCO. The answer to that is simple. Don't even try. Calculating TCO is extremely time consuming, and if done by an outside firm very expensive. A small business needs not to figure out what the cost is, but simply to be aware of the fact that it exists. No two companies have exactly the same needs, therefore no two companies should have the same costs. Even if you did take the time to figure out exactly what your company spends on it's computers and compare it to others, the numbers don't necessarily mean anything. Some companies have higher TCOs and some lower. The main thing is not how much your company spends, but that it makes intelligent decisions in an effort to reduce the costs. How to reduce TCO At this point you may be curious about how to reduce an expenditure that you can't even see. It may seem that things like down time are costs you simply can't control. These costs, however, are more controllable than it seems. For a large business there are immense numbers of solutions to reduce TCO, varying from thin client networks to extremely expensive management software. For a small business, however, there are only a few things you can do. The two easiest to focus on are system speed and system stability. |
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Copyright MGI Data ©2001
Last Updated 05/15/03 |
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