Tco Introduction

Topics: Total cost of ownership, Decision making, Cost Pages: 3 (1085 words) Published: April 12, 2013
TCO or Total cost of ownership is the total amount of target costs, which the owner has to bear with the launch of the entry into the state ownership to the release of state ownership and execution of the full owner of the obligations of ownership. There is no universal method that will allow determining total cost of ownership, since it is dependable on the characteristics of the object of ownership tenure, cost structure and functions, which can vary greatly. To determine TCO a number of specialized techniques have been developed, focusing on a overeat possession. One of the objectives of TCO is determining the total amount of the cost of machinery, equipment, information systems, etc., which are calculated at all stages of the life cycle. A key principle being implemented in developing methods for determining the total cost of ownership is a systematic approach. Despite the fact that most of the costs can be determined in advance or predicted with high accuracy, some costs are probabilistic in nature, which results in significant variations in the risk of the actual cost of the predicted. TCO

With the development of the business world the importance of the IT is increasing progressively. Along with this development, businesses would in general prefer to make business decisions basing, besides non-financial figures, on a verified true cost of doing business. For this reason businesses more and more start applying the TCO concept, especially in the IT infrastructure. The idea of TCO in IT is relatively new; it has started in 1987 by a man called Bill Kirwin, a member of the research and consulting agency called Gartner Group, who has developed a methodology for TCO of IT assets. In a word, this TCO consists from two parts – direct and indirect costs – and since the indirect part is incredibly variable and always changing, this new concept has introduced a number of new elements to be analyzed and thus gave a new vision on a cost formation in the...
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