TCO allows the company to determine when maintenance costs on older technology are less cost effective than replacing the hardware. TCO helps to determine operational life expectancy of technology. TCO is an important concept. Considering only the initial investment in IT expenditures does not give a true indication of what those expenditures will cost the company in the long term. There are many factors that need to be considered as part of the total ownership costs for that technology. These factors include things like training, technical support, retirement costs, supplies and maintenance, as well as the effect on employee productivity. Although obtaining the information necessary to implement TCO may be a significant expense in itself, the benefits of the system on a large scale should more than make up for that. Upgrading technology seems expensive, but it can actually save the company money and increase productivity if done at the right time. Hidden costs can include technical support, decreased productivity, and decreased quality of information resources. I think that TCO is a very good way to increase efficiency by reducing overall spending on IT implementation. TCO gives a better picture of overall IT costs than purchase price alone, but is only as good as the metrics that are used to evaluate the TCO. It is important to factor in the less obvious costs associated with a technology. More obvious costs include things like deployment costs, support and service, and energy usage, but some costs are often overlooked such as differences in user training, and how the technology will integrate with other future technology changes. TCO also does not provide data on ROI (Return on Investment), so although TCO can be useful in selecting between technology options and provide data on optimal upgrade timing, it is not the only metric to be used in financial evaluation of technology upgrades. I would make sure there is effective use of IT investment and...
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