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Total Cost of Ownership
Total cost of ownership (TCO) is a financial estimate whose purpose is to help managers determine direct and indirect costs of a product or system. TCO, when incorporated in any financial benefit analysis, provides a cost basis for determining the economic value of an investment. A TCO analysis includes total cost of acquisition and operating costs. A TCO analysis is used to gauge the viability of any capital investment. An enterprise may use it as a product/process comparison tool.

Some items to consider are:

  • Purchasing research
  • Migration expenses
  • Operation expenses
  • Infrastructure (floor space)
  • Electricity (for equipment power)
  • Downtime, outage and failure expenses
  • Diminished performance (i.e. users having to wait, diminished money-making ability)
  • Security (including breaches, loss of reputation, recovery and prevention)
  • Training
  • Information technology personnel
  • Corporate management time
  • Long term expenses
  • Replacement
  • Future upgrade or scalability expenses
  • Decommissioning
In the case of comparing TCO of existing versus proposed solutions, consideration should put towards costs required to maintain the existing solution that may not necessarily be required for a proposed solution. Examples include cost of manual processing that are only required to support lack of existing automation, and extended support personnel.

Let Capitol Document Solutions provide your organization with information on the Total Cost of Ownership of our products compared to your current document production environment.

Contact us for more information.

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