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What Is The True TCO For Information Technology Projects


By Frank Cellucci

Never implement a project without knowing the total cost of ownership, or TCO, for the life of the project.  Ongoing software and hardware upgrades, manufacture support and warranties and the level of technical expertise needed to support the project all need to be factored in over the full lifespan of the project. describe the image

The true "total cost of ownership" is more accurately referred to as Life Cycle Costing.  This allows you to see the overall picture of the cost of a project throughout its' full life cycle.  Properly done, this gives you an accurate projection of a projects business costs and business benefits.  Life Cycle Costing considers the full Total Cost of Ownership.  It should reflect the development, testing, implementation and support costs over the entire life span of the system that is being put into place. 

It is more effective to spend money early on defining user requirements and early testing on IT projects than to address what may be avoidable problems that appear after implementation.  In a report by the National Institute of Standards and Technology (NIST) they estimate that repairing or fixing defects in the post implementation stage can cost 30 times more than in the requirements and analysis stage and  up to 3 times more than in the integration and testing stage.

A certified Managed Service Provider acting as a true partner can help you arrive at an accurate life cycle cost for many of your IT projects.  They can make your post implementation support a fixed monthly operational cost along with providing any required service or support in earlier project stages.  

Their processes and services allow you to have a more precise understanding of your organization's IT spending.  Knowing what you are actually paying for in IT costs and how much you are essentually going to be paying are deceivingly hard questions.  A Managed Services Provider should be able to help you.  If your MSP can't help you find those answers find someone who can.


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