As I explained in previous sections, cost components where the work of people is involved, are hardest to calculate. Time & material based items in your spreadsheet need some time component to create a number… […]
Experience will tell you a lot. If you have done these kind of processes for years, you can probably produce some good statement with your eyes closed. But more likely you wouldn't been reading this guide ;-).
But if you're not alone, and working for a company, there will be some valuable information […]
The numbers. They are the hardest part of total cost of ownership. You will need time to get them clearer and clearer. You start out with some wild guesses, and you will refine them over and over again as more information comes available. And in the end, you end up with an estimation. An informed […]
2.6 Example cost structure
This paragraph will describe an example on how to construct a cost structure by just talking about the software that needs to be selected.
Consider the following situation…
The subject is some new business application. It will be bought from a vendor (so it's not gonna be some new development). […]
2.5 Implementation (project) costs
"What cost this system in the window?" "Well, $12,000." And of we go with just 12,000 bucks to make the software work. Sounds familiar? It's funny how most of the time, people remember that they need some machines, or need some cables, but […]
2.3 Cost vs Investment
Now we are getting to a point you might want to consult your accounting department or your financial controler; a discussion about cost versus investments of software and related items. I will describe the subject as a understand it. A financial genius will […]
The whole process of total cost of ownership starts by putting up an nice spreadsheet. It's the file you should nourish, it's the digital companion you should always have with you (or in good old hardcopy) during e.g. software selection process. As you will know, a spreadsheet […]
It's so nice to talk about new ways of doing business, it's so enlightening to discuss neat futures for an application, why spoil the fun with numbers? Simple. Because you have to pay. Most businesses today still have to make a profit, so 'cost' is an issue.
Why then this 'total cost of ownership'? Again, simple. […]
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