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How Much Does Your Technology Cost?

In these economic times we are all looking for a way to reduce our expenditures. The problem, of course, is how to reduce cost without compromising quality and still have the technology environment you need.

To get to the answer, you need to identify and determine:
1) your technology needs
2) the service and equipment that will fill those needs
3) the cost

To address the first two points, you need to know what you want to do with your technology. Think a little bit down the road so that what you get today will support what you may want to do next month or next year. It is important to research a very broad spectrum of services and products to see what is available, what requirements are met, know how these products and services interact with each other and fit them into your plan. Once you have this information, you can begin to determine the cost.

Determination of the cost is not as easy as it sounds. There is the up front cost of the items, of course. If you listen to TV or rely on ads you read in the print media, you would think that the primary cost of an item is the purchase price. Advertisers want you to think that low up front cost is important. Advertising leads us to think that technology items will need to be replaced frequently, so why not just get something low costing now, since you'll be changing it out in a year or two anyway. This thinking leads to high total cost of ownership.

Total cost of ownership (TCO) is the actual true cost of the item. Some of the important factors that determine TCO are: up-front purchase cost, repair expenditures and downtime, specific product features, expandability, durability and value of ownership. This is not a complete list, but it hits the highlights.

So how do you determine TCO? Utilize available data that estimates, for a specific product over its lifetime, the expected repair costs, the expected downtime, and the expected life span. Detailed data is available from reliable companies which have evaluated scores of products to calculate these costs. Be sure to use data gathered by companies which specialize in technology and have studied these specific issues so that the research is valid. With data in hand, you will know the TCO for the products and services you are considering.

Once you have determined the total cost of ownership you can choose your products and services based on your priorities. Is low up front cost most important? Or is lower TCO, with the ability to expand in the future while having a dependable product with a long life span important? It's not easy to determine the true cost of an item, but once you do, you will know how you want to proceed, while reducing your overall costs. And you will have the technology environment you want. That's a comforting thought these days.
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