Total Cost of Ownership

							Total Cost of Ownership

  Richard Greene
  Operations Director
  Greater Milwaukee Committee
  Michael Fatica
  Director
  ENTECH
About Us

Michael Fatica
 www.entech.org

Richard Greene
 www.richgreene.net
What is TCO? Just another
TLA?
 What are the components of TCO?
 What do I need to look out for?
 What are some of the hidden costs we
  forget?
 Be mindful: 1 out of 25 financial decision
  makers realized that costs incurred after
  initial deployment, comprised the largest
  component of the IT projects costs.
Total Cost of Ownership
                    Total Cost of Ownership



Direct, Identifiable,Planned
                    Total Cost of Ownership



Direct, Identifiable,Planned



Up-Front         Ongoing
                      Total Cost of Ownership



  Direct, Identifiable,Planned



  Up-Front         Ongoing

•Hardware
•Software
•Installation
Consulting Time
                      Total Cost of Ownership



  Direct, Identifiable,Planned



  Up-Front         Ongoing

•Hardware         •Telecom
•Software         •Software
                  Licenses and
•Installation
                  Upgrades
Consulting Time
                  •Hardware
                  Upgrades
                      Total Cost of Ownership



  Direct, Identifiable,Planned       Indirect, Hidden,Unplanned



  Up-Front         Ongoing

•Hardware         •Telecom
•Software         •Software
                  Licenses and
•Installation
                  Upgrades
Consulting Time
                  •Hardware
                  Upgrades
                      Total Cost of Ownership



  Direct, Identifiable,Planned       Indirect, Hidden,Unplanned



  Up-Front         Ongoing             Human          Material

•Hardware         •Telecom
•Software         •Software
                  Licenses and
•Installation
                  Upgrades
Consulting Time
                  •Hardware
                  Upgrades
                      Total Cost of Ownership



  Direct, Identifiable,Planned       Indirect, Hidden,Unplanned



  Up-Front         Ongoing             Human          Material

•Hardware         •Telecom           •Training
•Software         •Software          •Informal
                  Licenses and       Learning
•Installation
                  Upgrades           (Futz Factor)
Consulting Time
                  •Hardware          •Process
                  Upgrades           Modification
                      Total Cost of Ownership



  Direct, Identifiable,Planned       Indirect, Hidden,Unplanned



  Up-Front         Ongoing             Human          Material

•Hardware         •Telecom           •Training     • Infrastructure
•Software         •Software          •Informal
                                                   •Office
                  Licenses and       Learning
•Installation                                      Supplies
                  Upgrades           (Futz Factor)
Consulting Time                                    •Space
                  •Hardware          •Process
                  Upgrades           Modification
Detailed Planning – It’s a Tool
 Create A   Detailed Plan
   Walk  through your project with peers or a
    nonprofit assistance provider
   Look at who is on your board. Are there
    technical people or people with access to
    I.T. people?
   Document the plan

 Create a   Budget
The Blueberry
 $485 Personal Digital Assistant(PDA)
 Spent $38,000 in hardware, software
  and consulting time to interface it with
  his current system.
Review the Implementation
Budget
What if the Budget Proves it is
too costly?
   Take a phased approach
       Network
            Workstation upgrades in first six months
            Cabling – Look for a slow time for electricians or use
             students
            Purchase the network switches and use peer to peer for
             the first six months
   Structure the project plan so it lends itself to
    clear milestones that may be used as phases
Why TCO?
To save money
To improve efficiency
To grow a healthier
 organization
Raise awareness of real
 costs
How?
Consider
 The People Factor
 The Processes

 The Technology
How->Technology




                                  STANDARDS
 Central Administration
   Pushing App   Installs
   Central Virus protection
   Remote Access
   Disk images

 Policy   Adherence
   Automated updates
   Group Policies
   User security/access levels
How->Processes
 Standardization
   Hardware    & Software
 Documentation of      everything
 Computer Logs
   Log   Problems and Solutions
 One consultant
   Avoidvolunteer 1-time fixes to major
   systems
 Purchasing
   Same    vendor, in bulk
How->People
 Training, training, training
   For IT Staff & End Users
   Every dollar out of training is three-to-five
    dollars into support
 Provide aconsistent technology
  environment.
   “We all run Windows 98 SE”
   “We all use OpenOffice 1.0”
   “We, therefore, build and foster internal
    expertise”
 Orientation/Training manual
Summary
 TCO   affects your bottom line and
  therefore your clients and your mission.
 All costs have an inherent time frame
 Avoid focusing on reducing “sticker
  shock”
 Focus on the reduction of ongoing costs
  more than up-front costs
Q&A