total cost of ownership richard greene operations director greater milwaukee committee michael...

Total Cost of Ownership

Richard GreeneOperations Director

Greater Milwaukee Committee

Michael FaticaDirector

ENTECH

About Us

Michael Faticawww.entech.org

Richard Greenewww.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 OwnershipTotal Cost of Ownership

Total Cost of OwnershipTotal Cost of Ownership

Direct, Identifiable,PlannedDirect, Identifiable,Planned

Total Cost of OwnershipTotal Cost of Ownership

Direct, Identifiable,PlannedDirect, Identifiable,Planned

OngoingOngoingUp-FrontUp-Front

Total Cost of OwnershipTotal Cost of Ownership

Direct, Identifiable,PlannedDirect, Identifiable,Planned

OngoingOngoingUp-FrontUp-Front

•Hardware

•Software

•Installation Consulting Time

Total Cost of OwnershipTotal Cost of Ownership

Direct, Identifiable,PlannedDirect, Identifiable,Planned

OngoingOngoingUp-FrontUp-Front

•Hardware

•Software

•Installation Consulting Time

•Telecom

•Software Licenses and Upgrades

•Hardware Upgrades

Total Cost of OwnershipTotal Cost of Ownership

Direct, Identifiable,PlannedDirect, Identifiable,Planned Indirect, Hidden,UnplannedIndirect, Hidden,Unplanned

OngoingOngoingUp-FrontUp-Front

•Hardware

•Software

•Installation Consulting Time

•Telecom

•Software Licenses and Upgrades

•Hardware Upgrades

Total Cost of OwnershipTotal Cost of Ownership

Direct, Identifiable,PlannedDirect, Identifiable,Planned Indirect, Hidden,UnplannedIndirect, Hidden,Unplanned

OngoingOngoing MaterialMaterialUp-FrontUp-Front HumanHuman

•Hardware

•Software

•Installation Consulting Time

•Telecom

•Software Licenses and Upgrades

•Hardware Upgrades

Total Cost of OwnershipTotal Cost of Ownership

Direct, Identifiable,PlannedDirect, Identifiable,Planned Indirect, Hidden,UnplannedIndirect, Hidden,Unplanned

OngoingOngoing MaterialMaterialUp-FrontUp-Front HumanHuman

•Hardware

•Software

•Installation Consulting Time

•Telecom

•Software Licenses and Upgrades

•Hardware Upgrades

•Training

•Informal Learning (Futz Factor)

•Process Modification

Total Cost of OwnershipTotal Cost of Ownership

Direct, Identifiable,PlannedDirect, Identifiable,Planned Indirect, Hidden,UnplannedIndirect, Hidden,Unplanned

OngoingOngoing MaterialMaterialUp-FrontUp-Front HumanHuman

•Hardware

•Software

•Installation Consulting Time

•Telecom

•Software Licenses and Upgrades

•Hardware Upgrades

•Training

•Informal Learning (Futz Factor)

•Process Modification

• Infrastructure

•Office Supplies

•Space

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 planCreate 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 efficiencyTo grow a healthier

organizationRaise awareness of real

costs

How?Consider

The People FactorThe ProcessesThe Technology

How->TechnologyCentral Administration

Pushing App InstallsCentral Virus protectionRemote AccessDisk images

Policy AdherenceAutomated updatesGroup PoliciesUser security/access levels

STANDARDS

How->ProcessesStandardization

Hardware & SoftwareDocumentation of everythingComputer Logs

Log Problems and SolutionsOne consultant

Avoid volunteer 1-time fixes to major systemsPurchasing

Same vendor, in bulk

How->PeopleTraining, training, training

For IT Staff & End Users Every dollar out of training is three-to-five dollars into

supportProvide a consistent technology environment.

“We all run Windows 98 SE” “We all use OpenOffice 1.0” “We, therefore, build and foster internal expertise”

Orientation/Training manual

SummaryTCO affects your bottom line and

therefore your clients and your mission.All costs have an inherent time frameAvoid focusing on reducing “sticker

shock”Focus on the reduction of ongoing costs

more than up-front costs

Q&A