Technology is crucial for businesses, so it’s a rare firm which isn’t looking to upgrade. However, do they always fully understand the costs of technology?
It’s imperative to stay competitive and safe in modern business, so purchasing IT equipment is a regular process for almost all organizations. And whilst we’re all aware that this can be a costly experience, the costs aren’t always limited to the price sticker. That’s why it’s a good idea to understand exactly what your overall outlay – better known as total cost ownership (TCO) – will be.
Let’s take a look at what you need to consider and understand when it comes to costing the price of your technology.
What is TCO?
The TCO applies to every cost that your technology is likely to incur over the course of its lifetime. After all, the equipment involved in IT is very rarely an inanimate object (unless it’s a mouse mat) and this means that there are a variety of costs such as:
- Maintenance
- Running costs
- Admin processes
- Costs incurred by downtime when technology fails
- Software required for hardware
It’s these costs that many businesses fail to take into account when planning their budget around new technology purchases. In fact, it’s estimated that, for example, a PC’s ticket price will only make up around 20% of its TCO. And that means the other 80% will slowly mount up over its lifetime and eat into your budget when you least expect it.
You’re probably beginning to understand the importance of careful budgeting around your new technology purchases – especially when you consider just how often businesses have to upgrade their equipment – so how can you go about making this purchase less painful?
How Can You Reduce Your TCO?
The TCO for your technology purchases can have a real impact on your budgets and expenditure, so it’s vital that you factor in all the possible costs you may encounter. Otherwise, you may find yourself desperate searching for precious dollars to keep your technology operating.
And, in order to keep your TCO at a manageable level, you need to plan ahead and ensure that the following areas are tackled efficiently:
- Ensure that good security is in place as cyber-attacks on your equipment can lead to significant downtime for your workforce
- Analyze your current spending patterns to help get a clearer picture of the potential future costs
- An in-house IT team can be costly, but by outsourcing key operations such as technical support, you may discover this is a much more affordable option
- Remember that new equipment becomes essential when older, outdated equipment is holding you up in terms of efficiency and downtime from failures
- Do not allow all employees access to all areas of your network as they are likely to cause disruption when accessing, for example, software they have no training in
- Create an inventory of all your software, hardware and associated licenses to make sure you can monitor the age of all your equipment
It may seem difficult to plan ahead for the TCO of your technology purchases, but if you put in the necessary research and try to reduce in-house disruption you can come to a much more agreeable TCO.
For more ways to secure and optimize your business technology, contact your local IT professionals.
