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Definition
It is a common misconception to consider that the only costs associated with
a computer system are its original purchase price and the costs of necessary
applications and peripherals. Instead this is
far from the case, particularly in the business environment.
The problem of putting a precise definition on the Total Cost of Ownership (TCO) is
a far from exact science - which is equally bizarre when you consider that it is one
of the most important issues facing IT departments today. Here's why. Simply put,
the TCO is a combination of the expenses involved with the following:
- original equipment and software purchase
- system deployment
- user training
- salaries of support staff
- system maintenance
- troubleshooting
- support
- productivity loss during the previous processes and / or unforeseen downtime.
- cost of administrative tools
TCO Costs
Estimates of the TCO of a system are difficult to quantify. Assuming a three year
lifetime, industry analysts place the original equipment purchase at between 11%
and 6% of the TCO. The variance in these figures is primarily due to disagreement
about the average financial implication of lost productivity. What is clearly agreed
upon is that buying the equipment represents only a tiny portion of the expense
required to run it.
Translating these figures, if you spend £2,000 on a system it could cost you as
much as £33,000 to run it over its useful lifetime. In a large organisation with
hundreds of systems this cost could soon become onerous.
Reducing the TCO
What can we do to reduce the TCO of a computer system? Gut reaction says that
cutting the initial cost of ownership by buying cheaper systems will help cut the
TCO. In fact the reverse is true. By spending less you get less. In the best case you
end up with an infrastructure that is ill-equipped to handle your applications or
meet your business requirements over the lifetime of the equipment. At worst the
quality of the equipment can suffer and subsequent support costs soar.
If the equipment then needs to be replaced sooner than its planned lifetime the
object of spending less money initially has been defeated. By spending more
on the initial purchase of the equipment, the following benefits can be realised:
- Longer useful operating life for installed clients
- Greater employee productivity
- Ability to adopt powerful e-Business software and solutions
- Reduced expenses from upgrades and early retirement
- Enhanced business agility within the enterprise
There's only so much that can go wrong with a standalone PC. Attach that PC to
a network, the Internet and several peripherals and the potential for problems rises.
In a networked environment one of the best ways to reduce the TCO is to
implement management across the network. The right tools make managing a
network easier, more time-efficient and ultimately more cost effective.
A complete management solution requires a Wired for Management
(WfM)-compliant system, a WfM-capable network adapter, such as the
Intel® PRO/100+ Management Adapter, and software like Intel® LANDesk®
Management Suite or other management applications from vendors such as
Computer Associates, Hewlett-Packard, IBM, ON Technology, PLATINUM and Tivoli.
Software like the Intel LANDesk Management Suite and Client Manager, coupled
with integrated Wired for Management technologies, enable IT staff to perform
system inventory, routine maintenance, and software upgrades over the network.
There are many other ways IT departments can reduce the TCO. For instance, with some companies, buying and deploying identical systems may help reduce
TCO, but at other companies, it might make sense to allow a little more choice in
systems to meet users' specific needs. The end result may be greater productivity
and lower TCO. In addition, by establishing security measures up front and making
sure every system you deploy adheres to them, the risk of crippling viruses and
security holes is greatly reduced thereby saving your company time and money.
Whatever methods you come up with to reduce TCO, investing in better hardware
and implementing a network management platform will go a long way toward
maximising the return on your hardware investment.
To find out how you can benefit from the ESP experience call 0118 916 9300
now or send an e-mail to sales@esp.co.uk
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