Total Cost of Ownership

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Total Cost of Ownership

• Richard Greene
• Operations Director
• Greater Milwaukee Committee
• Michael Fatica
• Director
• ENTECH

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About Us

• Michael Fatica
• www.entech.org
• Richard Greene
• www.richgreene.net

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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.

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Total Cost of Ownership
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Total Cost of Ownership
Direct, Identifiable,Planned
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Total Cost of Ownership
Direct, Identifiable,Planned
Ongoing
Up-Front
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Total Cost of Ownership
Direct, Identifiable,Planned
Ongoing
Up-Front
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Total Cost of Ownership
Direct, Identifiable,Planned
Ongoing
Up-Front

• Telecom
• Software Licenses and Upgrades
• Hardware Upgrades

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Total Cost of Ownership
Direct, Identifiable,Planned
Indirect, Hidden,Unplanned
Ongoing
Up-Front

• Telecom
• Software Licenses and Upgrades
• Hardware Upgrades

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Total Cost of Ownership
Direct, Identifiable,Planned
Indirect, Hidden,Unplanned
Ongoing
Material
Up-Front
Human

• Telecom
• Software Licenses and Upgrades
• Hardware Upgrades

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Total Cost of Ownership
Direct, Identifiable,Planned
Indirect, Hidden,Unplanned
Ongoing
Material
Up-Front
Human

• Telecom
• Software Licenses and Upgrades
• Hardware Upgrades

• Training
• Informal Learning (Futz Factor)
• Process Modification

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Total Cost of Ownership
Direct, Identifiable,Planned
Indirect, Hidden,Unplanned
Ongoing
Material
Up-Front
Human

• Telecom
• Software Licenses and Upgrades
• Hardware Upgrades

• Training
• Informal Learning (Futz Factor)
• Process Modification

• Infrastructure
• Office Supplies
• Space

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Detailed Planning Its 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

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The Blueberry

• 485 Personal Digital Assistant(PDA)
• Spent 38,000 in hardware, software and
  consulting time to interface it with his current
  system.

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Review the Implementation Budget
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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

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Why TCO?

• To save money
• To improve efficiency
• To grow a healthier organization
• Raise awareness of real costs

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How?

• Consider
• The People Factor
• The Processes
• The Technology

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How-gtTechnology

• Central Administration
• Pushing App Installs
• Central Virus protection
• Remote Access
• Disk images
• Policy Adherence
• Automated updates
• Group Policies
• User security/access levels

STANDARDS
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How-gtProcesses

• Standardization
• Hardware Software
• Documentation of everything
• Computer Logs
• Log Problems and Solutions
• One consultant
• Avoid volunteer 1-time fixes to major systems
• Purchasing
• Same vendor, in bulk

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How-gtPeople

• Training, training, training
• For IT Staff End Users
• Every dollar out of training is three-to-five
  dollars into support
• Provide 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

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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

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QA