Total Cost of Ownership

[Face-Man]

My Boss has asked me to do a presentation to SMT about TCO. I have a Basic idea but would like any advice anybody has. I wouldn't mind working out how much it costs to allow USB keys becuse they think it is just £15

[Dos_Box]

TCO is a business buzzword and was used almost soley as a method of selling new hardware to companies by producing lots of lovely figures to justify the expense of the new equipment. You can create and jucggle the figures as you wish and make them say what you want them too. In short, TCO is a marketing tool and if your SMT have latched onto it then more fool them.

[Ric_]

TCO measure the amount of money it costs to own/run/manage an item over its lifespan - say 3 years. For example, a printer may cost £400 and you replace the toner every 3 months at a cost of £70. However, another printer may cost £200 but the toners run out after 2 months and cost £80 each. Printer 2 has a higher TCO. This is before taking into account your time to change toners and clean the printer.

 

As for USB keys, you will need to try to decide how many hours it will take to configure your environment to take them (securely) - 10 sounds like a nice round number - and then factor in on going time for when the malicious little brats invade your network with crap - 3 hours a week. If you get paid £1 an hour and can buy a USB drive for £2 then £15 sounds fair!

[Ric_]

@Dos_Box: TCO is very important in education too! A low TCO means that running costs and administrative overhead are low. Low running costs mean more money to spend on shiny new things and low administrative overheads mean less firefighting!

[russdev]

i have got somewhere tot excel tool i will dig it out

 

russ

[Dos_Box]

You can still manipulate the figures as you want though!

[russdev]

of course but it provides evidence if fileld in correct and truthly provides head with figures to say here is what is required to keep running for next 3 years

 

russ

[MkII]

Do they want to spend more money or less? If you think they'd be amenable you could put together a replacement plan for all your expenditures.

[Pear]

Surely the time you wasted spent on working out TCO's could be better used. Obviously you want to compare the price of products and reusable items like toners, but taking into consideration man hours is pointless as its a totally random and unpredictable number. You can roughly say how many toners a year you will need but to come up with an accurate number on how often you will spend fixing the printer is bizarre ! Especially when you haven't even bought it yet.

[Netman]

TCO is an extremely important tool in Network Management. In order to accurately decide on any purchase you need to do some sort of cost-benefit analysis, even if this is only in your head... and to be able to correctly do that, you need to know the total cost of an item, not just the up-front or purchase cost, which never reveals the true picture. The major problem in the past with many schools is that they'll just buy equipment and never see the ongoing and associated costs of it - hence we have under-paid, sometimes under-qualified ICT staff in so many schools. If the projects to deploy ICT in schools had been done properly in the first place, there really wouldn't so many problems now. I bet _Rics TCO has decreased dramatically with a thin client architecture... and no doubt that argument was part of how he sold the idea to senior management. More info in the attached pdf... but definately a subject every NM should be aware of, and know how to use.... IMHO

tco.pdf

[Pear]

Well, I suppose that is a point, I could make good use of it to SMT. Ric is right to have the thin client network as it makes so much sense. But I'd still stand by what I said if someone was coming to me with a TCO analysis.

[russdev]

at moment cant accees gmail where file is as soon as embc soprt issue with gmail out will post it

 

russ

[Face-Man]

Thanks for all this it is really useful. The whole issue came up when the cheapest I was quoted was £30 to get rid of our old GX110 systems. With the EU regulations about environmental disposal of electronic equipment throwing them away was not an option. I got around this by "giving" them to staff but SMT got concerned about the cost of my time to do that ! After pointing out that a computer is not just for christmas and that maintaining old kit cost money they have asked for a TOC in order to plan ICT spending more effectivly. I think the lights have finally come on re ICT spending so I want to do it right so that our current Technican ratio of 1 to 160 can be reduced and the world can be a better place.... To quote " I love it when a plan comes together". :twisted:

[ConTheITGuy]

TCO is a business buzzword and was used almost soley as a method of selling new hardware to companies by producing lots of lovely figures to justify the expense of the new equipment. You can create and jucggle the figures as you wish and make them say what you want them too. In short, TCO is a marketing tool and if your SMT have latched onto it then more fool them.

 

If I was cynical I would suggest using the figures to get them to agree to buying the kit you want!

 

Andy.

[Face-Man]

I will be obviously asking for what is required but based on the premise you only ever get 50% of what you ask for. But it is more fundamental than that they (SMT) really have no idea that when you buy a PC it is not just the £300-800 price that has to be considered. It's the cabling infrastructure, switch capacity, server capacity, maintenace cost, support time and finally disposal cost. so the budget needs to be maintaned high year on year to keep things running not 100k one year 20k next. After all we all know the member of staff that requires a full time technician all to themselves :x

 

Just found the spreedsheet mentioned earlier (cheers russdev)

 

http://www.lgfl.net/lgfl/accounts/conference/2005/pack/TCO%20lite%200705%20-%20final%20-%20revision%20oct%2005.xls

 

let me know if you want it posted here

[GrumbleDook]

When ditching old machines tell the supplier who is replacing them that they also have to take away the old machines ... at no extra cost and that you will check up by getting a mate to do a blind quote.

 

Most of our suppliers have agreed now.

 

Also ... don't throw out anything younger than 5 years old ... they would be perfect for thin clients.

[MkII]

5 years!!! I have 12 year old machines as thin clients. If it does a thousand colours it's used. Nothing leaves here in working order.

 

Nice ruse there tony

[Ric_]

@Pear: When I mentioned the time taken for maintenance and troubleshooting I meant more of a comparison between existing products that you use - since most people like to try to keep all their kit the same - and manufacturers also quote recommended maintenance intervals.

 

When WEEE comes into force, suppliers will HAVE to dispose of your old equipment when buying replacement kit IIRC - they can only charge you for disposal or additional units. You can usually get around that by palming them off on a charity (I sent 30-odd to Africa on the proviso that they collected them and this also made the school look like it was making an effort to help the third world!).

 

I also have a contact that will take away old machines FOC - he sells on what he can and gets scrap value for the cases. The only thing I pay to get rid of is monitors.

[steve]

I've been working with our LEA on a modified version of the TCO spreadsheet. It now has planning for 5 years, allowing more advanced planning.

 

Its been a good exercise for us to see how much money the SMT need to budget for to maintain the school at our present level.

 

Combining it with a time line of software / hardware upgrades has given us a great picture of whats happening when and how much its going to cost.

 

As a NAACE marked school we need to plan for 3 years at a time and these tools really help everyone see whats happening long term.

tco_guidance_notes.pdf

5yr_tco_blank.zip

[Netman]

Thanks Steve - that looks like good stuff at first glance... do you mind if I basterdise it and use it for my own porpoises (!)?

[steve]

Feel free to do what you like with it

[Face-Man]

Thanks Steve.. That looks really useful.. There is a loop hole in WEEE in that suppliers can charge to collect old equipment and you can bet that will be expensive

[broc]

Don't forget that the older a piece of equipment is, the more likely the cost of maintaining it will increase. There comes a point when it is cheaper to replace & scrap old equipment and this should be a part of the TCO case. Compare the cost of maintaining a classroom full of 5 year old 'mongrel' PCs, which end up with different system boards, sound cards, graphics adapters, LAN adapters etc. They are often a serious drain on technician resource when compared with a room full of new or nearly new industry standard DELL (or similar) desktop PCs which can be cloned and have onsite warranty support. In this scenario, you can influence the PC per technician ratio by choosing if & when to replace equipment.

 

Sometimes it is better not to be too clever at keeping old equipment going.

 

Brian.

[Face-Man]

Just had this link sent to me.

 

http://www.becta.org.uk/corporate/extra_out.cfm?id=5015

 

It has all the becta documents from BETT the

 

The development of a National Digital Infrastructure

 

documents are useful for Heads to realise what cost are involved. I especally like the 1% spending on Training in secondary (if only it was true)

[K.C.Leblanc]

If your school has a problem with people bringing in their old inkjets from home, now is your chance to banish them forever.