by Cloud for Good Blog | Mar 17, 2015 | Blog
This is a cross post from the Cloud for Good blog. As part of our ongoing series on strategic planning for technology, this post focuses on the different costs that should be assessed as part of any project planning exercise. Understanding the true cost of an initiative can help you determine when (or whether) you should take on a new system initiative, usually in combination with some sense of the potential benefits to be realized from the implementation. We’ll discuss different ways to evaluate the Return from a project in a future post. Cost constraints are often one of the first things that people think of when talking about technology, in large part because technology investments generally involve purchasing or building something tangible, such as servers, laptops, or software to install. While the outright cost to purchase technology is usually pretty apparent, it’s not the whole story, as it doesn’t take into account the the hidden costs of maintenance and support and the less-tangible costs of training, user adoption and efficiency. Adding these costs in is the concept of Total Cost of Ownership or TCO. This concept applies as well to the implementation of new systems as it does the acquisition of hardware. When evaluating the Total Cost of Ownership, there are three main elements to take into account: Acquisition cost, Implementation cost and Support/Maintenance cost. Acquisition cost: Typically, this category will include the outright purchase of hardware and software and is usually accounted for as a capital expense in the organization’s budget and can be depreciated over time. Acquisition through in-kind donations or grants should also be accounted...
