Total Cost of Ownership Overview Total cost of ownership (TCO) is a measure of all the costs associated with owning, maintaining and using a device or technology over time â€“ including both apparent and hidden costs. Well-managed TCO directly drives IT productivity and impacts knowledge worker productivity. The costs associated with owning and operating a device over time are often referred to as hard and soft, or direct and indirect. This is partly because some elements of TCO are easy to measure, while others are much less practical. Because HP believes that most of these elements are actually hard costs, meaning measurable, they are then best categorized as apparent and hidden. Hewlett-Packard Company 3000 Hanover Street Palo Alto, CA 94304 www.hp.com Editorial Contact: Katy Doherty, HP +1 970 278 0570 email@example.com Christiaan Brown Porter Novelli for HP +1 206 770 7011 christiaan.brown @porternovelli.com
Hardware and toner/ink are the two apparent cost elements that are most often considered, but, depending on the environment, supplies are not always the most significant cost. Costs will vary, since no two environments are entirely alike. The hidden costs for a single printer could be different than for a large networked fleet. Taken to its logical conclusion, in larger environments where hardcopy output is a complete sub-business that supports a companyâ€™s ability to bring their product to market, the entire fleet including infrastructure and its management could be defined as a single cost that merits some more creative attention. Identifying Costs
â€˘In an industry analyst study by Gartner Group, TCO stood out as one of the key aspects that managers consider in arriving at their purchase decisions, ahead of traditional criteria such as hardware price, brand name, product features, etc. Costs included in a TCO measurement falls within seven major categories, outlined in the chart below. While Gartner Group identified these categories as the key components of TCO; they are subject to change overtime as additional elements are identified.
HP has helped enterprise customers identify these TCO elements and have worked with them in improving productivity and reducing imagng and printing costs within their organizations. Managing the environment most efficiently requires that the cost elements of TCO be jointly addressed. An example might be that influencing the hardware element can result in lower help desk costs. However, employing a good network fleet management tool in concert with influencing the hardware element could result in even lower help desk costs â€“ freeing IT staff to address primarymission projects. TCO is an important element in the purchase decision criteria and an area where HP can add value by: â€˘ Helping the customer understand the various elements that contribute to TCO â€˘ Helping the customer understand the importance of recognizing that productivity gains will result when the business environment is actively managed. For more information: www.hp.com/go/
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