Total cost of ownership district guidelines (revised)

Total Cost of Ownership

Calculation of TCO should take the following into account:

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  Direct labor – established support infrastructure as well as user support and computing infrastructure
  
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  Indirect Labor – time costs incurred by user training, productivity losses experienced when problems occur, or time lost when a device fails or network connectivity is lost.
  
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  Amortized equipment costs – computers, servers, network equipment, printers and other hardware, software and external service providers.
  

For of the primary areas that should be considered in calculating the total cost of ownership: Software Licensing, Hardware, Services, and Maintenance. It may also be necessary to consider the cost of additional long-term staffing. It is extremely important that Peralta Community College District maintain a contingency fund for unexpected requirements. Management and support, communications, end-user expenses and the opportunity cost of downtime, training and other productivity losses should be considered as sub-categories of the four primary areas.

IT: Total Cost of Ownership (TCO)

Checklist

Every time a project is considered for the District, the ITS department should complete the following checklist.

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  Is there adequate budget allocated to complete the project/task?
  
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  Are there adequate resources to complete the project/task?
  
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  Are there ongoing software support maintenance needs/costs?
  
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  Is there a (3-5 year) refresh cycle plan for hardware & equipment?
  
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  Are software & hardware requests compatible for the project/task?
  
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  Does equipment (computers, tablets, etc.) have secure stations/check-out?
  
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  Does the existing network infrastructure support the project/task?
  
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    Wireless, wired, virtual desktop, remote access
    
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  Is there adequate electrical power?
  
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  Is there adequate data cabling?
  
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  Are there available ports on the switch?
  
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  Is there adequate space allocated for the project/task/activity?
  
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  Does this project/task meet ADA requirements?
  
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  Does this project/task meet OSHA standards?
  
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  Does the software integrate with PeopleSoft?
  
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  Is there single sign-on capability?
  

Sample Cost Analysis

All major projects including hardware acquisition should go through cost-analysis for the life of the contract prior to the selection phase. The sample below a simple cost analysis for a five-year computer replacement plan. All factors must be considered including data destruction, asset recovery, and

	Year 1	Year 2	Year 3	Year 4	Year 5
Laptop price	$1,013.85	$1,013.85	$1,013.85
Purchase
Number of units per year	220	220	220
Total funds expended	$223,047.00	$446,094.00	$669,141.00
3 year lease - LRF = .30033	$66,987.71	$66,987.71	$66,987.71
		$66,987.71	$66,987.71	$66,987.71
			$66,987.71	$66,987.71	$66,987.71
Total asset recovery service			$6,600.00	$13,200.00	$19,800.00
Total lease payment	$66,987.71	$200,963.12	$401,926.23	$535,901.64	$602,889.35
Total lease option					$622,689.35
Desktop price	$786.87	$786.87	$786.87	$786.87
Monitor price	$185.29	$185.29	$185.29	$185.29
Total	$972.16	$972.16	$972.16	$972.16
Purchase
Number of units per year	880	880	880
Total funds expended	$855,500.80	$1,711,001.60	$2,566,502.40
3 year lease - LRF = .30033	$256,932.56	$256,932.56	$256,932.56
		$256,932.56	$256,932.56	$256,932.56
			$256,932.56	$256,932.56	$256,932.56
Total asset recovery service			$52,800.00	$105,600.00	$158,400.00
Total lease payment	$256,932.56	$770,797.67	$1,541,595.33	$2,055,460.44	$2,312,393.00
Total lease option					$2,470,793.00
Total purchase of laptops and desktops combined					$3,235,643.40
Total lease of laptops and desktops combined					$3,093,482.35
Difference					$142,161.05