PRICE x TOTAL COST OF OWNERSHIP (TCO)

Suppose you are about to decide on buying software for your business. Both options have the following modules: fleet management, prices management, reservation management, contract management and maintenance management. The price of the software "A" is $2,500, while the software "B" is $10,000. Which of them would you buy?

I guess that without thinking twice, your choice would be the "A" software. However, before reply so fast, how about doing other questions, which are not usually asked​​? See questions and answer in the table below:

Now, which of them would be your choice? Well, of course that would be the "B" software, instead of the "A" software that you had chose at the beginning, because in 6 months you would be saving $1,850. Estimating for 1 to 2 years, you would be saving more than $10,470 with "B" software. Great, right?

So next time, when you will be purchasing an asset, does not matter if it is a software, vehicle, equipment, etc, remember that is very important to evaluate not only the price, but also its lifetime cost. In that way you will be analyzing the "Total Cost Ownership" (TCO), which is used to analyze and support planning and decisions involving computer systems, vehicles, equipment, buildings, medical equipment and laboratory etc.