What is the real cost of technology?

Saturday, November 13th, 2010 | technology

The real cost of a piece of technology is much different from what is stated on its price tag.  The phrase Total Cost of Ownership – also referred to as TCO – is often used to emphasize the fact that the true cost of an item is made up of all the expenses incurred from the time you acquire it until you dispose of it.

Let’s use an analogy to explain the concept of TCO:

A woman shops around for an exclusive dress to wear on special occasions.  She finds one she likes and feels that she can afford the price on the price tag – the shop may even offer a discount.  The price she pays for the dress is the initial cost.

On her way home she suddenly realizes that she does not have shoes to go with the dress and buys a new pair; she also decides that new earrings and a necklace would enhance her beautiful dress.  These items constitute additional costs.

When she gets home and tries on the dress with her new shoes, the woman discovers that the dress is a bit too long.  Since she does not have the skill to shorten the dress herself, she pays a seamstress to do the job – she did not anticipate this hidden cost when she purchased the garment.

On the first occasion she wears the dress somebody spills a cup of coffee on it.  The label on the inside of the dress clearly says: “Dry clean only.”  She now realizes that she will have this recurring cost as long as she keeps the dress.

The total cost of owning the dress ends up being much more that the price she saw on the price tag.

When you consider the use of technology for your classroom, the same four cost categories apply: 

Before rushing out to bring technology into your classroom, do the wise thing: calculate the total cost of ownership.  Then figure out how you can make it happen.

For more technology tips for teachers click here.

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5 Comments to What is the real cost of technology?

Tim Holt
Saturday, 13 November, 2010

TCO is much more difficult to calculate than it appears, thus many do not even attempt to do it.
For instance, a PC may appear to be less expensive than a Mac. That is initial cost.
But when you actually calculate things like : electricity usage, downtime, cost of virus software, cost of repairs, total lifespan…it comes out that Macs are actually less expensive. But most schools only have the idea about money from the here and now, and dont care about what something costs tow or three years from now.

Simple in concept, TCO, difficult in execution.

Kobus van Wyk
Saturday, 13 November, 2010

Thank you, Tim, your perspective is much appreciated. Your comment emphasizes the exact point I’m trying to make. TCO is often overlooked by schools – over the next few days I will discuss some of these cost factors of which teachers should be aware.

John Thole
Saturday, 13 November, 2010

Kobus, you raise a very good topic here. TCO is so important to understand and once understood, it becomes a helpful ‘tool’ for the ICT committee, SMT and SGB to use as a common point of focus for ICT development. It would be good to share a model for schools that they can use to quickly get to grips with TCO.

Christo Davids
Monday, 15 November, 2010

I fully agree with all the comments made. Hopefully you will touch on ROI (return on investment) soon.

[...] sizable portion of the total cost of classroom technology is taken up by its initial cost.  For this reason you must think carefully [...]

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