What is Total Cost of Ownership?
The complete cost of acquiring, deploying, and operating a technology over its lifetime.
Total Cost of Ownership (TCO) calculates the complete cost of a technology investment over its lifecycle, including acquisition costs, implementation, training, maintenance, support, upgrades, and eventual decommissioning. TCO is critical for transformation business cases because the initial purchase price of a tool is often a small fraction of its true lifetime cost.
Related terms
Business Case
A structured document justifying a proposed initiative by analyzing costs, benefits, and risks.
ROI Measurement
Calculating the return on investment for transformation initiatives to justify continued funding.
Technology Debt
The accumulated cost of deferred technology maintenance, upgrades, and modernization.
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