Total cost of ownership

Business leaders like you are expected to do more with less. Cost-cutting and belt-tightening are a way of life. Capital budgets are being scrutinized like never before.

IT spending—a major expense for most organizations—is under particular pressure. When new technology projects or upgrades are proposed, a growing number of companies require total cost of ownership (TCO) assessments.

At its most basic, a TCO review helps IT managers assess both direct and indirect costs of an IT solution, as well as the benefits. The goal is to develop a final figure that reflects the full effective cost, all things considered.

Facts about TCO

• Industry analysts agree that only 30% of companies' IT expenses are hardware-related. The other 70% encompass costs that are harder to quantify—items like support (including labor), maintenance, energy and disposal fees.
• Holding onto IT assets for too long can lead to significant additional expense in a number of areas; in particular, maintenance.
• Replacing equipment on programmed schedule can improve overall utilization of resources and also lower associated costs, such as energy consumption.

Leasing Provides an Answer

Companies that take a total cost of ownership approach to IT acquisition often turn to leasing as a means of refreshing equipment and reducing costs. HP Financial Services specializes in helping customers' implement a lifecycle approach to IT—gaining efficiencies and capabilities while keeping the lid on cost.