Specifying and Purchasing IT

6. The Lifetime Cost

When comparing the costs of different systems, look at the total lifetime costs.

6.1 Upfront costs generally include the price of hardware and software and additional costs for installation, configuration and training.

• A flexible lease spreads the cost of acquiring equipment, and may make upgrades easier and cheaper.
• Some software costs include an annual support or subscription charge. For example, anti-virus software updates.
• You may be able to negotiate discounts for bulk purchases.

6.2 Continuing costs will include any maintenance and support services.

• Costs may be fixed or depend on how much you use the service.
• Bulk purchases can offer savings on consumables like printer toner.

6.3 Skimping on services is a false economy.

• Investing in training can pay dividends. The cost of errors by untrained employees can be high.
• An appropriate maintenance contract will minimise downtime.

6.4 Sooner or later you will need to upgrade or replace hardware and software.

• You may need to upgrade to handle new software or provide extra storage. Many computers can be upgraded but it is often more cost-effective to replace them.
• Software publishers may release new versions offering better performance or features. After a few years, they may stop supporting old versions of the software.