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 it easier and cheaper to upgrade equipment as your requirements change. See Financing equipment.
• 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.
• Costs of consumables, such as printer toner, can mount up. Bulk purchases can offer significant savings.

6.3 Skimping on services is a false economy.

• Investing in good training from the outset can pay dividends. Hidden costs of errors and time wasted by untrained employees can easily outweigh training costs.
• An appropriate maintenance contract will minimise downtime. Loss of business if the system fails can be far more expensive.

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

• You may need to upgrade computers to handle new, memory-hungry software or increased storage requirements. Many computers can be upgraded by replacing individual components rather than the entire machine.
• Software publishers may release new versions offering better performance or features. After a few years, they may stop supporting old versions of the software.