Frequently Asked Question
What is meant by Total Cost of Ownership?

TCO includes all costs related to an ERP system during its lifecycle. A TCO analysis can
be extremely useful for budgeting or for choosing between alternative technologies. It is a
standard process used to minimize risks, especially when budgets are tight. TCO must be
compared to the total advantage or benefit of ownership in order to determine the
feasibility of the purchase.

TCO can be categorized into direct costs like fees for software licensing, hardware costs,
cost of professional services, cost of internal staff, integration, costs for maintenance of
software, and indirect costs like system downtime and the corresponding troubleshooting,
cost of delays, cost of under productivity at the user end.

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