Total Cost of Ownership, Essay Example

Identification and Total Cost of Ownership in Computer Systems

The first plan is to know what the user wishes to do with the hardware or software that is being purchased. This should be done in order to go in line with the familiarity to which the end user is with the new application. The other criterion is the innovations available, when the technology transitions at a faster rate, it is necessary to purchase the latest item. The pricing pattern is put in consideration when purchasing the hardware and software. This is done in order to acquire the intended price outcome before the market price deteriorates.

In purchasing computer system specifications, formal proposal is put on paper with aiding documentation as a formal organization setting. Specification of a computer is determined by various factors. The end-user wants are always put first, and their purpose on their new computer is considered. The kind of work that the user engages in determines the software or the hardware that is to be bought. Secondly, the capability of the end-user to operate the application software is also considered in acquiring specifications. Thirdly, the type of operating system is also considered. Lastly, the type of hardware that is equivalent to the operating system and applications is used to evaluate the ‘spec’ of the computer.

The informal specification of a computer involves; the basis of buying the computer hardware and software is in regard of the end-user wants. Secondly, the users comfort ability when using a certain operating system or the applications. They should use certain applications, which they are familiar with, or related to the ones they know. Thirdly, the type of application software used to open data files is assessed, and the amount of funds that the user has for hardware and software is evaluated.

The available technology is regarded as a puzzle as the end users are always in dilemma on when to buy the computer equipment and its components. There are occasions when the current technology is cost productive and other times it is ineffective. The information technology hardware and software, lead a foreseeable pricing pattern. After the buyers are charged price, a plot is made from the initiation of the product in the market and a price curve arises in the end. This price curve differs from the other items price due to maturation and manufacturing. Set up costs are inarguably high resulting from a short product life cycle, as the developers have to recover their costs urgently. At initial stage of a product life cycle, prices are high but drop quickly as new technology replaces the current one. In order to make the end-users buy, the prices are lowered to challenge the new technology.

Upon the purchase of a projector, the total value of owning and managing the projector is greater than its buying price. Other costs involved are lamp replacement and maintenance contracts, In order to purchase the best cost productive projector, purchase equation of all costs relating with each projector are evaluated. Total price of projectors have gone up while the value of lamp replacement has escalated. In total cost ownership, comparison is essential to evaluate the costs over a period. The following attachment shows various types of projectors and costs of replacing lamps over a period to illustrate total cost ownership. The best projector offers the longest time for replacement of lamps.

Works Cited

Weil, Roman & Maher, Michael. Handbook of Cost Management. 2^nd Ed. New York, NY: John Wiley & Sons, 2005. Print