Total Cost of Ownership (TCO)

March 1, 2005 05:00

By Carol Holzberg
     

Reality bites in unexpected ways when schools and districts confront the real cost of technology integration. Administrators quickly discover there's more to successful implementation than just the purchase price of computer hardware, software and networking equipment. Neglecting to budget for annual licensing fees, maintenance agreements, and end-user training, or overlooking expenses associated with installation and setup, annual Internet content filtering, anti-virus signature updates, or replacement parts can result in under-used equipment or computers falling into disuse. To plan realistically for educational technology integration, it's best to draw on the business model of TCO (Total Cost of Ownership), factoring in direct costs such as support, training, and management; indirect costs like downtime; and hidden costs incurred when teachers, staff, and office personnel must manage and support the equipment on their own. To learn more about technology and TCO, visit the following Web sites:

Understanding the Total Cost of Ownership of School Networks
What are the long terms costs associated with building a computer network or purchasing computers? What expenses must you factor in to support technology integration? As you watch this PowerPoint presentation, you'll have a more realistic picture of the true cost of technology integration and the tools you can use to measure those costs over time. This informative presentation can also be shared with school committee members, district administrators, and parents to reassure them that your school or district is spending its dollars wisely. Those without a PowerPoint viewer can view the presentation on the Web in HTML format.

Why Total Cost of Ownership (TCO) Matters
To justify your planned technology expenditures and measure the cost and effectiveness of your educational technology initiatives, you need special TCO tools geared to the K-12 community. Now thanks to Gartner CoSN (Consortium for School Networking), NCRTEC (North Central Regional Technology in Education Consortium), and the U.S. Department of Education, you can learn more about why TCO really matters. Download this PDF to learn more about the topic.

CoSN/Gartner TCO Tool & Case Studies
Technology integration begins with purchasing and installing equipment (e.g., computers, related hardware and networking infrastructure). To safeguard your capital outlay and ensure that the equipment is used appropriately (i.e., that it meets school goals and curriculum objectives) you must also budget for training, technical support, connectivity upgrades, maintenance, software licensing, replacement costs and building modifications to accommodate the additional networking and electricity infrastructure. CoSN (Consortium for School Networking) provides a helpful TCO Tool to calculate the costs of owning, operating, and integrating particular equipment. Download information about the K-12 Web-based TCO Tool that will help you calculate TCO for technology initiatives or work with the K-12 Total Cost of Ownership Tool online. You will need a username and password to access this tool, but there is no charge for registration.

TCO Glossary
Having difficulty explaining terms like allocated benefit and allocated cost? Stuck on empty between Internal Rate of Return and Net Present Value? Did you know that the actual cost of owning a piece of hardware accounts for only 15% of its total cost? For definitions of difficult TCO terms and important TCO facts, visit this Web site devoted to aligning information technology investment strategies with business value.

Investing in Palm handhelds: understanding total cost of ownership
If a Palm handheld costs much less than desktop or laptop computer, why not replace your desktop or laptop computers with Palm PDAs? David Gewirtz's easy-to-understand analysis of TCO as it applies to owning and operating Palm PDA handheld computers explains what handhelds actually cost, what people tend to do with them, and why desktop, laptop, and handheld devices are not interchangeable.

Technology's Real Costs: Protect your investment with Total Cost of Ownership
Sara Fitzgerald's 1999 article on the importance of factoring in long-term costs associated with operating computers and related technology makes sound economic sense even today. As Fitzgerald points out, many school districts still mistakenly view computer support staff as an unnecessary expense. Yet teachers and students really can't be productive if they must troubleshoot technology malfunctions on their own. Also be sure to read Fitzgerald's eye-opening analysis of the true costs of wiring and hardware in her online article, entitled School Spending 2000-Technology's True Cost. She may have done the research in 2000 but her conclusions are as timely today as they were then.

Sustaining Technology Through Time
In this four-part, hands-on online classroom lesson focusing on long term technology integration, students learn about the "total cost of ownership" of school equipment. Activities require youngsters to forecast the total cost of technology for one year at their school. They must also develop at least three strategies for sustaining school technology over time.

Information regarding the selection of an operating system in public schools
Is it less expensive to have one exclusive computer platform at a school? This article compares costs of Macintosh and Windows Operating Systems, revisiting the age-old PC vs. Mac debate. Which OS comes out on top? Head for the site and see for yourself!

What is total cost of ownership?
It seems TCO is not just an American issue. Educators in the British Isles appreciate its significance as well. The ICT (Information and Communications Technology) Web site provides helpful information to technology support staff. Visitors can brush up on TCO parameters and learn why it's so important to calculate all possible variables when computing the total cost of technology integration.

Critical Issue: Providing Professional Development for Effective Technology Use
Would you ride in a plane if you knew the pilot had never learned to fly? Would you seek advice from a doctor who never graduated from medical school? Training is key! Educational administrators, who must justify ongoing and meaningful technology professional development training to ensure their teachers know how to integrate technology in classroom curriculum, should read the information available at this Web site.

Technology Integration, Curriculum, and Student Achievement: A Review of Scientifically Based Research and Implications for Easy Tech
Would having the research-based data to prove the instructional effectiveness of software applications for word processing, data analysis, and slideshow presentation convince your school or district "powers that be" that technology is worth the long term investment? Are you looking for facts and figures to underscore the positive relationship between technology integration and improved student achievement? Then check out the executive summary of this data-driven research study and request a copy of the entire report from the folks at Learning.com. Simply Email them.

Top 10 Returns On Investment
Technology & Learning editor Susan McLester polls T&L advisors, writers and ed tech experts for their insights about technology investments yielding the best returns for schools. Their suggestions include: Timely and Sustained Teacher Support, High-Speed Internet Access, Video-on-Demand, Digital Projectors, and Wireless Environments. Find out how these technology initiatives (and several others) can result in significant gains in student achievement, bringing benefits that can easily justify their costs.

Carol S. Holzberg, PhD

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