Total Cost Of Ownership (TCO) helps organizations understand the initial cost of a project and plan for ongoing costs once the solution is implemented. TCO cannot be known with absolute certainty after only the scoping phase. Certainty increases only once contracts are signed, implementation plans are detailed, and lifecycle cost factors are better understood. The scoping phase generally defines:
- High-level requirements and objectives
- Preliminary resource needs (staffing, licensing, hardware, consulting)
- A rough timeline and major deliverables
Total Cost of Ownership definition table
| 1. Upfront (initial) costs |
2. Ongoing (recurring) costs |
3. End-of-Life or Transition Costs |
- Software licensing
- Hardware purchases
- Implementation services or consulting
- Staff training and onboarding time
- Change management and communication efforts
|
- Annual software renewals/subscriptions
- System support and maintenance
- Upgrades and patching
- User support and administrative time
- Infrastructure (e.g., hosting, storage, security)
|
- System decommissioning
- Data migration
- Contract termination or replacement planning
|