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Total cost of ownership in project management

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I'm new to project management and I want to know what the term "total cost of ownership" means. I did research the term on Google, but all I got was (very technical) definitions that are not related to project management. Can someone help?
asked 8 years ago by anonymous

1 Answer

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Total cost of ownership looks beyond the life of the project and accounts for costs such as deployments, roll outs, ongoing maintenance requirements, etc. I believe looking at the total cost of ownership (TCO) is important when evaluating projects because choosing the cheapest alternative that has astronomical maintenance associated with it isn't necessarily the best decision for the organization.  

I do, however, recommend also looking at something like CBR (Cost Benefit Ratio) as it will help determine what both the hard and soft benefits are for each potential project.  In practice, you can start with CBR and then add another column to your evaluation spread sheet for the maintenance costs.
answered 8 years ago by sdcapmp (45,840 points)

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