Total Cost of Ownership for new Computers
Last Modified: 21 March 2012
When purchasing a new computer for your library, it’s easy to hear a great price for the hardware and think that you can save the library a lot of money. But in reality, we should be considering more than just the cost of the equipment and look at something called total cost of ownership, which looks at not only how much it costs to buy the equipment, but also what is needed to use, support and maintain that equipment throughout its life.
So instead of just looking at the price of a computer, here are a few other things that can quickly add to the total cost of ownership:
- Verify equipment specifications meet library needs (staff time).
- Order the new equipment (staff time).
- Install and set-up equipment (staff time).
- Install or configure software (anti-virus, filtering, lock-down tools)
- Physical set-up of new equipment
- Does old equipment need to be moved, recycled or discarded?
- Do new tables or areas need to be set-up?
- Training staff and patrons to use the new machine. If the set-up is different from existing equipment, staff will need to spend some time considering new policies and procedures. (staff time throughout the life of the equipment)
- Software renewal and updates throughout the life of the equipment (staff time for ordering, invoicing and installation).
- Paper and toner for the printer that the computer uses.
- Troubleshoot problems (staff time throughout the life of equipment).
- Internet access to that computer on an annual basis.
And don't forget the little things, such as:
- Pay the invoice that is received from the vendor (staff time).
- Electrical costs on an annual basis for running the equipment
- Cleaning (supplies and staff time throughout the life of equipment)
More than you would have thought, right? When looking at this list, people will often question the whole issue surrounding staff time for things like invoicing or troubleshooting equipment. The argument is that if the library already has staff dedicated to doing these types of things, why should they have to consider that as part of the total cost of ownership. And the answer is, if the equipment were never there, they wouldn’t be spending time supporting it, so you need to consider that as part of the cost. In reality, the total amount of time that staff members dedicate to a computer over the life of the equipment could easily equal the price that was paid for the equipment. In some cases, a library may be replacing old, outdated, problematic equipment with newer machines which chould potentially reduce staff time sent troubleshooting, which is a great improvement. And this is not to suggest you should actually go in and put a line-item in the library budget to account for these specific needs. Rather, you should realize that the one-time hardware cost that the library pays is not equal to the total cost of ownership and consider the availability of resources before making a purchase.
Other issues that are important to consider is what does the cost of the hardware include. A low price is often very appealing, but reading the specifications for the equipment will usually show that there are a few things missing from that sticker price. Most companies offer a one-year equipment warranty in the cost, but considering how much use the public access computers in your library get and how rough some users can be on equipment, it doesn’t make the best sense to accept a one-year warranty. A one-year warranty is an especially bad idea for smaller libraries that don’t have dedicated technical support available on the staff. You could easily spend half the cost of the computer getting a part replaced after you factor in labor costs. So instead of taking the standard one-year warranty, upgrade to a four-year warranty instead, even though it is more expensive. Without the staff or expertise to work through technology problems, the library can depend on the warranty to protect their investment. .
It’s no secret that libraries often struggle with budget issues and it is easy to look at the lowest sticker price and make a quick decision about purchases based solely on that cost. However, that sticker price never represents the total cost of ownership and you will need to explore the impact that new equipment will have on your library and staff to insure that you are making an investment that makes the most sense for the future and that the library has the resources to support that decision.
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