Question 105 - CIS-HAM discussion

The total cost of ownership (TCO) is a financial estimate that measures the direct and indirect costs of owning and operating an asset over its entire lifecycle. The TCO includes the following components:

Original cost: This is the initial purchase price of the asset, which may include taxes, fees, shipping, and installation costs. The original cost is also known as the acquisition cost or the capital expense.

Operational expense: This is the ongoing cost of maintaining and using the asset throughout its lifecycle, which may include repair, upgrade, maintenance, support, energy, consumables, and disposal costs. The operational expense is also known as the operating expense or the opex.

Depreciation expense: This is the reduction in the value of the asset over time due to wear and tear, obsolescence, or market changes. The depreciation expense is also known as the depreciation cost or the depreciation charge.

Delivery cost: This is the cost of transporting the asset from the supplier to the buyer, which may include freight, insurance, customs, and handling fees. The delivery cost is also known as the shipping cost or the transportation cost.

The TCO can be calculated by adding the original cost, the operational expense, and the depreciation expense, and subtracting the delivery cost. Alternatively, the TCO can be calculated by multiplying the annual cost of ownership by the expected lifespan of the asset.

Hardware Asset Management - ServiceNow, which provides a data sheet with the key capabilities and benefits of the Hardware Asset Management application, including the ability to track the total cost of ownership of assets.

Hardware Asset Management - Customer Success - ServiceNow, which provides a success map that outlines the processes and best practices for implementing, running, and optimizing the Hardware Asset Management applications, based on the Capability Blueprint framework.

[Total Cost of Ownership (TCO) - Investopedia], which explains the concept and calculation of the total cost of ownership, and why it is important for business decision making.