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Enterprise Software TCO: Calculating and Using Total Cost of Ownership for Decision Making, by Shaun Snapp
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Why is the Estimation of TCO So Important to Enterprise Software Success? The reason for the necessity of TCO is that the "price tag" on an item does not tell you a lot about that item's long-term total cost. This is true generally, but enterprise software is the extreme example of this well-recognized purchasing reality. In addition to the software license cost, there are implementation costs, support costs and maintenance costs. Without an understanding of TCO, there is a tendency to focus on acquisition costs--not only for enterprise software, but for any other item as well. It seems that many entities would prefer that companies not actually know their TCO, and instead present it as something dark and mysterious. Some of the criticisms that have been directed at TCO almost seem directed towards influencing companies away from calculating TCO because it's "hard." However, not only is it possible to calculate TCO; it is necessary and important to know TCO in order to make effective IT decisions. This first and currently only book on TCO and enterprise software shows the way.
- Sales Rank: #3073187 in Books
- Published on: 2013-12-09
- Original language: English
- Number of items: 1
- Dimensions: 9.25" h x .29" w x 7.52" l, .54 pounds
- Binding: Paperback
- 136 pages
From the Author
This is a book for people who want to roll up their sleeves and do some quality TCO analysis, or at the very least understand how TCO works. The book provides a method than can be used to perform TCO within companies. This is the same method used by Software Decisions to perform TCO estimations. Table of Contents
- Chapter 1: Introduction
- Chapter 2: The Basics of TCO
- Chapter 3: The State of Enterprise TCO
- Chapter 4: ERP: The Multi Billion Dollar TCO Analysis Failure
- Chapter 5: The TCO Method Used by Software Decisions
- Chapter 6: Using TCO for Better Decision Making
From the Inside Flap
Getting to the Detail in TCOOne aspect of making a software purchasing decision is to compare the Total Cost of Ownership, or TCO, of the applications under consideration: what will the software cost you over its lifespan? But most companies don't understand what dollar amounts to include in the TCO analysis or where to source these figures, or, if using TCO analyses produced by consulting and IT analyst firms, how the TCO amounts were calculated and how to compare TCO across applications. Not only will this book help you appreciate the mechanics of TCO, but you will also gain insight as to the importance of TCO and understand how to strip away the biases and outside influences to make a true TCO comparison between applications. By reading this book you will:
- Understand why you need to look at TCO and not just ROI when making your purchasing decision.
- Discover how an application, which at first glance may seem inexpensive when compared to its competition, could end up being more costly in the long run.
- Gain an in-depth understanding of the cost categories to include in an accurate and complete TCO analysis.
- Learn why ERP systems are not a great investment, based on their TCO.
- Find out how to recognize and avoid superficial, incomplete or incorrect TCO analyses that could negatively impact your software purchase decision.
- Appreciate the importance and cost-effectiveness of a TCO audit.
- Learn how SCM Focus can provide you with unbiased and well-researched TCO analyses to assist you in your software selection.
From the Back Cover
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Most helpful customer reviews
0 of 0 people found the following review helpful.
An Invaluable Guide
By Beth
As consumers we've probably all purchased an item without really completely considering all the expenses involved beyond the initial investment. For instance, with a car you pay for the car itself, but you also need to factor in insurance, maintenance, fuel, taxes, etc. These extra expenses need to be considered especially carefully when one is considering a large purchase
This book does an amazing job of exploring all the various expenses involved with an organization's major software purchase including not only the cost of the software itself, but the hardware, implementation, and maintenance costs. The author discusses all the areas where expenses may occur during every step of the process and and clearly and concisely outlines them. He also uses numerous graphs and tables to fully illustrate the material.
I highly recommend this to anyone who needs a clear, well written guide to assist you in the decision making process. No matter the size of your company this is an invaluable resource that can help you determine the real total cost of ownership for your potential purchase.
0 of 0 people found the following review helpful.
Informative and important book
By Louisana
Finally a book on the topic of enterprise software TCO! For those that are serious about performing TCO analysis and getting benefits from it, this book is definitely for you! Its amazing to me that this book is actually the first and only book on this important subject. I love how the author made this book so “readable.” If you have read any of the author’s other outstanding books, you will know that he has a direct style.
There is a lot of great information in this book but its broken down in graphs and easily manageable chapters. I’ve always confused TCO with ROI and was thrilled that the author even had a section on distinguishing the two. The author also helps to clarify confusion around similar terminology. There is so much great takeaway information in this book but perhaps most interesting to me was the chapter on using TCO for better decision making. I thoroughly enjoyed reading this informative book.
0 of 0 people found the following review helpful.
This advice will pay for itself, many times over!
By marillionite
As the author points out himself, there isn't another book on the market like this one. There will no doubt some wailing and gnashing of teeth on the part of software suppliers who would much prefer this type of information and analysis be kept hidden from potential purchasers. As I am currently involved in a major ERP evaluation, this book was really timely. I found myself champing at the bit to get past the introductory Chapter 1, which was if I'm being honest perhaps a little on the long side, and onto the real "secret sauce", but it was worth the investment to get to that point. The entire book is thorough, professional and of great practical use - money well spent by anyone considering a major investment in software.
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