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The initial sticker price is one thing, but in a race to get the purchase over with, sometimes we don't stop to think in terms of the bigger picture. Do you know what the purchase is actually going to cost you over time? In order to make a smart decision, each part of the supply chain needs to calculate the total cost of ownership (TCO) of any significant purchase, and the following five key questions should be answered before you sign on the dotted line.
How much will it cost to set it up?
Before you can use something new, you first have to set it up. Do you know how many hours or days it will take to get it deployed? Will you need to hire an individual or company to set it up for you? How much is that going to cost? Additionally, are you prepared for any expenses related to integration, field-testing, and bug fixes?
Why it matters: Simple device and infrastructure enhancements probably won’t present much of a hassle for a skilled IT team, but major updates can require more than your team might be able to deal with. Before purchasing any new technology, be clear on the time and resources you will need to integrate it across your organization. Keep in mind the potential costs of hiring consultants, systems integrators or software vendors along the way.
How much will it cost to train employees how to use it?
Using something new may seem like a piece of cake for you, but will your employees understand it just as easily? Is the user experience designed to be simple and straightforward? Are your employees going to have to learn something entirely new? Learning curves can be steep, and that’s why using mobile technology on smartphone platforms like iOS and Android that your employees already use and understand can be a smart choice.
Why it matters: Your employees are your biggest strength, and it’s important to think about any technology transitions from their point of view. Will the decision you make lead to their work being more or less difficult? There are times when additional training is necessary, but with such a wide range of consumer devices and mobile strategies such as bring your own device (BYOD) policies being used in the enterprise today, you can save money on training expenses and increase employee productivity and satisfaction by considering these options.
How much will it cost to operate and support it?
In a perfect world, your IT infrastructure would operate smoothly and never fail, but you can’t expect perfection. Is it designed to be reliable so it can endure the different working environments throughout the supply chain? How often could it break down, and when it does break down, how long will it take to fix? Are support and data services available in the cloud, and do you have an effective enterprise mobility management strategy?
Why it matters: Maintenance is an ongoing concern for any IT department. Devices can break, resulting in downtime and loss of employee productivity. In some cases, devices will need to be replaced entirely, which can result in additional unexpected IT spend. In other cases, you might need an ongoing service contract in place just to keep things operating smoothly.
How long will it last?
If something that is a seemingly good deal only lasts half the time of a more expensive option, is it really that great of a deal? Take the time to research the average lifecycle of the device, and consider how rugged devices like smartphones and other hardware accessories can actually extend the standard lifecycle and save money.
Why it matters: Before a new device can be integrated into your workflow, it’s important to know how long it will last. Understanding device lifecycles gives IT departments increased control over software and hardware implementation as devices break and newer technology emerges. Evaluate the lifetime of any device prior to your purchase. While rugged devices tend to last longer, they also cost more and tend to be updated less often; consumer devices require replacement sooner at a lower cost — giving buyers the ability to evaluate often and upgrade regularly.
Is your IT strategy ready for the future?
You’re going to have to get a replacement or new version eventually. When that time comes, what options do you have? Are discounts available? Also, are you knowledgeable about enterprise trends such as mobility, cloud computing, and the consumerization of enterprise IT so that you can make a purchase now that will prepare you for the future? Will your purchase give you valuable business intelligence to strengthen future decisions? Why invest in dedicated hardware—such as barcode scanners, mobile computers or GPS units—when smartphones and tablets are able to assist multiple workflows and provide insight through line-of-business applications?
Why it matters: It’s all too easy for businesses to rely on what’s worked for them in the past or what they need at that exact moment, but making decisions in that way can be very limiting. Companies that don’t plan for the future are backing themselves into a tight corner that can be very difficult to get out of. As we’ve seen time and time again, new technologies enable businesses to get more done with less resources, so even if the enterprise trends of the future make you a little uncomfortable, adopting them now is the key to gaining immediate benefits and being on the leading edge of where things are going next.
If you don’t know the answers to those questions, then you’re not ready to make a smart purchasing decision. It’s not always the case, but a low sticker price could be hiding a much bigger problem. Understanding an item’s total cost of ownership can make or break your IT spending strategy. So, do your homework. In one, five or ten years, are you going to be just as happy with that purchase as you were on day one?
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