Total cost of ownership is used to support decisions involving computing systems, vehicles, laboratory and test equipment, medical equipment, manufacturing equipment, etc. A good TCO analysis brings out the "hidden" or non-obvious ownership costs that might otherwise be overlooked in making purchase decisions or planning budgets. The model provides an effective tool for assuring business case builders and case recipients that every important cost item is included and that everything irrelevant is excluded. The analysis begins with the design of a comprehensive cost model that completely covers the subject of the case, and which supports the purpose and needs of decision makers. Cells of the matrix identify cost items that are planned and managed together (have common cost drivers); rows represent major resource categories, and columns represent RDT&E lifecycle stages. TCO analysis is not a complete cost benefit analysis. When this approach is used in decision support, it is usually assumed that the benefits from all alternatives are more or less equal, and that choices differ only on the cost side. Conclusion The purpose of this Return on Investment/Business Case Analysis is to establish a total cost of ownership/operation and have the information needed for a financial justification in any research project. For further information related to these topics, please go to the DAU website training program at ; Click on -> -> Case “Continuous Learning” “Browse Continuous Learning Modules” “Business -> for Analysis” (CLL015) “Register Course”.
Total cost of ownership is used to support decisions involving computing systems, vehicles, laboratory and test equipment, medical equipment, manufacturing equipment, etc. A good TCO analysis brings out the "hidden" or non-obvious ownership costs that might otherwise be overlooked in making purchase decisions or planning budgets. The model provides an effective tool for assuring business case builders and case recipients that every important cost item is included and that everything irrelevant is excluded. The analysis begins with the design of a comprehensive cost model that completely covers the subject of the case, and which supports the purpose and needs of decision makers. Cells of the matrix identify cost items that are planned and managed together (have common cost drivers); rows represent major resource categories, and columns represent RDT&E lifecycle stages. TCO analysis is not a complete cost benefit analysis. When this approach is used in decision support, it is usually assumed that the benefits from all alternatives are more or less equal, and that choices differ only on the cost side. Conclusion The purpose of this Return on Investment/Business Case Analysis is to establish a total cost of ownership/operation and have the information needed for a financial justification in any research project. For further information related to these topics, please go to the DAU website training program at ; Click on “Continuous Learning” -> “Browse Continuous Learning Modules” -> “Business Case Analysis” (CLL015) -> “Register for Course”.
3_BCA-ROI%20Instructions.docx