TCO — Total Cost of Ownership

tco analysis displayed by hand drawing circle around the phrase total cost of ownershipIn times of fiscal constraint and cutbacks, organization are looking for ways to better control their ongoing costs and to manage the costs of new acquisitions. Examining total cost of ownership (TCO) during procurement planning is an approach that can uncover ‘hidden’ costs previously unaccounted for, to ensure the organization is truly receiving best value.

Proactive procurement professionals try to estimate the total cost of owning or operating a product, equipment or services, It can be a complex computation, taking into account product life cycle costs and disposal or remediation costs over several years where many of the variable costs are unknown or may be out of our direct control – legislated requirements for example.

To introduce TCO as a routine part of procurement planning, you need to understand how to calculate TCO, the impact it may have on the procurement outcome, and how to use it as a strategy.

What should be included or excluded in the cost estimates from a procurement perspective? What are internalized costs versus externalized costs? How do cost and volume fluctuations affect a business case? How does the TCO affect our behaviour and reward systems?

An organization may encourage autonomous decision-making in its reporting structure which invites a dilemma over lowest cost versus best value. Can an understanding of TCO remove the subjectivity or bias in these decisions?

This Webinar will use case studies to examine the TCO analysis in various procurement contexts, and provide quantitative tools for procurement staff to evaluate options and make business recommendations based on objective cost assessments.

Date: July 8, 2020
Time: 10:00am to 11:30am PST
Instructor: Larry Berglund
Format: Online seminar with two-way voice and text communication between you/your team and your instructor
Investment: $119 per person; register 5 or more and get 10% off

Learning Objectives

  • Review the key issues which affect TCO, services and construction
  • Examine internalized versus externalized costs
  • Explain how fixed and variable costs can be measured
  • Discuss the importance of a business case based on objective costs
  • Overcoming our bias in decision-making

Public Session

July 8, 2020

10:00 – 11:30 AM PST

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