Information as value rather than cost

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: If a chief information officer (CIO) suddenly jumps out of a window, look outside for the lure - in all probability, you will find a tech marketer waving a reduced cost offer. Such impetuous behaviour, to those acquainted with the field, is not odd at all. To many, it is even ‘strategic’. After all, cost-saving is what CIOs have been justifying their jobs on, and this is precisely what vendors want to exploit. As with all such phenomena, there exists a reigning buzz-phrase that can be waved for magical effect at meetings and the like: Total Cost of Ownership (TCO). So hardened has its appeal become, that it is referred to as a sales tool. And, indeed, it is. It makes people across the table sit up and listen. Today, IT companies claim lower TCO on almost all their wares, including hardware, software and networking gear.

But is TCO an indicator of real gains —or is it just another sales gimmick to hoodwink the technology buyer? In the context of its usage domain, TCO is a financial estimate that is supposed to help enterprise users evaluate direct and indirect costs involved during the lifetime of an IT project. The total cost includes the initial investment and post-deployment expenses such as manpower training, administration, power consumption, and so on. Though companies are always keen to use this estimation to calculate their return on IT investments, it’s easier to get nice looking printouts quantifying the same than anything that will prove accurate over the project’s actual lifetime.