5 Costs That TCO Calculations Don’t Uncover

Every technology buyer knows that price represents only part of the Total Cost of Ownership, or TCO, of any solution. There are in fact four components to TCO: quality, service, delivery and, of course, price, collectively referred to as QSDP. All of your hard-dollar costs fall into one of these categories.

However, does TCO really measure all of your potential costs? In a word, no. That’s why at Tyfone we’ve coined the term Total Cost of Relationship, or TCR. TCR looks beyond TCO to examine costs you may not have previously considered. These include:

  1. The cost of a rough implementation. A bad conversion typically leads to a bad member experience. If it’s bad enough, you could lose members. The cost to replace those members can be quite high.
  2. The cost of foregoing a valuable project. If a vendor charges too much for custom work, you might be tempted to pass on one project or another. That saves you money, right? Perhaps, but you have to factor in member dissatisfaction at not having access to whatever feature you decided against.
  3. The cost of mediocre technical support. If a vendor’s tech support is slow and unresponsive, that creates a drain on your resources and ultimately affects member experience.
  4. The cost of inferior communication. In today’s environment, it’s essential to stay nimble and make changes when necessary. That becomes much more difficult if your vendor doesn’t keep you continuously engaged and “in the know.”
  5. The cost of having to switch vendors. If your vendor doesn’t work out, you can always switch at the end of the contract, right? Sure, but is that really what you want? You’ll save considerably in the long run if you choose a vendor that can meet your needs for the next decade or two.

At Tyfone, we’re on the winning side of all of these. We consider ourselves a relationship organization that happens to create amazing technology. If you’d like to learn more about the hidden costs of any technology purchase, take a look at our article, Measuring the True Cost of Technology: Beyond TCO, There’s TCR.

2024-09-13T08:34:42-07:00
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