What is a key focus of “Total Ownership Cost” analysis?

The concept of "Total Ownership Cost" (TOC) analysis emphasizes evaluating all costs associated with a system throughout its entire lifecycle. This includes not only the initial acquisition cost but also ongoing expenses related to maintenance, operation, support, and eventual disposal or decommissioning of the system.

Focusing on TOC allows organizations to make informed financial decisions by considering the long-term financial implications of their investments. This holistic approach ensures that decision-makers account for all relevant costs, which can significantly exceed the initial purchase price over time, leading to more effective budget planning and resource allocation. By recognizing the cumulative costs throughout the lifespan of a system, entities can avoid potential pitfalls associated with lower upfront costs that may lead to higher expenses in the long run.