The Total Cost of Ownership (TCO) is a subject of utmost importance in the development of IT infrastructure, governance processes, and Return on Investment (ROI), directly impacting cost reduction and the superior final quality of projects.
About Total Cost of Ownership
- It is a measure to reduce costs and approximate management;
- It highlights that maintenance has the highest cost in solutions;
- It is essential to manage the value of each IT business;
- It involves processes, people, technology, such as IT support and end-user support, hardware, and software, among others.
Dealing with this topic is very important because often a low-quality system can be very expensive, just as the most expensive system can be inefficient for the actual needs of the business.
Every business is different, and to break the paradigms that hinder final success, it is necessary to understand that the use of hardware must always be aligned with the business model. To this end, it is essential to utilize the best governance processes and existing market practices.
So, is it better to buy hardware or rent hardware?
Buying hardware is not always the best choice, and to make the ideal decision it is essential to analyze each infrastructure process in the right order and verify the main requirements demanded by the system, in addition to business needs.
Hardware rental has won over an increasing number of companies, as it can generate significant savings in acquiring items essential for work development, as well as in technical assistance and maintenance services. In addition, service providers contribute to cost reduction since it will not be necessary to expand the team or conduct training to manage the rented hardware.
To help with the decision:
Better to buy when…
- It will not be necessary to renew hardware frequently;
- When there is an internal technical assistance team;
- When there is working capital.
Better to rent when…
- For companies with high employee turnover;
- That have frequent temporary projects and the need for cutting-edge technology;
- Without an IT structure and without working capital;
- That need agility in service execution.
How does this work in practice?
Imagine that company X has a constant update flow, meaning it needs to replace hardware frequently. What would be the benefits of renting?
- Agile solutions, support, and cost reduction.
Company X in the example needs to replace hardware every 18 months to meet update needs and specialized configuration. The budget for acquiring the equipment would cause a major financial hole, and therefore, the ideal decision is to opt to rent all the hardware.
With rental, the company will have full support, and at the sign of any problem with the machines, the service provider performs the necessary support with agile solutions and noticeable savings, especially when analyzing the cost-benefit of the service.
Internal team or acquisition of services? How about a hybrid model?
People will always be essential in IT projects, but it is possible to reduce costs and improve processes.
Invest in services, allowing part of the internal team to be completely directed and focused on the fundamental tasks that require each of their skills.
Meanwhile, repetitive and quality processes can be monitored and executed by equipment that allows the automation of these processes, for example.
Advantages of the hybrid model:
- Cost reduction;
- Work optimization;
- Superior final quality, since the company relies on internal talent as well as specialized service-providing solutions;
- Quick solution and support;
- Return on investment, after all, the model is one of the most interesting for the sector, because while it invests on one side, it reduces on the other.
It is essential to separate business needs from wants, because only then is the Total Cost of Ownership optimized, and you avoid bottlenecks in the final result or in the maintenance of IT projects.
