The total cost of ownership is arguably the most important economic factor of any purchase but it is seldom observed as the total cost as opposed to the initial cost. The author Terry Pratchett wrote about the concept well.
“A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.”
In this example it shows that while the initial cost of buying the cheap boots is $10, having to buy them over a lifetime of use adds up to be more expensive than buying the quality product made for use in that environment. There are hard costs and soft costs to be considered.
Hard Costs
A rugged notebook like the Panasonic TOUGHBOOK FZ-40 or Getac B360 devices can last for years and withstand the punishment the elements may bring. A cheap laptop from a big box store can easily be 1/3rd the price of the rugged laptop but throughout a 5 year time period if that laptop needs to be replaced multiple times the total cost of ownership is greater on the cheap devices than the originally more expensive better quality Panasonic TOUGHBOOK or Getac rugged laptop.
Soft Costs
Soft costs can be more difficult to calculate but are no less damaging than hard costs. Rugged laptops like the Panasonic TOUGHBOOK FZ-55 or Getac S410 are designed to last when other devices fail. If these are being used in a professional environment the down time can get extremely expensive. If a construction crew is using an electronic device to have blueprints available, manage the time clock of folks on the ground, and reference code requirements not having access to that device can cost 10’s of thousands of dollars as the down time of each employee, tools used, and 3rd party assets like inspectors are not properly utilized. While the initial upfront cost may appear lower the downtime soft costs will often considerably exceed the initial hard costs.
In Summary
The value in technology is in being able to use it. It doesn't matter how much it costs if you cannot get productive value from the operation. It is all too common and easy to focus on the initial purchase cost and ignore the total cost of ownership. The opportunity cost associated with failed equipment often makes an enormous impact. This phenomena is most keenly observed in situations where the person approving the funds is not the same as the person using the item. It is easy for someone in a leadership position to use a potato chip laptop or tablet from the comfort of their home or office and extrapolate that device can meet the needs of an employee out in the field. More times than not those devices fail rapidly and underperform, losing more value for the company than the difference of initial cost.
