How to Find Devices with the Most Cost-effective Life Cycles
Determining the best IT Procurement Services for Business requires looking at more than just the up-front cost of something.
This is a question that many people struggle with.
The average lifespan of most equipment, including devices and infrastructure within your busines can be difficult to estimate when planning for its replacement or upgrade, especially if you’re not sure what will happen in the future!
The costly devices we rely on are central to our work. Few of us can make money without these devices, but budgeting for them can get, well, complicated.
Is it smarter to pay a little more now to save in the long run? That’s what a Life Cycle Cost Analysis (LCCA) will show you.
What is a Life Cycle Cost Analysis in IT Procurement?
“A life cycle cost analysis (LCCA) is an evaluation tool or method used to determine the expenditure required to purchase, own, operate, and maintain an item or service.
This analysis is a very critical and intricate part of your purchasing process and future financial forecast.
A life-cycle cost analysis is the best way to look beyond just a product’s sticker price and see it more holistically.
An LCCA helps you look beyond the sticker price of a device and see it more holistically. Is the maintenance worth the financial effort or do the upkeep costs outweigh your initial investment?
Life cycle costing calculation generally involves adding six types of costs;
- purchase costs,
- maintenance costs,
- operational costs,
- financing costs,
- depreciation costs,
- and end-of-life costs.
To get a clearer picture, engage in these six steps :
- Gather comparison products that are similar in function.
- Map out how the devices, liscenses or products will be used both now and in the future.
- Run a cost estimate
- Calculate its net present value (NPV)
- Analyse the data
Like any thorough analysis, you’ll have to consider many factors.
That includes unknowns like :
- how quickly the product will age and wear,
- how often it will be used,
- how quickly performance will slow,
- how much maintenance will be required,
- and how soon newer technology may make it obsolete.
To help make your LCCA as accurate as it can be, look to resources provided by the maker and impartial sources like product reviewers or past clients.
Though it may seem like a lot of effort, the process could save you big and help your small business use its limited financial resources more strategically.
We’re here to help you find the most cost-effective IT Procurement services & solutions for your business.
We know that every company has different needs, which is why our team will work with each one on an individual basis before suggesting any specific technologies or services they may want featured in their facility
To deliver efficiency without sacrificing quality!
Your business depends on the devices that keep it running, so why not find out which ones are best for you?
We can help with all of your needs – just contact us today! 0203 011 1234 or email@example.com