Wednesday, September 14, 2011
How are ROI and TCO Calculator / Sales Tools different?
ROI Tools make the case for change, comparing cash flows between the status-quo and a proposed new solution / change. ROI Tools sometimes include TCO calculations in order to calculate the benefits of the proposed solution (the difference in TCO before the solution is implemented versus after), as well as to tally the investment requirement (being sure that the tallied costs for the proposed solution are complete and cover all possible capital and operations costs over the useful lifetime of the solution).
TCO Tools are used for comparisons, to compare the total costs and differences between various solution options. Sometimes this is to compare current costs of maintaining the status-quo versus the costs for the proposed new solution, or to compare head-to-head the costs of proposed solution options.