Total cost of ownership (TCO)
Our glossary explains basic terms and abbreviations relating to mobile working, the use of smartphones and tablets in the corporate environment (Enterprise Mobility) and security aspects in the use of mobile devices.
Total cost of ownership
Accounting method
Total cost of ownership (TCO) is a method of calculating the total cost of capital goods in a corporate context.
The aim here is to make investment decisions taking into account all costs incurred during operation. In the case of mobile devices, for example, not only the acquisition costs are calculated, but also maintenance costs and expenses for configuration, deployment, training and repairs.
Direct costs + indirect costs = total cost of ownership
When calculating the total cost of ownership, it is common to distinguish between direct and indirect costs. In the area of enterprise mobility, direct costs are, for example, the acquisition costs for smartphones or tablets. Indirect costs can be the effort required to configure the device or for mobile application management. An operating cost analysis may reveal “hidden” costs, such as in the case of mobile bundles.
The analysis can then identify alternative strategies, such as a buy-and-rent-back scenario or a rental model for corporate phones.
