Total Cost of Ownership (TCO)
Total Cost of Operation or Total Cost of Ownership (TCO) is the cost basis for determining the economic value of a business investment. Also defined as a financial estimate whose purpose is to help consumers and enterprise managers determine direct and indirect costs of a product or system.
A TCO analysis includes total cost of acquisition and operating costs. A TCO analysis is used to gauge the viability of any capital investment. An enterprise may use it as a product/process comparison tool. It is also used by credit markets and financing agencies. TCO directly relates to an enterprise’s asset and/or related systems total costs across all projects and processes, thus giving a picture of the profitability over time.
CFO Insight provides clear visibility into the Total Cost of Ownership (TCO) by tracking the flow of money across various silos in the enterprise.
CFOs can establish financial metrics for metering the flow of money forecast based on crucial lead and lag indicators for the health of the business.
Whether a CFO is analyzing income statements, product profitability, or revenue per employee, the financial decisions are made with a clear and complete perspective of the business in the overall.
Finally, the CFO gains complete confidence in the decision variables thereby quickly responding to market fluctuations.