Ask the Board – March 20, 2017 | JOHN BAILEY

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What are the key considerations that integrators should review with their customers regarding total cost of ownership to ensure that there are no surprises?”


Surprise and technology usually do not go together in a pleasant way. All too often, the surprise is the unexpected outlay of costs related to a key failure or unexpected subscription renewal. Integrators have a responsibility to inform customers of not only the initial costs, but also the costs associated with keeping systems up and running.

Any TCO calculation should include three key components—acquisition, support and replacement/upgrades. Often, customers are so focused on the first item, acquisition, that it’s easy to miss the significance of the other two. Certainly, capital expenditure (or commitment to an OPEX contract model) is an immediate concern for businesses that are looking at technology deployment. As well it should be; the initial investment can be significant to the business, and a successful initial launch is often key to the success of the entire project. We also often see that within a customer’s business, there are different groups supporting different areas of responsibility, making it difficult to bring all stakeholders to the table early. A Project Manager will be primarily tasked with making the initial deployment project a success, and may not be concerned with what will happen to the system a year or more down the road. Ensuring that all stakeholders are represented in the TCO calculation is critical.

Once the technology is deployed, there will be costs associated with maintaining the system. This includes ongoing licensing, subscriptions and content creation services, as well as general maintenance, repair and support for the hardware components. These costs may be coming from several different sources and may include cost centers internal to the customer. Typically, the integrator who is chosen to deploy the technology will be contracted to support the hardware after installation. This includes services such as break/fix, technician dispatch, general maintenance and cleaning, replacement of consumables (such as batteries, filters) and onsite support. These services are important to extend the service life of the systems as well as to prevent or rapidly address any failures that may occur. With digital signage systems, failures can impact the message quickly. What does it say about your brand when your technology unexpectedly “goes dark?”

Lastly, and sadly, nothing lasts forever in the technology world. Investing in commercial grade equipment (this is especially true of displays) will extend their service life and reduce failures. If a customer elects for inexpensive consumer-grade gear, they should expect to have more failures, more replacements and more unforeseen costs. And no matter what grade of equipment is deployed, it will eventually need to be replaced due to age or the need for upgrade. Planning for those upgrades or replacements can be difficult, but this is one area that is often overlooked with regards to TCO. We can look at warranties terms, past track records and other data to try and determine how long a given piece of equipment will reliably operate. Then, we must apply some tolerance for risk to the equation. Do we want to replace equipment before failures become common, or can we tolerate some failures in our application? Beyond the direct costs, what other impacts do failures and disruptions have on our business?

This holiday season just might be the one time of the year when surprise and technology can come together in a way that we can actually enjoy. For any other time of the year, let’s work proactively to reduce risk and surprises by anticipating the costs and actions required to keep technology systems online and running smoothly.

About Author

Vice President of Technology
Whitlock

MEMBER OF THE DSE ADVISORY BOARD
Integrator Council

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