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What is Total Cost of Ownership....Really?

November 6, 2017 at 12:00 PM / by Rob Gilbert, Sr.

Many companies brag about their ability to help you understand and decrease your TCO – Total Cost of Ownership as it relates to your document output.  But do they really know what goes into your TCO?  Are they really paying attention to the entire lifecycle of your document production, or just the hardware, consumables, and service aspects of your costs?  Here are a few things to consider:


Infrastructure is typically where most vendors focus when discussing your TCO with you.  What goes into Infrastructure?  Hardware, service, consumables, paper, and power.  Almost any “solution provider” will tell you that they can save you up to 30% on your existing TCO costs in your organization.  But what are they really saving you?  Infrastructure (your visible hard costs) accounts for about 10% of your overall cost of ownership in the document lifecycle.  So doing the math, if they can save you 30% of 10%, they can actually save you 3% of your overall costs.  This is where most vendors fail, because there is so much more to account for.

Management of documents and the document process accounts for 15% of your TCO and includes things like IS Support and Infrastructure, Administration, Purchasing, and Facilities.  Network and device management, programming, software licensing, facility costs, and contract billing are all encompassed in the internal management of your documents and are often overlooked as areas for improvement.

End User Time accounts for a full 28% of the cost associated with your document production.  One of the largest expenses in any business is people.  Employees interact to produce documents, and they spend time interacting with their computers and the hardware that prints or copies their documents.  Often there is document manipulation that occurs after printing.  Because we are all human, occasionally there are mistakes or errors that need correcting, or other internal problems that delay productivity. 

Document Management accounts for 47% of the total cost of ownership relating to your document production.  There is no wonder that this is the largest expense in any organization.  Document storage and archival expenses are significant.  Document retrieval can be a huge expense, both from a time loss and productivity perspective.  If employees are spending time looking for documents or gathering them, they are not performing other key functions that they were hired for.  Document capture and indexing can be very time consuming as well, and if there is no cohesive method to the process it can create other issues internally. 

Keeping your workforce productive and streamlined is more important than ever.  Working with a company that truly understands what brings efficiency, productivity, and profitability to your organization is crucial to your success.  How do you find a company like that? For starters, now you have information to discuss when you meet with a vendor.  A few vendors may be able to speak in generalities about some of this information, but here is a simple test.  When you meet with a vendor ask this simple question: “Do you personally use the solutions and products you are discussing with me?”  I submit that any company which doesn’t use solutions they discuss may not have a true knowledge base to consult from.  Instead, align yourself with a company that has proven their ability to provide for you because they have achieved their own successes internally first.

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Written by Rob Gilbert, Sr.

Rob’s primary areas of expertise for Imagenet include sales pipeline health & growth, consultant cultivation, the Imagenet University training program, and sales promotions and lead generation campaigns. Rob has 34 years of experience in office equipment sales and sales management, dealer ownership, salesforce automation marketing, sales team deployment, and leadership and management training and coaching. When he’s not working, Rob enjoys golf and running.

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