Database Technology and Information

Management I

Total Cost of Ownership

Analyses

Semester Thesis

at the Oekreal
School of Business Zurich

Prof. Dr. Klaus R. Dittrich

Prof. Dr. Kurt Bauknecht

Presented by: Erik W. Marke, cand. MBA

Frauenfelderstrasse 82, 9548 Matzingen, Switzerland

(Accepted / Formal:
rejected)
Content:

Place and Date: Proof-reader: Conradin Rüegg, MBA

Table of Contents

1. INTRODUCTION 3
1.1 Terms 3
1.2 Questionnaire 3
1.3 Objectives 3
1.4 The TCO-Model 4
1.5 The Profit Center approach 5
1.6 Limitations of TCO 5
1.7 Delimitation to others 5

2. ANALYSING AREAS OF COSTS -- BUDGETED (DIRECT) COSTS 6

2.1 Definitions of Budgeted (Direct) Costs 6
2.2 Hardware and Software 6
2.3 Management 8
2.4 Support 11
2.5 Development 14
2.6 Communications fee 15

3. ANALYSING AREAS OF COSTS -- UNBUDGETED (INDIRECT) COSTS 16

3.1 Definitions of Unbudgeted (Indirect) Costs 16
3.2 End-user costs 16
3.3 Downtime 17

4. CONCLUSION 19
4.1 Is There a Productivity Paradox? 19
4.2 IT Remedies 20

5. APPENDIX 22
5.1 Glossary - By Category 22
5.2 Illustrations 25
5.3 Literature 25
1. Introduction Total Cost of Ownership Analysis
1.1 Terms Side 3 of 1

1. Introduction

1.1 Terms
CASE Computer Aided Software MIS Management Information
Engineering System
CEO Chief executive officer NC Network computer
CFO Chief financial officer NETPC Network PC
CIO Chief Information Officer NIC Network interface card
COO Chief operations officer NOS Network operating system
DCO Data Center Operation NT New Technology
DT Desktop P&P Policy and procedures
EIS Executive inform. system PC Personal Computer
EUC End-user Computing PDA Personal digital assistant
HR Human resources ROC Real Ownership Cost
IC Information Center ROI Return on Investment
IE Information Engineering ROM Return on Management
IS Information systems TCO Total Cost of Ownership
IT Information Technologies TOC Total Ownership Cost
JITT Just-in-time training TQM Total quality management
LAN Local Area Network WAN Wide Area Network
LOB Line of business WBT Windows Based Terminal
WWW World Wide Web (Internet)

1.2 Questionnaire
For such an innocuous bit of corporate scenery, PCs can
generate surprising controversy when it comes to figuring 50000
out how much they cost. Ask the head of marketing, and 40000
he might check his purchase order and toss the sticker
30000
price at you. Ask the CIO, and he might add a few grand to
20000
the purchase price to account for technical and help desk
support. Ask a user, and she might point out that the 10000
biggest cost is the time she wastes cajoling it to do what 0
she wants. But here’s the scary part: The only thing 1987 1996 2000
business executives know for sure is the price keeps going
up. Figure 1: five-year TCO
"The fear a lot of CEOs have is that information
technology [IT] costs1 are growing out of control without anybody being aware of
them" (Bill Kirwin, Gartner Group Inc.’s, Oct. 1997)

1.3 Objectives
Much has been written about what is wrong with data processing today. There are
backlogs of several years. It takes too long to build systems, and the cost is too high.
The difficulties of maintenance are outrageous. Management cannot obtain
information from computers when needed. Many programs are fragile spaghetti code.
Problems in data processing prevent the rapid introduction of new business
procedures.2

1
Gartner Group's Personal Computing Policies and Strategies Research Note SPA-140-22, April 26, 1996
2
James Martin, Information engineering: a trilogy, Book 1, Prentice Hall New Jersey 1989
1. Introduction Total Cost of Ownership Analysis
1.4 The TCO-Model Side 4 of 1

Today, computers are assuming more important roles in business, governments and
the military. We have entered the age when computing and information systems are
strategic weapons, not a backroom overhead. The term mission critical3 system and
strategic system have become popular. There are many examples of corporations s
growing faster than their competition because they had better information systems. In
cases, corporations have been put out of business by competition with better
computing recourses.
IT investments, like all business decisions, are based on economic value. Determining
economic value includes weighing at least three factors: economic benefits, risks, and
costs. The benefit and risk factors used to value IT investments vary from firm to firm
and industry to industry. This article focuses on one important part of the overall
value picture: cost.

Total Cost of Ownership (TCO) is a model that helps enterprises understand the direct
and indirect dollar costs associated with owning and using an Information Technology
(IT) component throughout its lifecycle. You can think of TCO as the sum of all the
”little costs” that go into acquiring, installing, managing computers, networks,
applications and End user Cost (EUC). The collection of costs can be partitioned into
a TCO Model and used with a management methodology4 to form a decision support
tool. The combination of a TCO Model with a methodology provides an IS
professional with the understanding of all costs associated with the computer systems,
and a decision making tool on how to best to manage and improve the systems,
delivering more value to the business from the IT investments.

1.4 The TCO-Model

Looking at IT costs using a TCO model acknowledges that the costs of hardware and
software are connected to other costs such as support, training, and downtime. This
thesis tries to explain and make you aware of TCO model that makes the Total Cost of
Ownership more easily measurable and directly usable to create actionable IT
improvement plans.

What is TCO, how can TCO be analyzed?

TCO is a model that helps managers of Enterprise Systems understand and manage
the budgeted (direct) and unbudgeted (indirect) costs incurred in owning and using
an IT component throughout its lifecycle.

Analyzing TCO is always an important step. Even

if the current strategy in your organization is "no
change, no investments," TCO will tend to grow
because external business variables are constantly
changing as you are faced with maintaining an
appropriate level of service. Much has been
written about the rising cost of personal computers
over the past few years. For example, costs have
tripled during the last ten years while the quantity
of information and level of service has increased
exponentially.
Diagram 1: TCO area's
The way that business is performed and the way
people work and interact has also changed
dramatically. Ten years ago, individuals could not create production-level documents
3
To Lower Ownership Costs, Improve Management, by Paul A. Strassmann, Computerworld, July 14, 1997
4
Interpose, Inc./IDC - 1997
1. Introduction Total Cost of Ownership Analysis
1.5 Profit Center approach Side 5 of 1

and presentations, communicate and collaborate electronically, maintain remote office

connections, or most importantly, manage and share information. The objective of any
TCO analysis is to maintain or optimize individual productivity while lowering costs.
Most costs are associated with management and technology support by IS
professionals, and the hidden costs5 of end-users managing and supporting their
own computer systems.
There is a great opportunity through TCO management to understand and reduce
these costs since much of the costs are labor-related -- driven by processes, training,
and tools. Often overlooked when analyzing costs is the fact that as costs go up, there
is a proportional increase in individual productivity and flexibility. Conversely,
reducing too many costs (e.g. training) increases downtime and support calls.

1.5 Profit Center approach

To help organizations identify all the variables connected to the cost of IT systems,
direct and indirect cost classifications are divided into cost categories. Categories are
granular enough to be actionable, i.e. Hardware and Software, Management, Support,
Development, Communications fee, End-user, Downtime6.
These chargeout should lead managers to assist with additional aspect of revenue
decisions about computer use – from a perspective of their own department and the
whole company. An advanced chargeout system, designed to encourage both users
and the providers of computer services to make wise decisions, lays the groundwork
for the smooth operation of IS as a profit center.

1.6 Limitations of TCO

With TCO there is no talk about revenue, it doesn’t talk about the business value and
contribution of IT.
Executives—both IS and financial—who wish to put this tool to work must first figure
out what it can and can’t do. Although TCO analysis is one valuable tool to help keep
IT costs under control, no total cost of ownership model can determine how to use IT
wisely throughout the enterprise. TCO analysis can go awry if not used in balance
with other financial analysis7 models, and experts are quick to point out its
limitations.

1.7 Delimitation to others

TCO
One of the strictest standards for computer display AEF and AMF emission levels in
the world. This standard is also known as TCO.

TOC - Total Ownership Costs

This initiative was intended to introduce economic observations to point out the cost
to own a PC, this did not include any figure for end-user nor downtime cost.

5
Interpose’s TCO Model for Understanding All Information Technology Costs and Benefits, A Technical
White Paper, October 1997
http://www.cio.com/archive/090197_meta.html
6
Cost Of Downtime -- Financial firm saves by tracking system disruptions and non-productive use
May 12, 1997, Issue: 630, Section: IT Management,
http://www.techweb.com/se/directlink.cgi?IWK19970512S0070
7
How to set up your own ownership model, Bill Kirwin, Gartner Group Inc., CIO Magazine - Enterprise -
October 15, 1997
2. Analyzing areas of costs -- Budgeted (Direct) Costs Total Cost of Ownership Analysis
2.1 Definitions of Budgeted (Direct) Costs Side 6 of 1

2. Analyzing areas of costs -- Budgeted (Direct) Costs8

Direct costs can be obtained through analysis of typical IS budgets. But, upon initiating a
TCO assessment in an organization, the first realization is that organizations often do not
have a clear understanding of their total budgets. Most organizations do not track IS costs
accurately, lacking detailed information on asset location, total head count, and labor
expenditures. A well-defined TCO model helps avoid these shortcomings.

2.1 Definitions of Budgeted (Direct) Costs

Direct or budget costs can be obtained through analysis of typical IS budgets. But,
upon initiating a TCO assessment of an organization, the first realization is that
organizations often do not have a handle on their total budgets. Most organizations do
not track IS costs accurately because they often do not know how many assets they
have and their location, do not know total headcount or where labor is being
expended. All of this information can be discovered through a little research and an
organizational framework provided by the TCO Model on where to locate and record
relevant costs. The TCO Model and associated TCO Lifecycle cost management
methodology provides a framework to investigate total direct costs and document
them in one place.

2.2 Hardware and Software

The minicomputer investment cycle9 inaugurated the proliferation of computing
capacity. It initiated the shift from disciplined mainframe computing to improvised
computing whenever people could afford to purchase their own equipment.

Hardware and Software Costs are the annual capital expenditures associated with PC
and network hardware and software. Included are the acquisition fees (depreciated
over three years using straight-line depreciation), upgrade, update, and disposal fees
for the assets. Assets include PCs, laptops, servers, peripherals, hubs, bridges, routers,
switches, printers, scanners, and network wiring.

Cost Sub-Category Definition

Hardware Costs Annual expenditures on new and upgraded client,

server, and network hardware.
Acquisition10 and Disposal The annual capital expenditures associated with the
acquisition and disposal of computers, peripherals
(printers and scanners), and network hardware (hubs,
bridges, routers, and switches). The acquisition fees for
clients and servers include initial computer, memory,
storage, and applications. As well, a fee is included for
asset disposal fees Acquisition costs are amortized over a
three year based on the original purchase price. For a
benchmark analysis, all of the assets are assumed to be

8
To Cut Costs, Find the Costliest Users, by Paul A. Strassmann, Computerworld, December 8, 1997
9
The Squandered Computer, Evaluating the Business Alignment of Information Technologies, by Paul A.
Strassmann
10
Operations Is Mostly About Managing Change, June 25, 1997
2. Analyzing areas of costs -- Budgeted (Direct) Costs Total Cost of Ownership Analysis
2.2 Hardware and Software Side 7 of 1

replaced on a three year basis, meaning that each asset

has an acquisition cost equivalent to 1/3 of the original
acquisition cost. When calculating the baseline (actual
costs), the analysis should include a single year’s worth
of depreciation expenses for all assets that are currently
not fully depreciated. The depreciation fees are recorded
using a three year straight line depreciation.
New assets (purchased within the analysis year) should
utilize a full year of depreciation expense regardless of
when the asset was brought into service. Assets that are
currently fully depreciated should be included in the
analysis of total assets for total cost analysis, but, for the
baseline, analysis will not have any costs indicated in
acquisition costs because they are fully depreciated.
Thus, if assets are in service longer than three years, the
organization will have acquisition costs lower than the
industry average benchmark figures (although other costs
such as upgrades and repairs may be higher).
Lease fees are not included in the acquisition expenses
and are handled in another category (lease fees) below.
Memory The annual capital expenditures for upgrades to
computer memory. The memory upgrades are expensed.
Storage The annual capital expenditures for upgrades to
computer hard disks and other on-line network storage
devices. The storage expenses are expensed.
Peripheral Upgrades The annual capital expenditures for computer peripheral
device updates and upgrades including adding a CD-
ROM drive to a computer, multimedia accessories, and
printer memory. The peripheral upgrades are expensed.
Connectivity Hardware11
Upgrades The annual capital expenditures for upgrading and
updating network hardware including such items as
network cabling network cards, and adding ports to
routers. The connectivity hardware upgrades are
expensed.
Other Hardware The annual capital expenditures for spares. This fee is
expensed.
Software Costs12 Annual capital expenditures on new and upgraded
client and server software. Software is expensed in
the year the analysis is being performed.
Maintenance contracts are not included.
Operating System The annual capital expenditures on new and upgraded
operating system licenses for the desktop and servers.
Application Software The annual capital expenditures for new and upgraded
off-the-shelf applications including word processors,
databases, spreadsheets, financial, accounting,
manufacturing, CAD/CAM, presentation, contact

11
Network management, CIO Magazine - June 1, 1997
12
IT asset management, Asset Appreciation, CIO Magazine, September 15, 1995
2. Analyzing areas of costs -- Budgeted (Direct) Costs Total Cost of Ownership Analysis
2.3 Management Side 8 of 1

management, vertical applications, and other business

software. Included are expenses for development tools.
Software fees are expensed.
Utility Software The annual capital expenditures on new and upgraded
software used to help manage the desktops or network
including network and systems management software,
security, virus protection, backup and restore, disk
optimization, performance tuning, screen savers, and
other helpful tools. Also included in utility software are
programming languages, program components, modeling
software, test tools, configuration control programs, and
documentation tools.
Connectivity and
Communication Software The annual capital expenditures on new and upgraded
software used to connect users and to enable sharing of
information across the network, beyond what is included
in the operating system. Such software includes
messaging software and remote connectivity software.
Monthly Costs Monthly capital and lease expenses for hardware,
software, and supplies
Leased asset fees The annualized lease fees for all assets including
hardware such as servers, clients, printers, hubs, bridges,
routers, and switches, as well as leased software.
Other monthly costs The annualized capital fees for computer supplies such
as diskettes, CD-ROM's, backup tapes, toner cartridges
and other expendable.

2.3 Management
As departments where building and managing there own environment. As during the
past years systems inter-connectivity were established suddenly, there was the need to
pinpoint bottlenecks or track down hardware troubles amidst the labyrinth of servers,
clients, routers, cable and middleware is a challenge not for the faint of heart.
There where often sophisticated documentation13 or standards available from this
different departments.14
According to Janet Butler the average Fortune Service 500 company planned to invest
$1.7Mio. in networking in 1994 or more than twice $737,000 reserved by the average
Fortune Industrial 500 company.15

The communication revolution promise of "anytime, anywhere" presents a distinct

problem for network managers. The problem is that users will begin expecting ,
indeed demanding, services that cannot yet be delivered.

Management is the IS direct labor expenses and outsourced fees of managing the
network, computer systems, applications, and storage infrastructure, as well as

13
Capers Jones, The Year 2000 Software Problem
14
Janet Butler, Enterprisewide Network Management, Computer Technology Research Corp., 1995
15
Enterprisewide Network Management, side 153
2. Analyzing areas of costs -- Budgeted (Direct) Costs Total Cost of Ownership Analysis
2.3 Management Side 9 of 1

managing the users ability to access these resources. The successful management of
the infrastructure forms the basis for a solid business computing platform.
Management expenses are derived from the labor expenses of network and desktop
administrators, as well as network management outsourcing fees. Expenses are the
annual labor fees (headcount performing the task * rate) for the analysis year.

Cost Sub-Category Definition

Network Management16 The annual labor expenses for maintaining and
optimizing availability of key network resources to
users. These resources include access to the systems,
network, communications, information management
and sharing, as well as printing. Tasks in this
category include advanced support services,
optimization, and administration.
Troubleshooting17 and repair
(Tier III support) The annual labor expenses for technicians and
administrators in identifying and resolving failure, fault,
and accessibility support issues with the network,
computers, operating systems and applications. Includes
break-fix labor expenses.
Traffic management and
planning The annual labor expenses for pro-actively monitoring,
interpreting, planning and balancing18 the load placed on
the network infrastructure.
Performance tuning The annual labor expenses for pro-actively monitoring,
interpreting, planning and balancing the performance of
networked systems and applications.
User administration (adds, moves, and
changes to users) The annual labor expenses for controlling user
accessibility and restriction to network and application
resources. Tasks include adding new users and resources,
moving users to new groups, or changing user profiles.
Operating system support The annual labor expended in managing the operating
system including settings, drivers, and licensing.
Maintenance labor The annual labor19 expended for routine tasks that are
performed on a scheduled or interval basis to maintain
accessibility and performance. This can include tasks
such as routine cycling of applications, maintaining
expired passwords, and deletion of e-mail logs. File and
disk maintenance is not included.
Tier II support labor The annual labor expenses for resolving issues with
systems, networks, and applications that could not be
resolved by help desk tier I personnel, and are not yet
ready to be escalated to Tier III support personnel. The

16
Gartner group Inc., Operations Is Mostly About Managing Change, June 25, 1997
17
Jeff Bliss Systems management made easier, TechWeb, November 10, 1997, Issue: 762
18
Gartner Group., Enterprise Planning Reduces IT Unit Cost by 75 Percent, October 28, 1997
19
Paul A. Strassmann, Information Productivity, Strassmann Inc. 1997
2. Analyzing areas of costs -- Budgeted (Direct) Costs Total Cost of Ownership Analysis
2.3 Management Side 10 of 1

Tier II resources are utilized when calls cannot be

resolved through standard solutions, require a greater in-
depth knowledge of the systems, or require dispatch to
the desktop or problem causing asset.
Systems Management The annual labor expenses for managing the physical
computer systems, applications, and network. Tasks
include evaluation, deployment, and on-going
management.
Systems research and
planning The annual labor expenses for identifying infrastructure
needs, reviewing configurations, setting standards,
researching options, as well as identifying and
documenting planned changes. Expenditures are for
servers, clients, networks, and off-the-shelf applications.
Evaluation and purchase The annual labor expenses for testing servers, clients,
networks, applications, and systems prior to rollout, and
the direct IS labor associated in supporting procurement
efforts, including the support of legal and purchasing
departments.
Software licensing20 and
distribution The annual labor expenses for deploying new software,
updating and upgrading existing applications and
operating systems, monitoring usage and the metering of
available licenses
Asset management The annual labor expenses for inventories, asset
identification and tracking, asset database management,
change recording, and reconciliation, as well as
managing automated asset management systems.
Application management The annual labor expenses for on-going management of
applications including configuration control, access
management, and launch.
Security and
virus protection The annual labor expenses for detecting or preventing
security violations or virus infection, and the recovery
from such violations or intrusions.
Hardware Configuration21/Re-configuration (adds, moves,
changes to assets) The annual labor expenses for re-configuring existing
solutions within the network including adding sub-
components, upgrades, physical moves or configuration
changes. Items include system upgrades, performance
enhancements, topology changes, switched network
changes, asset location, and other physical or logical
changes and setups to the hardware and settings.
Software upgrades to applications and operating systems
are not accounted for here, instead they are recorded in
Software licensing and distribution.

20
CIO Magazin, IT Costs, PC LAN Costs JUNE 15, 1996
21
J. Golterman, Gartner group Inc., Sales Leadership Strategies (SLS), September 26, 1997
2. Analyzing areas of costs -- Budgeted (Direct) Costs Total Cost of Ownership Analysis
2.4 Support Side 11 of 1

Hardware Installation
Storage Management22
Disk and file management
Storage capacity planning
Data access management
Backup and archiving
Disaster planning and recovery
preparedness plans including backup and restore
procedures, tape management plans, hot-site planning
and preparation, record keeping, and team organization
Repository management
Outsourced
Management Fees
The annual labor expenses for installing and deploying
new hardware including servers, clients, peripherals,
communication devices, and networks. As part of the
installation, it is assumed that the replaced assets are
disposed of using labor accounted for in this category.
The annual labor expenses for managing the desktop
and network data and storage including file system
organization, database management, local hard disks,
server hard disks, centralized on-line storage devices,
optical storage, hierarchical storage management
systems, archiving and backup/restore systems. Only
client/server storage management costs should be
considered.
The annual labor expenses for optimizing hard disk
storage and file systems. Expenses include management
of directory trees, disk de-fragmentation, and disk
maintenance.
The annual labor expenses for monitoring, managing,
and optimizing on-line and off-line storage.
The annual labor expenses for providing user availability
to information including in-scope database management,
file access, and remote server access.
The annual labor expenses for the backup of network and
desktop data, restoring lost files or disks, and the
archiving of data to tape.
The annual labor expenses for building disaster
The allocated annual labor expenses for managing the
central disk or tape repository.
The annual fees associated with outsourcing23 any of
the Management labor costs. The outsourced
categories typically include planning, installation
(migration rollouts), Tier II support, inventory, asset
management24, repository management.

2.4 Support
Support costs are the direct labor expenses (IS, end-user, and procurement) and fees
associated with supporting the network infrastructure and users. Labor and fees
include help desk support (tier I), maintenance and support contracts, training, travel,

22
Gartner Group Inc., Enterprise Planning Reduces IT Unit Cost by 75 Percent, October 28, 1997
23
Strassmann, The Real Problem with Computers, Harvard Business Review, September-October 1997
24
Caryn Gillooly, Return On Assets -- Asset-management software can cut your total cost of ownership. It
can also boost your speed and sharpen your customer focus, TechWeb, December 08, 1997, Issue: 660
CIO Magazine, IT ASSET MANAGEMENT, September 15, 1995 September 15, 1995
2. Analyzing areas of costs -- Budgeted (Direct) Costs Total Cost of Ownership Analysis
2.4 Support Side 12 of 1

purchasing, vendor management, and management overhead. Support costs are annual
labor expenses and fees for the year the analysis was performed.

It is important to collect as much information as possible about how things relating to

the support mission are currently being done. In the early stages, keep in mind that
one of the key issues is whether the benefits of creating the new, formal support are
worth the costs. To answer that question, it is critical to look at the cost of the
informal system.
Without an existing help desk, it may be difficult to develop a mechanism for
collecting this information. Consider talking to users to get their perceptions,
expectations, and preferences of help-desk services as well as collecting information
from company management and, if one exists, the Information Services or
Information Technology department.
It is also important to gather information about what technology is being used and
how that technology is being applied. A company where the users actually program
within a variety of applications may require a very different help-desk model than one
where the word processor has only begun to replace the typewriter.

Cost Sub-Category Definition

Operations Labor25 The annual expenses for the overhead labor
associated with running a computer and network
infrastructure.
Administration The annual labor expenses for clerks and assistants that
support administrative staff, support staff, IS department
and general managers, as well as IS executives.
Management The annual labor expenses for IS department, general,
and executive management.
Casual Learning26 (IT) The annual labor expenses by IS professionals outside of
formal training programs to learn computer, network, and
storage systems, as well as IS and end-user applications.
Vendor Management The annual labor expenses for working with and
managing hardware and software vendors.
Misdiagnosis The annual IS labor expenses for IS resources spending
support time on issues that were user error, not real
faults.
Training Course
Development The annual labor expenses for designing, developing, and
testing IS and end user courseware.
IS Training
(delivery and time) The annual labor expenses for delivering IS courses, as
well as the IS time spent attending courses.
End User Training
(delivery) The annual labor expenses for the delivery of training
courses to end users on infrastructure systems and
applications.

25
Paul Strassmann's, The Squandered Computer, Will big spending on computers guarantee profitability?
26
D. Cappuccio, W. Kirwin, L. Pawlick, Total Cost of Ownership: Reducing PC/LAN Costs in the
Enterprise, Managing Distributed Computing (MDC), Gartner Group Inc., February 9, 1996
2. Analyzing areas of costs -- Budgeted (Direct) Costs Total Cost of Ownership Analysis
2.4 Support Side 13 of 1

End User Training The annual labor expenses for the time spent by end-
users in infrastructure systems and application training.
Travel Time The annual labor expenses by IS professionals in travel
time to support remote/branch offices, attend training
sessions, attend trade shows, and visit vendors.
Purchasing The annual labor expenses by purchasing and legal in
planning, supporting, and implementing computer
systems, network, and applications purchases including
the negotiation of contracts, site licenses, and individual
acquisitions.
Other Operations
Labor Costs Annual labor expenses for miscellaneous overhead items
such as user group or IS newsletter production.
Operations Fees The annual fees for operations such as maintenance
and support contracts, travel, and training.
Maintenance contracts The annual fees for outsourced maintenance (break-fix)
contracts. When calculating actual costs, organizations
that pay for these fees on a one time basis for multiple
years should only account for the allocation of costs in
the analysis year.
Support contracts The annual fees for outsourced Tier I help desk support
services.
Training Course/
Certification Fees The annual fees for training class and supply fees,
certifications, testing fees, and courseware.
Travel The annual fees for airfare and other transportation
related to in-scope IS business travel.
Purchasing The annual allocated charge-back fees paid to purchasing
or legal departments for in-scope IS purchases.
Other Operations Fees Annual fees for overhead items such as user group or IS
newsletter production.
2. Analyzing areas of costs -- Budgeted (Direct) Costs Total Cost of Ownership Analysis
2.5 Development Side 14 of 1

Help Desk27 (Tier I support)

Labor Costs The annual labor expenses for Tier I help desk
support calls. For benchmark analysis, the cost
information is based on the activity based cost of
supporting the client/server environment (calls per
year for all assets * avg. call duration * burdened
labor rate).For baseline analysis, the cost information
is activity based, but may be collected based on
headcount (usually when the Tier I for client/server
infrastructure is easily separated from out-of-scope
systems), or on call analysis (when support resources
hold multiple support roles)

2.5 Development
Unfortunately, many products still come to market with obvious usability
deficiencies. Many of these products are developed with little early consideration for
user interface. Often the most significant attention to product usability comes during
the later part of the software development process, sometimes more as an afterthought
than as a significant planned activity. Not only does it cost more to make coding and
documentation changes later in the cycle, there also is considerable less time to
validate the acceptance of the user interface
Frequently there these developments are not within time finished. So under the
pressure of time to market (TTM), the last phase of development are getting
shortened. So there will be still some major faults left.

Gartner Group28 Inc., Stamford, Conn., estimates that more than 80 percent of the
world's largest companies either will have or will be planning a data warehouse by the
end of the year. Some of those companies are constructing enterprisewide,
multiterabyte data collections, while others are building smaller scale data marts to
meet the needs of individual departments. Almost all will be using the services and
expertise of resellers to help them.

Development costs are the annual IS labor expenses and fees for the design,
development, test, documentation, and maintenance of non-business applications for
the computing system infrastructure. In-scope applications include systems
management programming, and development/customization of communication and
productivity software. Activities and fees in this category are associated with new
applications, integration, customization, and maintenance.
Business applications, those programs that generate, track, field, or manage business
revenue and/or are considered mission critical, are considered out of scope in the
standard costs, and should be considered out of scope in actual costs analysis when
doing comparisons of Benchmarks to Baselines.

Cost Sub-Category Definition

Development Labor The annual labor for the design, development,

documentation, test, and maintenance of non-business
applications.

27
Gartner Group's Software Asset Management, Lowering Help Desk Costs With LAN-Based Inventory
Tools, Research Note KA-AMT-426, August 22, 1997.
28
Gartner Interactive Home, http://gartner12.gartnerweb.com
2. Analyzing areas of costs -- Budgeted (Direct) Costs Total Cost of Ownership Analysis
2.6 Communications fee Side 15 of 1

Design and development The annual labor for requirement definition, architecture
development, planning, prototyping, and coding of non-
business applications.

Testing The annual labor for developing or planning test tools,

developing test plans, managing test lab creation and
maintenance, testing, and documenting issues.

Documentation29 The annual labor for configuration control and technical

writer documentation of non-business applications.

Development Fees The annual fees paid to outside service providers and
consultants for the design, development,
documentation, test, and maintenance of non-business
applications.

Design and development The annual fees for requirement definition, architecture
development, planning, prototyping, and coding of non-
business applications.

Testing The annual fees for developing or planning test tools,

developing test plans, managing test lab creation and
maintenance, testing, and documenting issues.

Documentation The annual fees for configuration control and technical

writer documentation of non-business applications.

2.6 Communications fee

Network computing puts the network at the center of a simplified universe. Rather
than rely on thousands of variously configured individual desktop PCs, management,
maintenance and upgrades occur centrally through the network and servers.

The communications fees are the annual expenses paid for lease lines, on-line access
fees, remote access services, and WEB hosting fees. Fees are assessed for
client/server functions only. Data center fees for communications should be allocated
accordingly.
Cost Sub-Category Definition

Communication Fees The total of annual expenses for lease line fees, on-line
access fees, remote access services, and WEB hosting
fees.

29
CIO, New Year's Evil, Column - Jan. 1, 1996.
3. Analyzing areas of costs -- Unbudgeted (Indirect) Costs Total Cost of Ownership Analysis
3.1 Definitions of Unbudgeted (Indirect) Costs Side 16 of 1

3. Analyzing areas of costs -- Unbudgeted (Indirect) Costs

3.1 Definitions of Unbudgeted (Indirect) Costs

Costs generated by end-users providing IS support to themselves and their peers, so-
called indirect costs, are rarely measured by IS organizations. But it is the indirect
costs that can grow unchecked as IS budgets are slashed and the burden of IT support
is shifted directly to end-users.
According to the Interpose research, the average organization has more than 50
percent of total IT costs allocated to indirect expenses. Most alarming is that over the
past ten years these costs have tripled, and the majority of cost growth has been
outside of traditional IS budgets. Indirect costs are harder to quantify for most
organizations. Costs can be estimated by reviewing help desk records to determine
downtime and by surveying users to determine where they go for support (help desk
or peers) and self-support time. The TCO model and associated TCO lifecycle cost
management methodology assist in organizing research and quantifying indirect costs.

To define the TCO model further, the direct and indirect cost classifications are
divided into cost categories. These are defined to easily capture costs so that research
can be performed on the industry average cost of ownership, and individual
organizations can research and record costs easily. It is also important to develop a
model where cost categories and sub-categories are granular enough to be actionable,
i.e. Products, best practices, or training can be applied against the categories and the
impact can be measured.

3.2 End-user costs

Top management only began to inquire about the full life-cycle cost of computing
when they recognized that computer ownership increasingly includes costs that show
up only in the users' operations. Today, user-incurred costs such as "futzing"30
(wasting time on PCs), improvised learning, assistance from fellow employees and
end-user attempts to become computer experts are showing up in the TOC estimates
published by consultants and vendors. This indirect expense is often hidden and is an
indirect expense to IS. The responsibility and hours in performing these tasks is
sometimes borne by end users by design, where certain end users are designated with
IS functions to better support business units and remote offices. At other times the
expenses are the result of budget cuts to IS resulting in transitions of labor costs from
traditional IS personnel to the end users. In either case, a study of the total cost of
ownership must include the IS labor expenses that are being performed by end users.
Such costs typically include tier II support, maintenance, troubleshooting and repair,
installation, training, backup, and certain development functions (non-business or
mission critical).
When investigating the End User IS expenses for a TCO Baseline (actual cost) data
collection, end user surveys are used. In these surveys, end users are asked to provide
information on where they obtain IS services, and how much they perform themselves
or for others. As well, IS management is queried to determine how much ”official”
support is provided by end users to support business units, mobile workers, and
remote/branch offices, common areas where end user IS expenditures are high.

Cost Sub-Category Definition

30
Further information in the appendix
3. Analyzing areas of costs -- Unbudgeted (Indirect) Costs Total Cost of Ownership Analysis
3.3 Downtime Side 17 of 1

Peer and Self Support
The annual labor expenses of end users supporting
themselves and each other in lieu of obtaining support
from the help desk or IS personnel. Typical tasks
performed by the end users include troubleshooting and
repair, support, maintenance, installation, training, and
backup management (remote offices). Self support is
performed by the users themselves. Peer support is the
reliance on a knowledgeable resource, typically the
unofficial ”expert” in providing support answers and in
resolving technical issues.

Casual Learning (end user) The annual labor expenses of end users training
themselves in lieu of traditional and formal training
programs.

”Futz” Factor The annual labor expenses of end users performing

unnecessary changes to their computer, network settings,
or applications including playing with screen settings,
file organization, folders, sounds, printer settings, and
other unproductive configuration/re-configuration. Futz
does not include playing of games or surfing the Internet.
This time is not included in the average or actual cost
studies.

End user scripting and

development The annual labor expense of end users performing
development and customization of non business/mission
critical applications (infrastructure software)

3.3 Downtime31
Downtime expenses are the annual lost productivity costs to end users of downtime,
the unavailability of computing services and resources including desktop computers,
servers, printers, network, applications, and communications. Downtime can be due to
a user waiting for productivity impacting help desk problem to be resolved, or from an
infrastructure issue due to planned maintenance or unplanned failures.
Productivity losses are considered in the total cost of ownership model to measure and
track downtime impacts on the end user community, providing a measuring stick for
reliability and fault tolerance. Business losses are important to consider but not
measured in this model because business impacts and applications are out of scope.

Cost Sub-Category Definition

Planned downtime lost

productivity The annual productivity loss impact to end users from
planned system maintenance. This cost can be high for
organizations who are 24x7 and who have systems that
require productivity impacting enhancements to the
servers, architecture, and desktops, or who have

31
Paul A. Strassmann, To Lower Ownership Costs, Improve Management, Computerworld, July 14, 1997
3. Analyzing areas of costs -- Unbudgeted (Indirect) Costs Total Cost of Ownership Analysis
3.3 Downtime Side 18 of 1

maintenance issues with the central resources and

applications. For actual cost analysis, the planned
network outages are estimated by IS professionals.

Unplanned downtime lost

productivity The annual productivity loss impact to end users from
unplanned outages of the network resources, including
shared servers, printers, applications, communication
resources, and connectivity. For actual cost analysis, the
unplanned network outages are estimated by IS
professionals.

Lost productivity due to

help desk resolution time
The annual productivity loss impact to end users from
the wait time involved in getting support issues handled,
from the call placement to problem resolution and
restored productivity. When researching actual costs, it is
important that only productivity impacting problems are
recorded, and problems spanning non-working hours
consider only those hours that effect productivity.
Consideration on scaling may be considered for
professionals who often work unpaid hours to make up
for unproductive hours due to desktop or network
problems.
For actual cost analysis, it is important to separate
desktop resolution downtime from network downtime to
avoid double counting of productivity losses.
4. Conclusion Total Cost of Ownership Analysis
4.1 Is There a Productivity Paradox? Side 19 of 1

4. Conclusion
Neither client/server, the Internet nor computer networks have so far materially improved
the productivity of information handling by the premier U.S. industrial corporations. In 1996
$1,109 billions in cost of goods required the support from $301 billions in information
management. In 1996 $207 billions of revenue of US banks consumed $75 billions in non-
interest expense and $39 billions of staff costs.

These ratios are now lower than they were in the period from 1987 through 1993. I consider
these declining ratios as proof that productivity of the information handling workforce,
which now accounts for 59% of US total employment, has worsened in the last decade, not
improved.

The time has come to face up to the facts: the stock-market analysts and the over- optimistic
CEOs are misled. It's a myth that computers have measurably increased overall US
productivity of information. Whatever productivity gains may have happened to increase
profits took place in the factories and the warehouses. Such realization will lead to placing
IT expenses under much closer financial scrutiny to make sure that costs are not only
contained, but that the computerized work creates an innovative stream of new profits.

Whatever productivity gains may have been achieved through computerization of office
work in the last decade have been squandered by the profligate waste of human and
technological resources. The bureaucratization and complexity of business processes have
indeed increased, thereby creating the demand for more information processing to get
anything accomplished. However, increased amounts of unnecessary work does not create
wealth, whether done faster than before or not. If prosperity is to continue, we need to fulfill
the promise of the Information Age. We must deploy IT so the workforce can consistently
deliver more value with less effort.

4.1 Is There a Productivity Paradox?

The term "paradox" is used when reasoned acts deliver results which are counter to
expectations. I think that therein lies the fallacy, and perhaps arrogance, of thinking
about computers as a paradoxical phenomenon. Computers are indeed a miraculous
technology. Therefore, management has been led to expect delivery of fantastic gains
in productivity. The press, the vendors and the consultants have reinforced such
convictions.

The facts are that:

• There is no correlation between computer spending and profitability;
• There is no evidence that during the last decade the productivity of information
work in the US has improved. I have assembled in this chapter some contrary
evidence.

It is not helpful to keep talking about the persistence of a "productivity paradox" as an

unfulfilled dream. It is even less constructive to wish the entire problem to disappear
by arguing that the productivity gains exist, if we only knew how to measure them.
Time has come to face up to the evidence that often computer productivity is not a
mythical, intangible benefit but more often than not a productivity detractor. That
means placing I.T. expenses under a close financial scrutiny to make sure that costs
are not only contained, but that the computerized work creates an innovative stream of
new profits.
4. Conclusion Total Cost of Ownership Analysis
4.2 IT Remedies Side 20 of 1

Whatever productivity gains in the application of information may have been

achieved through computerization in the last decade must have been squandered by
the rising bureaucratization of the US organizations and the profligate waste of
resources - human as well as technological. If prosperity is to continue, as the
optimists hope, we need to take advantage of what is the promise of the information
age. We must deploy information technologies to create a sustained ability of the
information workforce to manage the delivery of more valuable results with less
effort.

4.2 IT Remedies
Information costs have been rising relative to other production costs, not declining. In
accounting terms this means that hard-to-control and largely fixed overhead costs
have been displacing variable direct costs. The impacts on planning, budgeting and
controlling of information technologies are far reaching. The pressure to reduce fixed
overhead costs will mount, especially during a downside swing of an economic cycle.
The likely managerial countermeasures will be: increase outsourcing of information
services; license software based on usage and shift computing to where capacity
utilization can take advantage of economies of scale.

Within ten years the structure of the existing corporate information technology
budgets will see radical changes. The enormous fixed cost of computing assets
configured to meet local peak loads will be replaced by computing-on-demand from
commercial utilities. Company-specific networks will be phased out in favor of
carriers that will auction off bandwidth based on real-time demands for capacity.
Custom-made applications requiring huge support staffs will be phased out in favor of
systems configured out of standard functional modules and billed in microtransaction
units. Computing will cease to be a firm-level cottage industry aspiring to self-
sufficiency. Computing services will become a globally traded commodity.

In the case of industrialization, the evolution from local guild-like monopolies to

globally traded markets took over three hundred years and is right now in its final
phase of historical development. In the case of the information economy, the
evolution from local guild-like monopolies has just begun. However, the evolutionary
pace will be much swifter because telecommunications technology now makes it
possible to bypass the local institutional barrier to progress by offering instant cost
reductions. With little effort the customer can reap the benefits of obtaining a global
marginal price instead of having to pay for all of the local fixed costs.

The acceleration in the acceptance of global trading in computerized services also

enjoys unique advantages which the marketing in industrial goods could never realize.
Network-based trades of information services can approach the conditions of "perfect
competition" as closely as a classical economist could conceive. The variable
transaction cost of any network services is extremely low, which means that price can
be set by real-time bidding. The buyers can acquire perfect information about what
they are purchasing, since the cost of trying out a service is trivial. The costs for each
transaction are also very low because the metering and billing can be totally
automated for less than a few microcents per event. No intermediaries are needed to
assure global market access by buyers to sellers or vice versa, which eliminates most
of the overhead expenses for brokers, wholesalers, insurers, bankers, customs officials
and legions of purchasing agents who have always acted as a brake on trade. If
endowed with a sufficiently intelligent electronic device, any consumer of services
can connect directly to any supplier of services, anywhere, anytime.
4. Conclusion Total Cost of Ownership Analysis
4.2 IT Remedies Side 21 of 1

When the new evolutionary changes in the conduct of information management will
materialize, we will be able to observe and measure the long heralded rise in the
productivity of the information resources. It will finally take less information inputs to
deliver more and better goods and services outputs.
5. Appendix Total Cost of Ownership Analysis
5.1 Glossary - By Category Side 22 of 1

5. Appendix

5.1 Glossary - By Category32

Capital: Money used to purchase/lease/rent hardware and license software to perform
activities such as end-user computing, LAN connectivity, and client/server
deployment.
Supplies: This line item covers consumables such as diskettes, paper and printer
ribbons or cartridges.
Total Cost of Ownership: The sum of all hard, soft and hidden costs related to a
particular activity such as end-user computing, LAN connectivity, and client/server
deployment, measured or estimated over a period of time (we use five years).
Administration: Tasks associated with security, auditability, control and legal
compliance of an activity such as end-user computing, and LAN connectivity. These
include:
Asset Management: The practice of managing enterprise assets through the life cycle
of procurement, deployment, upgrade and disposition.
Formal Audit: Compliance review following established EDP audit practice.
Legal: Review and position statement on contractual affairs, such as license
agreements, service contracts, and lease terms and conditions.
Policy and Procedure Enforcement: Management action to facilitate the above
administrative functions.
Purchasing: The procurement process, negotiation, terms and conditions, and order
preparation.
Security: Protection and risk management of physical, logical and intellectual
property.
End-User Operations: The time spent by end users on the non-job-related PC
activities that are necessary due to the presence of PCs. In essence, end users have had
"data center manager" added to their job descriptions because the typical organization
has starved official technical-support head count or has not invested in labor-saving
technical-support and administration tools - or both. While this component of the total
cost of ownership model looks at end-user costs, it does not measure end-user
productivity.
Applications Development: Because of IS head-count constraints, end users are
required to shoulder more of the "applications development" burden for report
generation, data analysis and work-group/departmental systems. Development tools
can be spreadsheet macros, Lotus Notes, PC databases (like Paradox) or programming
languages (like Visual Basic).
Casual Learning: The effort end users make to know more about a function they are
using at the point in time they are trying to use that function is called "casual
learning." Traditional tools for casual learning include reading manuals, information
from coworkers, using a systems' help screen (e.g., the information that comes up in a
box when the F1 key is pressed on a Windows PC) and utilizing trial-and-error
experimentation. Advanced casual learning uses hypertext-based and multimedia-

32
Gartner Group Inc., Managing Distributed Computing (MDC), Strategic Analysis Report, D. Cappuccio,
W. Kirwin, L. Pawlick MDC: R-TCO-104, February 9, 1996
5. Appendix Total Cost of Ownership Analysis
5.1 Glossary - By Category Side 23 of 1

based just-in-time training tools (see PCPS Research Note G-613-04, Dec. 4, 1992).
Casual learning can have a higher knowledge retention rate because it occurs in
smaller portions (one function at a time), at the highest point of motivation (when the
user wants to use a function) and in the best setting (when end users are sitting at their
own PCs).
File Management: "File management" consists of any manipulation of files,
including printing, copying, finding, archiving, backing up, deleting and opening.
Because backing up data is rarely done, "backing up" is really "data re-creation." A
1992 study by the 3M Corp. indicated that 24 million work days per year are wasted
in the United States trying to re-create data that was not backed up. Studies by both
Microsoft.'s and Apple's Usability Labs indicate that a significant amount of time is
spent on simple tasks like trying to locate the correct file to open.
Formal Learning: "Formal learning" occurs when an end user has to go to a
classroom for lectures, or to a learning lab for video-based or computer-based
training. Retention is typically low, as low as 10 percent after 30 days. While this
model assumes a certain level of formal learning for all end users, typically only 40
percent of the end users who should receive formal training actually participate.
"Futz" Factor: Futz is a Yiddish word for wasting time and, in this context, refers to
spending an excessive amount of time on cosmetic changes to documents or the PC
environment, or using the PC for personal activities. Examples of cosmetic activities
include using so many fonts in a document that it looks like a ransom note, spending
time on getting the colors "just right" in a graphic that will be printed on a black and
white printer, or fine-tuning a screen saver. Examples of personal uses include playing
games, word-processing personal correspondence, tracking the kid's soccer statistics
or chatting about personal matters using E-mail.
Peer Support: Technical support provided by end users outside of the official
technical-support framework is considered "peer support." The key here is "official
framework," since end-user-based resources can be part of the official technical-
support organization. There are two types of "peer support," encouraged and informal.
Encouraged peer support occurs when an end-user department has decided to let
certain knowledgeable workers help their coworkers. Informal peer support is what
we call "Hey, Joe!" support, where an end user will turn to the closest coworker and
ask for help. "Hey, Joe!" support is especially expensive because if "Joe" does not
know the answer immediately, other coworkers could be drawn into the discussion
with the end result that three or four people will be unproductive for a half hour when
a two-minute call to the help desk could have solved the problem.
Technical Support: Tasks associated with official provision of support services, as
delivered by personnel paid to provide such services, for an activity such as end-user
computing or LAN connectivity.
Application Consulting: As end users assume more day-to-day report generation and
data analysis tasks, IS provides an "application consulting" service to end users on
which tool to use for a particular task, how to access (or set up access to, see "Data
Extract") required data and task-oriented assistance on the use of a tool. Application
consulting typically occurs one-on-one, at the help desk, applications lab or end user's
desk.
Configuration Review: IS performs a "configuration review" to ensure that new PCs
meet future technical and cost requirements. The configuration review also analyzes
the existing asset base to ensure that planned IT initiatives will not be inhibited by
already deployed assets.
5. Appendix Total Cost of Ownership Analysis
5.1 Glossary - By Category Side 24 of 1

Data Extract: To prevent end users from creating individual versions of corporate
data, IS does a "data extract" to take data from enterprise data warehouses, de-
normalize it, store it on a workgroup data server (e.g., an Oracle database
management system on a Windows NT server attached to a NetWare LAN) and
periodically refresh it.
Documentation: Originally, "documentation" referred to writing paper-based
manuals for internal applications or policies and procedures. With the advent of just-
in-time training technology, documentation now includes the development of
embedded, hypertext/multimedia-based, real-time help systems that cover internal
applications.
Installation, Moves and Changes: assembly, delivery, hook-up and subsequent
upgrades, swaps, service calls and transfers.
Newsletter and User Group: "Newsletters" and "user groups" are used for end-user
continuing education on computer tools as well as for marketing IS initiatives and
positions.
Planning vs. Utilization Review: "Planning" is for end-user-computing technical-
support organization management as well as for the general PC asset base.
Organization planning includes budgeting, staffing and work-load analysis and
vacation scheduling. General PC planning includes vendor and contract management,
consolidating end-user requests and project planning, and analysis of end-user budget
submissions. "Utilization review" is capacity planning.
Product Introduction: "Product introduction" consists of the planning and execution
of IT products' rollout, new or upgrades.
Product Review: The ongoing analysis of new or upgraded software or hardware
products is the "product review."
Service/PM: "Service/Preventive Maintenance" (service/PM) includes the hardware
break/fix and preventive maintenance services. Hardware installation and
moves/changes are part of the administration cost model. Service/PM is the only
function that is explicitly outsourced.
Standards Development: The development of the end-user-computing IT
architecture, interoperability standards and approved product lists is "standards
development."
Tier 1 Help Desk: The "Tier 1 help desk" is the support hot line, acting as a single
point of contact for all technology-related problems (mainframes to PCs, internal
applications to shrink-wrapped software, telecommunications and LANs, hardware
break/fix and more) and service requests. The Tier 1 help desk is typically a part of
IS, although it can be outsourced.
Tier 1 Support: In some organizations a central help desk is not as efficient as onsite
Tier 1 staff trained "at the business" to do business support. These are typically larger
departments that require onsite support and the effective Tier 1 staff has access to the
same utilities as the Tier 1 help desk referenced above. The difference is that they will
open a trouble ticket in the field (still tied to a central help database) and pass on
unresolved trouble tickets to Tier 2 from their remote sites. From an end-user
perspective, Tier 1 support is similar to Tier 1 help desks in that they still have only
one number to call for all problems, but the difference is that they get focus support
from a business, rather than technical, perspective.
Tier 2 Support: Tier 2 support provides support services beyond the Tier 1 help
desk's mission or capabilities. For example, Tier 2 handles problems requiring greater
5. Appendix Total Cost of Ownership Analysis
5.2 Illustrations Side 25 of 1

depth of knowledge, visits to an end user's desk or longer duration calls. Tier 2 is a
dispatched resource. Tier 2 can reside inside or outside of IS, or even be an
outsourcer.
Tier 3 Support: Tier 3 support is a small cadre of highly trained technicians that are
relied on for the top 5 percent of problems. They also work with the vendors'
technicians and with an internal integration lab. This lab is designed to support the
evaluation, testing, and implementation of all network changes, prior to integration in
the field. These changes include new hardware, software, operating systems, topology
changes and user-developed applications.
Training vs. Learning: "Training" is providing education to end users. This includes
developing course material, reviewing and acquiring teaching tools (e.g., computer-
based training modules), teaching classes and reviewing/managing/training
outsourcers. "Learning" is the work that the technical-support staff must do to keep up
to date or cross-trained. End users also learn, and this is captured in the end-user
operations cost model.
Vendor Liaison: Part of vendor management, "vendor liaison" is the periodic contact
with vendors to review contracts, technical support, product quality and upcoming
product news.

5.2 Illustrations
Figure: five-year TCO.................................................................................................... 3

Diagram: TCO area's 1................................................................................................... 4

5.3 Literature

Brandt Allen, Make Information Services Pay Its Way, Harvard Business Review,
Jan-Feb. 1987
Capers Jones, The Year 2000 Software Problem, Addison-Wesley, December 1997
Carol Hildebrand, The Price Tag, CIO Magazine October 15, 1997
CIO, Chief Information Officer Magazin, www.cio.com
Dave Cappuccio and Bill Kirwin, IT Costs, CIO Magazine June 15, 1996
Gartner Group Inc., Managing Distributed Computing (MDC), Strategic Analysis
Report, April 11, 1997 and February 9, 1996
Ivar Jcobson, Martin Griss, Partik Jonsson, Software Reuse, ACM Press New York
1997
James Martin, Information engineering: a trilogy, Book 1, Prentice Hall New Jersey
1989
Janet Butler, Enterprisewide Network Management, Computer Technology Research
Corp., 1995
Kurt Bauknecht / Esther Wyss, So klappts sicher: Einführung von Informatik in
kleinen und mittleren Unternehmungen, Zürcherkantonalbank, Zürich Sept. 1990
Panko Raymond (End User Computing), End User Computing: Management,
Application and Technology, New York 1988
Paul A. Strassmann, 40 Year of History, http://www.strassmann.com
Paul A. Strassmann, Information Payoff, New Canaan 1988
Paul A. Strassmann, The Business Value of Computers: An Executive's Guide, New
Canaan 1988
5. Appendix Total Cost of Ownership Analysis
5.3 Literature Side 26 of 1

Paul A. Strassmann, The Squandered Computer, New Canaan 1997