Philips LCD Monitors manual 3. Defining Total Cost of Ownership, Acquisition, Deployment, Operation

White Paper October 2005 When LCD Monitors can reduce TCO 4

Some additional facts and figures about monitors underline their importance in the overall costs picture. For example:

•The purchase cost of an LCD monitor is often more than 50% of that of a standard PC (see Figure 2)

•35% of the power bill of a typical desktop confi guration is accounted for by the monitor. The PC itself only consumes twice as much (see Figure 3)

•The theft risk of an LCD monitor is at least 3 times that of a PC. Like laptops, LCD monitors can easily be removed and are also in great demand. The theft rate of LCD monitors is estimated at 1% per year

•The technical lifetime of a monitor can easily be extended to more than 5 years, while a PC is very often written-off after 3 years

•PCs are identifi ed with asset tags and managed by a central system. Monitors are often considered as ‘consumable’ accessories

One more possibly surprising example: when employees leave or move to other departments, their PCs are always returned to IT for a ‘sanity check’ and to reload standard settings. But the monitor just stays on the desk, awaiting its new user. Important settings like brightness and contrast – which are strongly related to users’ individual preferences – are left unchanged, even though the new user will require his or her own settings.

LCD Monitor		LCD Monitor
33%		31%
	PC unit	PC unit
	67%
		69%
Figure 2: Price breakdown of typical PC set-up		Figure 3: Power consumption breakdown of a typical PC set-up

3. Defining Total Cost of Ownership

Total Cost of Ownership (TCO) is a business model to help organizations determine the total cost of procuring, owning, using and disposing of assets over time. TCO attempts to capture all the costs of IT-related investments throughout their life cycle. Four life-cycle phases are distinguished (see Figure 4):

Acquisition Deployment Operation Retirement

Figure 4: The 4 phases of Total Cost of Ownership

•Acquisition: needs assessment, end-user surveys, vendor evaluation, planning and procurement

•Deployment: site preparation, de-installation of existing equipment, installation and confi guration of new solution, on-site testing, user training and validation

•Operation: day-to-day usage, end-user support, moves & changes, hardware and software maintenance, warranty handling, asset management, power supply etc

•Retirement: removal and disposal of equipment at the end of its useful life