Alternative Selection – Total Cost of Ownership

All too often, executives and planners focus on the cost of implementing a project and omit recognition of the other associated costs accompanying the resulting outputs once the project is completed. Even if those costs are accounted for, other hidden costs, such as the reduction of future operational flexibility and options, can be overlooked. Overlooking these costs can significantly impact an initiative’s return on investment; inappropriately inflating the investment’s value to a point where an otherwise unacceptable pursuit appears to be worthwhile. Therefore, when selecting from among the myriad of business operations and initiative opportunities it is important to fully examine the total cost of ownership.

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Additional Information

Many project costs often go unrecognized. StrategyDriven’s Project Management Warning Flag – Unfunded Activities provides additional insights to the warning signs indicating not all project costs are being appropriately included in overall cost estimates.