Alternative Selection – Total Value of Ownership

More and more prevalent in business case evaluations today is the concept of the total cost of ownership whereby organizations evaluate the collective expense associated with a given initiative or asset over its entire life. Comparing initiatives on this basis alone however, fails to consider the offsetting benefits the organization would realize over the investment’s lifetime as calculated during return on investment (ROI) estimations. In order to effectively compare competing proposals, organization leaders should evaluate the total value of ownership of each investment alternative.

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