Insight
Profitability
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Laura D
Guest Editor
14 Sept 2023
Rethinking Total Cost of Ownership, and why platforms like Andisor are the answer to the CFO's goal
If you follow industry thought leaders, you're likely acquainted with Laura's compelling posts. Her approach to salient topics is always direct, heartfelt, and refreshingly candid. Recently, she took on the complex subject of Total Cost of Ownership (TCO), an issue that resonates deeply with C-suite decision-makers.
Laura's insights into TCO prompted us at Andisor to reflect on how our marketplace can positively impact an organization's TCO while fostering unparalleled growth. We have reproduced Laura's original LinkedIn post below so you can enjoy her writing. We couldn't resist adding our own spin on TCO, articulating how Andisor serves as a catalyst for 'riskless growth.' For more interesting reads or to connect directly with Laura, follow this link. We value your input immensely. If you have any comments, please reach out to me at vandana@andisor.com.
The OG PoV
["Total Cost of Ownership 👇
The CFO loves to hear this and many tech companies love to present it and it sounds sexy. But they often miss one key area of understanding. People!!!
The formula: I + M - R = TCO. The variables are initial cost (I), maintenance costs over (5) years (M), and the remaining value after (5) years of depreciation (R). In this formula, I guess people are in the maintenance part. 🤷🏼♀️
To the Retail Leader. iI anyone presenting a TCO in such a vortex make sure you layer it with your own TCO. 👇
- Is this a heavy product to learn?
- Do we have the right people to run this product effectively?
- Does this product simplify our operation or do we have to do some departmental change management?
As more and more tech consolidates the initial TCO may look good but implementation and operationalising is a different beast. Be aware of the ACRONYM BS especially this one in a downturn period 💩 "]
Our Perspective
The age-old adage, "money talks," never rang truer than in a boardroom discussing Total Cost of Ownership (TCO). CFOs love to scrutinise this metric, and tech providers present it like a cornerstore advantage. Yet, there's a blatant oversight: the people.
The Traditional Formula and its Shortcoming
Let's start with the traditional formula: **I + M - R = TCO**, where *I* stands for initial costs, *M* for maintenance costs over five years, and *R* for the remaining value after five years of depreciation. While it seems straightforward, look again. Who's doing the maintaining? You guessed it—people. Your TCO Should Include More.
For the retail leaders out there, when you're handed a TCO calculation, lay over your own parameters. Here's a checklist:
- Is this solution a labyrinth to navigate?
- Do we have the expertise to maximise its potential?
- Is it a plug-and-play or a Pandora’s box of departmental change?
The glitter of an enticing initial TCO often masks the grim reality of its operational complexities.
The Marketplace Advantage: Streamlined Operations
Data-backed insights clearly show that wholesale marketplaces, as compared to standalone SaaS tools, substantially reduce the TCO for brands. How? They've essentially done your homework for you. According to *Forrester Research*, companies using a digital marketplace for B2B sales reduced their TCO by up to 30% compared to SaaS platforms.
At Andisor, you aren't just buying a platform; you're buying a powerhouse of precision for better decisions.
One Platform, Multiple Workflows: With our buyer-approved B2B workflows, you don't need to juggle different platforms for different needs. Streamlined? Check.
Real-time Analytics: You gain a 360-degree view of sales data. Decision-making becomes an informed and almost instantaneous affair. In the war room of today's cutthroat market, intel is your best asset.
Human Element: Andisor connects you to aligned retailers globally, considering values, goals, and customer segments. People aren't part of maintenance; they're the core of a thriving ecosystem.
Your TCO: A Story of Value
By embracing Andisor, you’re not just reducing TCO; you’re magnifying your output. You simplify your operations, not at the expense of your potential but in amplification of it. In a world where TCO can be a sink-or-swim metric, choosing Andisor is akin to choosing a powerful speedboat over a leaky canoe. And don't we all love a powerful speedboat... the wind on your face, the sunlight shimmering off the water, and that exhilarating feeling of speed as you outpace all else.