UNDERSTANDING
Total Cost of Ownership (TCO)
When selecting technology solutions for your business, it's easy to focus on the upfront price. However, a more effective approach is to evaluate the Total Cost of Ownership (TCO). This is particularly important when investing in a new copier or multifunctional printer (MFP), as the upfront cost is only a small part of the equation. Let’s explore the various expenses involved in owning and operating a modern office printer.
The copier purchase price typically represents only about 40% of the total lifetime cost.
First, what is the Total Cost of Ownership?
TCO refers to all the costs associated with acquiring, implementing, and maintaining a product or service throughout its lifecycle. Beyond the initial purchase price, it includes expenses such as installation, deployment, training, onboarding, maintenance, tech support, downtime, productivity losses, upgrades, and scalability
Why TCO Matters
Focusing solely on upfront costs can result in unforeseen expenses over time. For instance, a lower-priced solution may carry high maintenance fees or lack scalability, ultimately proving more expensive than a higher-priced alternative with greater reliability and long-term benefits.
Key Factors in TCO Analysis
- Lifecycle Costs: Assess how long the solution will last and its anticipated upgrade or replacement timeline.
- Hidden Costs: Consider indirect expenses, including employee training, integration with current systems, and downtime during implementation.
- Efficiency Gains: Account for potential savings from improved productivity, automation, or energy efficiency.
DID YOU KNOW? The copier purchase price typically represents only about 40% of the total lifetime cost. Consider all these factors to make an informed decision that aligns with your organization’s needs and budget constraints. Let’s dive deeper…
Service and Maintenance Contract
For example, your office recently invested in a mid-range business multifunction copier priced at $8,500. While this might seem steep initially, it’s important to consider this cost amortized over the device’s expected 5-year lifespan, which comes to about $1,700 per year or $142 per month for the hardware alone.
You opted for a comprehensive service contract costing $175 per month, which includes:
- Regular maintenance and servicing
- Emergency repairs
- Replacement parts (excluding consumables)
- Labor costs
- Software updates
- Remote monitoring and diagnostics
This predictable monthly expense helps prevent unexpected repair costs and ensures optimal performance.
Managed Contract Solutions
Created for our existing customers, you may place service calls, enter meter readings, order supplies, and receive remote technical support in real-time!
Cost Breakdowns
Consumables Breakdown
Your monthly consumable costs average –
Black toner cartridges: $89 (yields approximately 24,000 pages)
Color toner cartridges (Cyan, Magenta, Yellow): $95 each (yields approx. 21,500 pages each)
Drums: $45 monthly (amortized replacement cost)
Paper: $120 (based on 20,000 pages per month)
= Total Monthly Consumables: approx. $539
Hidden Costs
Several less obvious costs impact the TCO –
Network integration and IT support: $200 annually
Staff training: $300 annually (including new employee orientation)
Physical space: Approximately $25 monthly (based on square footage costs)
Workflow inefficiencies during downtime: Estimated at $500 annually
Real-World Usage Statistics
Based on your office’s actual usage –
Average monthly print volume: 20,000 pages
Color vs. black-and-white ratio: 30/70
Average cost per page: $0.039 for black-and-white, $0.12 for color
Annual paper waste reduction since implementing double-sided printing by default: 15%
Total Monthly Cost Breakdown
Hardware (amortized): $142
Service contract: $175
Consumables: $539
Hidden costs (amortized): $85
= Total Per Month: $941
Ways To Save
Proactive Cost-Saving Measures Make An Impact
- Default to double-sided printing
- Color printing restrictions for certain departments
- Regular maintenance schedule adherence
- Staff training on efficient use of scanning and digital workflows
- Environmental controls to prevent paper jams and extend component life
Educated Business Decisions
Understanding your copier’s TCO is essential for budgeting and decision-making. This comprehensive overview helps us make better choices regarding usage policies, upgrade timing, and budgeting measures. At ABS, we provide solutions designed to deliver value at every stage of the ownership journey. From initial consultation to ongoing support, we help you succeed with confidence.
