“Costs of proposals should be assessed on as close to a total cost of ownership (TCO) model as possible and at a minimum include the following costs where applicable: licensing; arising hardware upgrades/renewals/replacements; ICT and user training; support; maintenance; and, external expertise. These should be calculated over the lifetime of the contract proposed or five years if not for a specified term. Costs should not be evaluated on the basis of initial outlay costs only”
From Circular 2/11 (Clause 3): Additional arrangements for ICT Expenditure in the Civil and Public Service, issued by the Department of Finance, 3rd of February 2011 (publicly available here http://www.finance.gov.ie/documents/circulars/2011/circ22011.pdf).
Music to my ears! Esri Ireland has, for a number of years now, engaged our customers very much on the basis of TCO when it comes to the innovative use and application of geographic information within and across their businesses. Our focus is on working proactively with our customers to meet their needs and to keep costs down. One of the ways in which we do that is to adopt a TCO approach to our commercial propositions. While this is relatively straightforward where we are fully engaged with customers, it is not so straightforward when engaging customers and prospects under open public procurement. In these situations it has been my experience that the emphasis around cost has always focussed on the initial outlay (short-term view) as opposed to more medium to long-term view that would encompass measures such as TCO.
The statement from 02/11 above in conjunction with the statement “We will reform public procurement to become a tool to support innovative Irish firms and to allow greater access to Irish small and medium-sized businesses” from the new programme for government, gives me a great sense of anticipation that, perhaps now, company’s like Esri Ireland, who always put a strong emphasis on Value for Money (VFM), Return on Investment (ROI) and Total Cost of Ownership (TCO), will have the opportunity to be evaluated and assessed on such messages and propositions as part of future public procurement processes.
Is there a change on the horizon or is this more “talking the talking”……… time will tell.
Interestingly however, and regardless of the explicit statements above, I have noticed an increase in customers who have started to take their own internal initiatives to seek better VFM and ROI with a view to reducing their overall costs associated with doing business. While this is most welcome and to be encouraged, my personal opinion is that the only way that we will truly reduce the cost of doing business is to increase the value of doing business.
At Esri Ireland we do this by solving the problems that people care about and by producing results that people value. This, in my opinion, will only be achieved through partnership and collaboration with customers over medium to long-term engagements, the shared purpose of which is to drive down the total cost of ownership while maximising return in investment and delivering solutions that exactly meet the customers need.
Author: Paul Synnott, Country Manager
