What Is Total Cost of Ownership (TCO)?


total cost of ownership, (TCO)

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Filed under - Definitions

What Is TCO?

TCO stands for total cost of ownership

There are lots of details behind developing the total cost of ownership financial model, but below are the key cost items to be included.

  1. Contact centre technology (ecosystem) licensing cost (important to decide whether to go with cloud solution or on-premise solution)
  2. Contact centre infrastructure and connectivity
  3. Facility set-up cost (office, rent, renovation, furniture, PCs, … etc.)
  4. Staffing cost (operations/agents, support functions, management, … etc.)

This can be split into two categories:

Recurring Costs:

  • Salaries, overtime, bonuses, and vacation payments
  • Training, hiring, and recruiting costs
  • Call centre solution and maintenance
  • Rent and utilities (kudos if you’re working from home!)

One-Off Costs:

  • Hardware, furniture, and office supplies budgets

The answer to this question will include multiple factors, but before providing answers, it depends on whether you are looking at the total cost of ownership from setting up a contact centre business or from delivering an outsourcing/managed service contract to a client.

If you want to save TCO, maybe consider outsourcing it to offshore or nearshore countries. This can not only help you with the above-mentioned recurring costs but also save your time and manual effort and allow you to look after other priorities within the in-house team or organization!

You also have to factor in the cost of attrition and loss of hardware, which is significant in the contact centre space.

Thanks to Zakaria, Nurdan, Sushant and Soeren

Published On: 28th Jul 2022
Read more about - Definitions


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