Exploring the Application of TCO: An Applied Austrian Business Case Approach

Theodore M. Farris, Michael Plasch, Albert Mayr, Peter Hofer

Research output: Chapter in Book/Report/Conference proceedingsConference contributionpeer-review

Abstract

Purpose – Previous models and practices in the literature have examined how companies should capture, monitor and assess the total costs of ownership (TCO). This paper applies a TCO model and discusses items for consideration when implementing TCO. Design/methodology/approach – The TCO literature is reviewed to initially guide the implementation of TCO. The case study goes beyond the theory of what should be included and addresses how each variable should be applied. Using a business case study reveals recommendations and supporting evaluation for TCO adaptation. Findings – The paper identifies a comprehensively developed TCO structure and highlights the importance of interdisciplinary commitment. It explores several challenges in data collection and correct allocation of cost elements and provides insights regarding usability and improvements. Research limitations – Findings were developed applying TCO in a manufacturing business context in Austria. Results may differ in other settings. Practical implications – TCO requires boundary-spanning to realize all costs to enhance an application of a structured TCO model. Both academia and practice should better position TCO as a systematic quantification for allocating costs and aid in improving decision making. Originality/value – This work considers the application of TCO to identify pragmatic implementation concerns and reinforce the need for transparent interdisciplinary involvement. Future research should consider the role of sales to assist cost assessment.
Original languageEnglish
Title of host publicationProceedings of the 11th European Research Seminar (ERS)
Publication statusPublished - 2017
Event12th European Research Seminar (ERS) - Barcelona, Spain
Duration: 18 May 201719 May 2017

Conference

Conference12th European Research Seminar (ERS)
CountrySpain
CityBarcelona
Period18.05.201719.05.2017

Keywords

  • Total cost of ownership (TCO)
  • Supply chain cost
  • Decision making
  • Business case

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