| Cost of Ownership |
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| August 2020 | |
Some customers may ask for a security system that costs as little as possible. This is certainly achievable but the cheapest system may not meet the expectations of serious customers. Should customers ask for a pricy system? This is not right either.
Compucon recommends 2 amendments to the cost approach. First is that cost has a relationship with value. Low cost may link with low value but not necessarily and similarly for high cost and high value. Second is the period of assessment. It is certainly wrong to consider the costs spent during installation only. The cost of operation, maintenance, and opportunities over the entire lifespan of the system should be considered. A system with a low cost may last 2 years, and another system with a higher cost may last 10 years. It is not fair to compare price only but then how would we know which system will work better and last longer. Check the track records of the suppliers and ignore sales pitches!
Whilst system cost is expressed in dollar terms, value derived from the system is not. The concept of value is personal at the consumer end, and it is organisational at the business end. Small business owners may or may not have organizational value appraisal abilities whereas bigger businesses would have. The professional team of Compucon will assist in this process.
What is the cost of opportunities? There are opportunities enabled by the Compucon quality of the security system for owners and managers to obtain more business or to lose lesser customers. On the other hand, there would be opportunities where a poor quality system causes frustration to the owner or incur a lot of owner’s time. After including the above considerations, it is natural to arrive at a measurement metric called the value to cost ratio over the ownership period (of 10 years or longer). More likely than not, the metric is only accessible to customers who are prepared to see the security system as a unique asset and not a ‘me too’ system.
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