TOTAL VALUE OF OWNERSHIP (TVO) ANALYSIS

Total Value of Ownership (TVO), or total value of opportunity, is a methodology of measuring and analyzing the business value of IT investments. It is a measure used to compare investment alternatives that incorporate costs as well as benefits which are both tangible and intangible.

Gone are the days when Total Cost of Ownership (TCO) was the sole methodology to make technology investment decisions.  There is a paradigm shift in how to quantify and articulate value. With a TVO methodology, we take a holistic view of the solution which includes both costs and benefits.

Our unique Total Value of Ownership framework enables the inclusion of qualitative gains into a ROI calculation as well as financial gains that go beyond cost reductions. It essentially consists of:

  • Quantifying the cost of the solution – which includes all costs (e.g. cost of acquisition, operation and maintenance, disposal at the end of life etc.)
  • Quantifying the cost of the solution – which includes all costs (e.g. cost of acquisition, operation and maintenance, disposal at the end of life etc.)
  • Calculating the Total Value of Ownership (TVO), which is (Total Benefits – Total Costs)
  • Deriving key financial metrics: ROI, Payback Period, Net Present Value, etc.

Cabot Partners provides strategic advisory services to:

  • IT Solution Providers: Conduct TVO studies to compare their solutions with that of competitors, leverage the findings in marketing and sales campaigns
  • Enterprises: Conduct TVO studies to facilitate investment decisions, assist management in justifying the solution to executive management

Here are some examples:

To find out how we can assist you, please contact info@cabotpartners.com