What is TCO (total cost of ownership)?
Total Cost of Ownership
The Total Cost of Ownership (TCO) is a financial estimate intended to help buyers and owners determine the direct and indirect costs of a product or service. It is a management accounting concept that can be used in full cost accounting. (Wikipedia).
TCO is a popular concept when it comes to comparing Software. It allows you to estimate the cost of using the OCR software and plan your automation strategy according to your possible workload and budget over time.
There are several aspects that are too circumstantial to be able to include in general cost estimates, but there are some that we know for a fact, and we can combine them in a total cost of ownership for each OCR scenario and compare them to the possible solutions on the market.
The first and most obvious element is front-end cost. This is the price that will be presented with the product, and the marketing team will be pointing towards special offers and discounts to cut it down. It is an important factor, but it is far from everything you would need to take into account. And yet, even here, there are different options. Some of the OCR solutions will offer you the “pay and forget” option of making one payment right here, right now. However, lately, the annual cost or subscription model has become more and more popular, allowing customers to spread costs over time and OCR creators to organize a steady flow of income.
Cost of Support and Maintenance
The second element of the total cost of ownership would be the cost of support and maintenance. Theoretically, it is possible to avoid […]