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Abstract
All resources need to be managed to realize opportunities. Isolating the benefits of Information Technology and relating them to the associated costs has proved elusive and threatened emerging opportunities. A change of approach has been advocated to overcome these problems, which focuses on the Total Cost of Ownership. Over the past several years, the Total Cost of Ownership has been both hailed and scorned.
The origins of the Total Cost of Ownership and its development provide the foundation for inquiry. The advantages and disadvantages of this cost measure are discussed from the extant management literature. Current usage of the Total Cost of Ownership is examined. Considerations of capacity levels, opportunity costs, and positive and negative externalities are introduced to focus on cost containment issues. The assessment identifies the pitfalls and opportunities in using the Total Cost of Ownership to ascertain the costs of Information Technology.