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CYBER SECURITY FOR EDUCATIONAL LEADERS: A GUIDE TO UNDERSTANDING AND IMPLEMENTING TECHNOLOGY POLICIES Chapter 2 Total Cost of Ownership © Routledge Richard Phillips and Rayton R. Sianjina TOTAL COST OF OWNERSHIP (TCO) The “real” cost of technology is a multitude of expenses. The electricity that runs the computer, the cables that connect the computers, the tables to set the technology upon, the Internet access to let the students explore the global nature of the Internet; all Total Cost of Ownership, or TCO. Costs © Routledge are a mix of direct and indirect costs. TOTAL COST OF OWNERSHIP (TCO) Indirect costs are administrative expenses not directly attributable to the technology purchase or technology operation. Referred to as “overhead costs.” Direct costs would include equipment acquired for and directly attributable to the execution of a project. Estimates of costs above and beyond the actual equipment purchase lie between 10–25 percent of total cost. © Routledge TOTAL COST OF OWNERSHIP (TCO) Four cost categories: equipment costs, operation and maintenance costs, equipment disposition costs, and non-operational costs. IT specialist has to decide between owning the equipment or leasing the equipment. Which is more cost effective to the organization? A 3–5 year effective life span that may be required to be in operation for 10 years? Or a 5-year upgrade that will have extra operational costs every 5 years? © Routledge TOTAL COST OF OWNERSHIP (TCO) Operational technology can include equipment racks, wired and wireless routers, servers for connectivity, email and video, software and memory for system backup and protection, RAID and various memory technologies, and technology management/automation software. © Routledge TOTAL COST OF OWNERSHIP (TCO) Operation and maintenance costs include cost of wiring and interconnectivity, the cost of maintaining the technology warranty and possibly an extended warranty, the cost of software and software licensing, etc. Electrical = the per hour cost of running a typical computer and monitor $3 times (X) number of computers in the system 20, 50, 100 times (X) number of hours 40 hours, 50 hours or 24 hours system runs at full power for a week’s Times (x) 5 days = estimated electrical cost. Next, add the cost of running the system at reduced electrical usage in the overnight hours. © Routledge TOTAL COST OF OWNERSHIP (TCO) IT system security management requires maintaining an accurate inventory of technology, an accurate accounting of both potential system threats and incurred system threats, OS system patch management, consistent client and information cleanup and deletions, consistent monitoring for virus outbreaks, monitoring unauthorized access attempts, monitoring hacking-related and Malware attacks, and management of compliance with state and federal laws and standards. © Routledge TOTAL COST OF OWNERSHIP (TCO) Disposition costs would include the peripheral costs of operating the new technology. Computer tables and computer chairs would be considered disposition costs. The cost of appropriate lighting, the cost of lighting installation , the cost of installing electrical outlets for the area where the new technology will be housed, © Routledge the cost of the square footage for the new technology area, the cost of climate control for the new technology area, the cost of peripheral technology for the new technology area (projector, Smart board, whiteboard, LCD screens), the cost of physical computer lock-down, and the cost to install and maintain a security system for the new technology are all examples of the disposition costs that need to be calculated into the Total Cost of Ownership. TOTAL COST OF OWNERSHIP (TCO) Non-operational costs can be defined as all those costs that are necessary, but not directly connected, to the operation of the new technology. One of the major nonoperational costs that educational systems tend to neglect when considering TCO is training. Insurance: state, federal, and granting agencies require insurance to protect against theft, damage, and catastrophic loss. Technology needs to be audited and inventoried on an annual basis requiring non-technical personnel to perform the accounting. © Routledge TOTAL COST OF OWNERSHIP (TCO) IT specialists need to be able to calculate and predict the cost of unexpected down time in the case of electrical, technological, or other catastrophic failures and what would be the cost of temporarily renting or leasing technology to maintain operations. Calculating the cost of replacement is often ignored in TCO. Replacement will require man hours, transportation, and disposal costs that will need to be paid in order to make room for new technology. © Routledge CONCLUSION Together with best practices these are the foundations of sound technology integration in our schools: Effective leadership styles CAI,CMI, and CEI TCO © Routledge