Which of the following best describes the method used to assess the full lifecycle cost to a user of an IT service?

Question

Options

• ATotal Cost of Utilisation.
• BTotal Cost of Ownership.
• CTotal Cost of Provision.
• DTotal Cost of Allocation.

• B
  92% (36)
• C
  5% (2)
• D
  3% (1)

Explanation

Total Cost of Ownership (TCO) is the established methodology for calculating all costs associated with an IT service or asset across its entire lifecycle - including acquisition, implementation, operation, maintenance, and disposal - giving a complete financial picture beyond just the purchase price.

Why the distractors are wrong:

• A. Total Cost of Utilisation - Not a recognized IT financial management term; "utilisation" refers to usage rates, not lifecycle costing.
• C. Total Cost of Provision - Also not a standard term; "provision" relates to making a service available, not measuring its full cost to the user.
• D. Total Cost of Allocation - Not a real methodology; "allocation" in IT finance refers to distributing costs across departments, not measuring them holistically.

Memory tip: Think of "Ownership" as cradle-to-grave - you own the responsibility for a thing from the moment you acquire it until you retire it. TCO captures every cost you bear as the owner, making it the natural fit for "full lifecycle cost."

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