Although EPOSability Ltd. are generally more involved in the straight forward procurement & installation of EPOS and IT equipment, we are able to conduct more involved procurement methodologies for complex projects and purchases. One of our techniques is the significance of Life Cycle Costing / Whole Life Costing; which we utilize to ensure our clients are better informed in relation to the total cost of ownership. This approach can provide significant future cost reductions that are previously hidden from the upfront visible purchase costs, and assists our clients where multiple options are concerned. As the purchasing function within a business may be different to the operational  and on-going running of the business, the involvement of management is often key to ensuring the benefits of Life-Cycle-Costing can be achieved; with Cost Reductions shared amongst departments.

 

EPOSability employs a varying degree of sophistication to our Life Cycle Costing models, according to the complexity of the goods or services being procured.

 

We implement a structured approach that addresses all cost elements in relation to a purchase. We introduce a Cost Breakdown Structure to normalise all options, and introduce a spend profile over the anticipated life-span of the product or services under review. In order to allow a like-for-like comparison, the use of discounting, inflation and cost estimating is taken into account in-order to compare like-with-like.

 

In additional to differentiating costs into a Cost Breakdown Structure, we would identify costs recurring  or one off costs.

 

Relevant examples of one-off costs could include:

-          Procurement Costs

-          Implementation & Deployment

-          Staff Training

-          Transition from incumbent suppliers

-          Potential Changes to business processes

-          Withdrawal costs from existing services & disposal

 

Examples of recurring costs include:

-          Operating Costs (Utility usage)

-          Monthly or Annual Service Charges / Licensing Costs

-          Costs associated with subsequent changes to the estate

-          Downtime of equipment or software (frequency or requirement)

-          Ongoing Maintenance, replacement or repair

 

The benefits of Life-Cycle-Costing (LCC) or Whole Life Costing are marked - providing it is applied appropriately, and the cost of implementing a Life Cycle Costing Review does not outweigh the forecast saving (upfront feasibility to be conducted). Benefits include:

-          Thorough evaluation of competing options within the market place (Alternatives are evaluated)

-          Improved awareness of Overall Costing, better informing Key Decision Makers (Promotes informed negotiations)

-          Improved cost profile forecasting (allowing improved Capital Expenditure forecasting)

-          Performance trade-off against the initial cost injection (i.e. improved EPOS transaction performance, providing an unaccounted saving)