II. Articulating a Strategic Framework
Life-cycle budgeting/costing
This concept developed originally in the architecture and engineering disciplines to embody the total capital and operating costs of an investment in plant over a planned span of use. Life-cycle costing is particularly important in the context of technology acquisition and/or development activities owing to the relatively short life span of much hardware and software. A frequent and key "land mine" in many technology development projects is the failure of the project team and steering group to look beyond the basic purchase (or development) cost of hardware and software. In a life-cycle costing environment, these costs would be assessed, as would the ongoing costs of supporting the technical environment, including: hardware and network utilization costs; software acquisition, development, licensing, and maintenance costs; and training, help-desk, and other support costs. Increasingly, utility costs can play a major role in life-cycle costs of major information systems. In particular, thorough life-cycle costing exercises are critical where host-based systems are to be replaced with client/server systems. Planners must also account for the "opportunity costs" associated with reducing the utilization of the campus host computer in cases where hardware leases or purchases make it difficult or costly to downsize this hardware.
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