TCO and Stakeholder Buy-In

How to present Total Cost of Ownership to senior executives.

Published April 2007 Key terminology and discussion strategies for involving top management in TCO.

To get buy-in from stakeholders on TCO thinking, engage them in dialog on three issues: 1) portfolio utilization, 2) business forecasts, and 3) life-cycle costs. People think that the problem in presenting TCO numbers (as opposed to smaller first-cost capital expenditures) is that senior execs and boards don’t want to hear big numbers.  That may not be the case – seeing the whole picture may be exactly what they want. And new terminology is making its way into the lexicon of CEOs that reflect TCO thinking at the top.  An example would be, “Capital-efficient profitable growth.” 

- From Tradeline's Lean Management Models for Facilities Management and Capital Projects Conference 2007