System Costs – Discussion

No Plagiarism means quote every paraphase and annotation as well as not copying. Also try to avoid passive voice (grammarly helps with this common mistake). All work will be run through detection software as a precaution. THX

System Costs

Please respond to the following in not more than 200 words:

• When analyzing cost/benefit and total cost of ownership (TCO), should systems analysts concentrate most on payback analysis, net present value (NPV), or return on investment (ROI)?
• Provide an example that supports your position. Do not use one from the textbook or that has been posted by another student.

Professor Notes:

“There’s a famous saying, “pay me now or pay me later.” This week, I’d like you to apply it to the costs of an information system.

Usually, you can put more effort up front in development and expect lower operating and maintenance costs later on. Or, you could build the minimum viable product and plan for more extensive revisions throughout the lifetime of the system. Real systems are often somewhere in between, but I’d like you to explain which strategy you prefer, and why.  Please address the analysis for product development. “

Part 2:

Then, in a separate post, follow up in a substantive post of up to 150 words to one of your fellow students who took a different position. What considerations might they have overlooked?

Support your positions with explanations and/or sources, as appropriate, but do not quote. (choose one reply with a different position than the one you took)

a.  

Large cost can be quite a enormous entity if the purchases are large as well. I own a smoke shop right outside of Los Angeles, CA. called Lynwood Smokes and Snacks. I purchase all goods and materials at whole sale and turns profit by selling half the products for the total cost of what I paid. A sI come to understand the TCO system it’s simply uncovering lifetime cost on products that have a great value. The TCO system is utilizing networks like IT communities and large cooperations around the world. For example IBM server can be pruchased for three years and all set for different prices. year 1=500, year 2=250, year 3=150 this depicts the lifetime cycle of cost.

R/S

AUGUST

b.  

I personally like Net present value (NPV) since I believe in the concept that the money you have in hand now is more valuable than the money you collect later. Perhaps I am attracted to this concept since you can use the money to make more money by investing it in a business or put it in a bank to earn interest. Meanwhile, ROI measures the efficiency of an investment and calculates the return that the investment produces over time. But it is reportedly less accurate and can be easily manipulated. So, I would advise a network analyst to focus on NPV since It is a good indicator whether to proceed with a project or investment.

For example, when deciding to purchase a new laptop or a computer system. The purchase price would be the cost and plus additional cost of the computer system such as software and installations. One could buy a used/refurbished laptop to lower the cost, but the lap top might need more repairs (maintenance) or may need to be upgraded to keep up with changing technology. So, the used laptop might be cheaper, but the overall cost of ownership would be much higher than purchasing a new system.    

c.  

After reading about NPV and  ROI both are ways of measuring the good or bad outcome of designing a system. Both ways use an equation that can be manipulated in certain ways to achieve goals good or bad. It seems best to pick an option that is going to be stable and reliable in any environment. Everyone knows for the most part you get what you pay for, spending more money upfront goes along way in the future. The best example i can use at my work the managers look at ROI for everything. Sometimes spending more money causes less headaches even if ROI suffers. In our shop they bought cheap access points to connect the front and back shop, over time they where constantly going down. We flash all new cars on this network causing the flashes to fail. Replacing those controllers toke time and made customers mad. Eventually they hire a firm to replace those access points and secure the network for future use.