The Total Cost of Ownership (TCO) Tool is a calculation platform designed to assess the total costs of a product, including its purchase price and lifetime operating costs. It is presented in a simple, Excel-based format with detailed guidance.
While the TCO tool does not cover all product types, it is relevant for evaluating a variety of product groups, including computers, displays, multifunctional devices, projectors, servers, storage, large network equipment, small network equipment, lighting, refrigerators and freezers, self-service machines, add-on bidets, motorised vehicles, air coolers, condenser units, dishwashers, ovens, and washing machines.
The tool is designed primarily for providers and procurers in the B2G market, but it can also be useful for PSS providers in the B2B and B2C sectors. The TCO tool is most effective in scenarios where:
Operating costs constitute a significant portion of the total product cost.
There are notable differences in annual operating costs between products.
There are significant differences in product lifespan.
A standard for measuring product lifespan is available.
The TCO tool factors in data related to ownership expenses, such as power consumption, water use, material resources, installation, services, and labour. While it focuses on economic costs, it does not directly account for environmental impacts. However, PSS providers can use the tool to estimate a product’s climate footprint by referencing CO₂ emissions and kWh standards.
Developed as part of the Danish Strategy for Intelligent Public Procurement, the tool is frequently used during tender processes by public agencies and organisations, as well as product providers.
For PSS providers, the tool offers valuable insights into the total costs and potential climate footprints of products, serving as a guide for pricing strategies and improving service offerings. These insights are particularly relevant for addressing the challenges that many Nordic PSS providers face when developing sustainable business models.