White Paper: Total Cost of Ownership: Realizing Procurement's Full Potential in Value Creation
In this white paper, the 2016 NIGP Business Council explores the total cost of ownership (TCO) approach to procurement and how it can help agencies achieve best value and sustainable, long-term cost savings or performance improvements. Total Cost of Ownership: Realizing Procurement's Full Potential in Value Creation examines the value of TCO and how it can be integrated into the procurement process. TCO is widely used in private market procurement, yet it is underutilized in government procurement, in which most agencies still focus on price when selecting suppliers instead of considering the full value that a supplier can bring to their relationship in the short- and long-term. This white paper examines how agencies can overcome challenges in implementing a TCO approach, along with ways to identify and realize some quick wins to gain traction and quantify the value of utilizing TCO. Finally, this paper discusses the benefits of this approach and how it can positively impact an agency and the public.