Total benefits of ownership

Total benefits of ownership (TBO) is a calculation that tries to summarise the positive effects of the acquisition of a plan. It is an estimate of all the values that will affect a business. TBO is a financial estimate intended to help buyers and owners determine the direct and indirect benefits of a product or system. It is used to determine potential return on investment (ROI). The usage of TBO may lead to an increase in efficiency and productivity of a business, improvements in decision-making, or improvements in the workforce. It helps to identify important areas which a business should be focusing on, as well as uncovering the hidden aspects of the decisions made by the firm. TBO goes beyond the initial purpose or implementation benefit to consider the full benefit of a decision or an asset over its useful life. A TBO analysis often shows there can be a large difference between the short-term benefit to the business and its long-term benefit. This can include operational cost savings, productivity improvements enhancements to a business's ability to compete greater employee retention increased brand equity expanding sales reach For example, a small company can now have access to worldwide markets without the costs of travel. The decisions made from TBO analysis help to add monetary profit into the company's account. While many companies perform a total cost of ownership (TCO) analysis, TBO is considered to be as important as TCO. TCO aims to minimize the total cost of the business, whereas TBO targets the maximum value of the project. Enterprise decision-makers often use both methods to estimate the actual value of an investment or strategic venture. When considering a business proposition, the enterprise decision-makers always consider other alternatives while deciding whether the original plan is the best. An advantage of using TBO is that it identifies the value of the short term and the long-term benefits of the propositions. This system helps the company to prioritize the importance of each decision.