Description: The life cycle cost (LCC) refers to the total cost of ownership of a technology resource throughout its life cycle, from acquisition to decommissioning. This concept is fundamental in financial operations management (FinOps) and cost optimization, as it allows organizations to evaluate not only the initial implementation cost but also the operational, maintenance, and eventual disposal expenses of the resource. By considering LCC, companies can make more informed decisions about technology service selection, ensuring that the total value over time aligns with their financial goals. Additionally, LCC helps identify areas where efficiency improvements and cost reductions can be made, which is crucial in an environment where expenses can escalate quickly. Understanding life cycle cost also fosters a culture of financial accountability within organizations, as teams must be aware of how their decisions impact the total cost of the resources used. In summary, life cycle cost is an essential tool for planning and managing technology costs, enabling companies to maximize their investment and minimize waste.
