Network Allies Blog Reducing Total Cost of Ownership for OEMs

Original Equipment Manufacturers (OEMs) around the world face increasing challenges and global competitiveness. Their customers are demanding more solutions and greater value; increased competition is affecting profit margins; ever-changing computer technology results in shorter product lifecycles; costs are escalating; and more productivity is expected with fewer staff. In this challenging business environment, many OEMs have reconsidered their business models and adopted new outsourcing strategies to improve their competitive position and reduce their total cost of ownership (TCO).The total costs associated with designing, manufacturing, and maintaining an application-specific computing system are not always readily apparent because some of these costs are not obvious and difficult to calculate. They fall into the following major categories: Direct costsIndirect costsRisk-related costsBy setting up a "virtual hardware division" through Smart Outsourcing, OEMs can meet specific engineering, manufacturing, deployment and support needs. This allows the OEM to reduce TCO over the entire product lifecycle by enabling you to:Reduce and control overhead costsFocus resources on core competenciesEliminate capital expendituresSave on manpower and training costsIncrease flexibility and agilityFor maximum impact, the outsourcing partner should have the ability to develop and manufacture application-specific computing systems - integrated software and hardware - that are customized and optimized for the particular needs of their customers or industry. Click here to read more.