Understanding costs and analyzing suppliers finances and the buy vs. lease

This section though large (20 pages) is broadly concerned with understanding what the total costs are and understanding the financial position of the supplier and the kind of contract one is getting into.

Thus it is not price alone that is important but the TCO (Total cost of ownership) these goes beyond the IT concept of TCO  and cover unit total cost,life-cycle cost, landed cost and total cost of performance for services.

Understanding the financial stability of the supplier is critical and therefore reading the supplier's balance sheet can give asense of the stability of the supplier and supply. Finally it's important to understand the lease vs buy considerations particularly for equipment as is the clarity on legal accounting issues like Uniform Commercial Code 2A, FASB 13 and SOX though is examined in more detail in a later section.