Implementation Manager (IM) Specialist CHTS Practice Test

Maintenance costs for software and hardware are usually quoted as a percentage of what?

1. The license or purchase cost

2. The overall budget

3. Vendor quoted prices

4. Service contracts

The correct answer is: The license or purchase cost

Maintenance costs for software and hardware are typically quoted as a percentage of the license or purchase cost. This practice is standard in the industry because it provides a consistent way to estimate ongoing expenses associated with maintaining and supporting the technology. By tying maintenance fees to the initial purchase costs, organizations can forecast their future expenditures more accurately, making budget planning more straightforward. The rationale behind using the license or purchase cost is that these figures represent the initial investment in the software or hardware. The percentage-based model reflects the ongoing support necessary to keep the system operational, which often correlates with the complexity and cost of the initial investment. In contrast, quoting maintenance costs based on the overall budget, vendor quoted prices, or service contracts could lead to inconsistencies and challenges in cost management. The overall budget may fluctuate and not provide an accurate reflection of the necessary maintenance for specific items, while vendor quoted prices can vary significantly, leading to potential inaccuracies in maintenance estimations. Likewise, service contracts are typically based on the services rendered rather than a consistent percentage of initial costs, which can lead to varying maintenance expenses.