Have you ever wondered about the Lifetime Total Cost of Ownership (TCO) of an application when you are considering a new application or when you are reviewing your application portfolio?  I am very sure that every CIO / Architect / Business Manager has the inherent desire to make well informed decisions and avoid white elephants!

hurdle

That said, there are several deterrents for accurately measuring TCO.. For example, no one can plan or predict decommissioning dates! Aging, but cumbersome, applications are difficult to replace! Design decisions highly influence TCO!  Evolution of Multi-tenancy (SaaS) bring in its own share of complexity!

So, how exactly do you even go about measuring Lifetime TCO?  What are the key components of it and the different aspects that have to be considered?

At a high level, we would recommend that you take these components in a cumulative manner:

Lifetime TCO

Cost to Create:  The cost to develop / create an application and go live for the first time will include the following aspects,

  • License costs
  • Implementation costs
  • Resource costs
  • Infrastructure costs
  • Other indirect costs

Cost to Operate: This includes the on-going operational costs like,

  • License costs
  • Data Center Costs
  • Help Desk Costs
  • Business Continuity
  • Quality Assurance
  • Security costs

Cost to Change: This component actually depends more on the application design aspects which include,

  • Maintainability – upgrade releases, fix errors, minor changes
  • Adaptability – business logic
  • Extensibility – new capability beyond original scope

 

Need more help? Write to me at ganesh.rajendran@aspiresys.com and we can help you to assess your application portfolio, measure TCO and help you operate, optimize and transform your applications!

About Aspire Systems: Aspire is currently working with 65+global firms and helping them on areas like Application Development, Testing, Implementation, Support, Maintenance and Transformation!