Whether it is a $20,000 mobile application or a $2 million enterprise workflow, there is never a one-time cost. Modern software solutions require regular updates and maintenance else they get obsolete. Business owners frequently miscalculate the total cost of ownership (TCO) assuming that the bulk of the spend will go towards initial project launch development. While most businesses will factor in the maintenance costs as part of budgets during project cost calculations, they are other hidden costs that get overlooked.
What’s total cost of ownership?
The total cost of ownership (TCO) of the software refers to the sum total of all costs and expenses. It is not just the acquisition, implementing, managing, and maintaining the software solution during its lifecycle. Software will need renewal of licenses or updating to comply with new regulations; data security upgrades etc. It should also include costs incurred for training employees to use the software, onboarding clients onto the system, support and cost of development team salaries if you have developed the product in-house.