Making the total cost of ownership of your IT landscape visible

In-house

Usually, this IT landscape relates to the non-availability of a suitable market solution. Software can be built by the organisation itself, by a third party or it can be acquired and customised.

Initial costs involve:

• IT personnel 
  You need to build a team with all sorts of expertise. For instance, software architects, software engineers, DevOps engineers, quality assurance employees, designers, product owners and project managers.
• Solution development and implementation
  Usually, a hybrid approach is followed. Parts of software will be acquired or built by third parties. Other parts of the software will be built by the team itself. Much time will be spent on engineering, customising, and implementation. Strong project management is needed to continuously align business and IT.
• Training
  Specific skills are needed. Team members have to enroll in specific training.
• Hardware & infrastructure
  All hardware & infrastructure needs to be purchased, implemented, and managed.

To find and hire IT personnel a hefty cost will arise. Furthermore, you need to attract talent and skill sets. Otherwise, you quickly lose a competitive advantage compared to your competitors. Keep in mind that time to go live can take a couple of years. There is a serious risk that ‘new’ software is directly outdated from the moment it is used.

Ongoing costs involve:

• HR/recruitment 
  Attracting talent will be a day-to-day routine. Hiring HR employees and/or external recruitment will have a serious impact on your costs. Investing in new talent also may involve allocating precious time to your current employees for mentoring freshers.
• Employer branding
  For attracting and retaining employees, you need to distinguish your company from rivals. You need to offer competitive perks and benefits. Moreover, you will have to run paid branding campaigns.
• Labour costs
  Besides salary and bonuses, there are plenty of other things to keep in mind. For instance: paternity/maternity, medical insurance, accident insurance, training programs, and pension fund.
• Fixes/patches
  After a while, your software environment becomes more complex. On a regular basis, you have to execute fixes.
• Downtime
  There is plenty of evidence that in-house software is not intensively tested before going live. This results in more downtime.
• Performance tuning
  Standards evolve. You need to keep working on performance tuning.
• Rewrite customisation
  Requirements will change. As a result, customisation needs to be rewritten.
• Rewrite integrations
  Prefered partners and existing integrations will change over time.
• Upgrade applications
  To be able to work with the latest standards, you need to upgrade your applications from time to time.
• IT/hardware
  Replacing hardware needs to be executed with respect to optimal performance requirements like processing speeds for software, storage demands for high volumes of important or sensitive data, and many requests from users.
• Maintain network, security, and database
  Continuously manage, implement and improve your network infrastructure and storage costs. Moreover, your team has to run security audits and have to comply with GDPR standards.
• Depreciation
  General loss of value.

Ongoing costs relate to customisation of software and applying all sorts of maintenance and improvements. Software features proactively need to be developed. Otherwise, your IT landscape will no longer be functional or useful in the long term or no longer meets the wishes and requirements of the current mindset. Especially for the longer run, Key-person risk arises when your business relies too heavily on one or a small handful of individuals. This may happen when your ERP software environment is very complex. It also may happen when niche skills are hard to find.

Software-as-a-Service (SaaS)

SaaS is readily available. It is easy to install and use.

Initial costs involve:

• Licensing cost
  For set-up and specific tooling you have to pay additional licensing costs.
• Implementation fee
  SaaS is never truly a plug-and-play solution. SaaS still requires large and experienced IT teams for successful implementation.
• Gap-development
  Getting your SaaS to perform the functions you need may require your IT team to implement workarounds and you need to force the product to do something it wasn’t designed to do.
• Training
  Specific skills are needed. Team members have to enrol for specific training.
• Data Migration
  Planning and executing data migration.

Ongoing costs involve:

• Subscription fee per user
  Monthly or yearly subscription fee per user per tool.
• HR/recruitment
  Especially ERP SaaS solutions require experienced IT staff.
• Labour costs
  Besides salary and bonuses there are plenty of other things to keep in mind. For instance: paternity/maternity, medical insurance, accident insurance, training programs, and pension fund.
• Fixes/patches
  After a while, your software environment becomes complex by “standard” interfaces with multiple standalone software solutions. On a regular basis you have to execute fixes.
• Downtime
  Usually, different tools and modules can end up in errors in modularity. This results in additional downtime.
• Performance tuning
  Due to upgrades of different tools, you need to keep monitoring performance.
• Rewrite customisation
  Requirements will change. As a result customisation needs to be rewritten.
• Rewrite integrations
  You need to manage and monitor integrations.
• Upgrade applications
  To be able to be working with the latest standards, you need to upgrade your applications from time to time.
• Training & support
  Open communities and continuous support are cost-free. Since you built your own IT landscape, you will face more challenges that need additional training and support.
• Maintain security
  Running security audits and looking for leaks between different software applications.
• Manage systems & users
  An admin has to manage systems and users.
• Inactive licences
  As your company grows, you register more users. However, after an employee leaves the company, you have to pay for this inactive licence.

A big advantage of SaaS solutions is that it usually has been developed for the mass market. The cost of development is shared among multiple users and usually is cheaper. However, there are hidden initial costs. Firstly, enterprise SaaS is never truly a plug-and-play solution. SaaS still requires large and experienced IT teams for successful implementation. Secondly, getting your SaaS to perform the functions you need may require your IT team to implement workarounds and you need to force the product to do something it wasn’t designed to do. Moreover, you will pay for all sorts of unnecessary features and/or have to purchase extra software since a mass market solution doesn’t fit your exact requirements. Your IT landscape may end up being composed of a large number of different tools and systems. The reason for this is that a module or tool is acquired for each separate problem or business activity. Often these separately acquired modules and tools do not fit properly. As a consequence, at every turn, an extra tool must be purchased. This will lead to hefty costs in the future. Furthermore, SaaS solutions are not always compatible with the software you already use. This can slow down operations and efficiency.

Maxxton Software

A PMS solution can be a good fit since modules and features are specifically developed for the hospitality industry. Most PMS vendors do not target the large vacation & short-term rental industry. Mid and large vacation & short-term rental industry companies are advised to hire an experienced external consultant to run a gap analysis since the IT environment will be complex. Are solutions future-proof in times of acquisitions, growth, and investments? Do they have a large developer team that can work on your future requirements? Do they charge hefty additional fees for future customisations and enhancements?
Maxxton offers a complete solution. This way you do not spend time on keeping an overview of all your software licences, fixing bugs between systems, and negotiating with IT providers for better prices.

Initial costs involve:

• Implementation fee
  Cost for implementation phase including training, advise on best practices, and supporting the data migration.
• Gap-development
  Client-specific services or functions that need to be developed.

Ongoing costs involve:

• Cost per booking
  A fixed price per booking including maintenance, support, and updates.
• Configuration
  Your software team has to own and maintain configurations.
• Enhancements
  New and optional modules can be added after go-live.
• Consultancy
  Project-based dedicated business or software consultant.

Maxxton believes that a transparent cost structure will work out best for all parties involved. That is why Maxxton recommends a design phase to assess all existing and future (operational) requirements. We keep your application future-proof and secure and offer a transparent system status. In return, we only ask for a fixed price per confirmed reservation.