Making the total cost of ownership of your IT landscape visible

This article explores three types of IT landscapes, providing a detailed breakdown of their cost components.

By assessing these costs, you can gain a clearer understanding of your Total Cost of Ownership (TCO)

Table of contents

The total cost of your IT landscape in the hospitality industry consists of initial costs and ongoing costs. 

Total cost = ⅀ Cx
C1: Initial costs
C2: Ongoing costs

In the following table we share a breakdown of cost components per IT landscape:


Custom-Built Software

Many organisations opt for custom-built software when no suitable market solution is available. Software can be developed internally, outsourced to a third party, or acquired and customised.

Initial Costs

  • IT Personnel – A team with expertise in software architecture, engineering, DevOps, quality assurance, UI/UX design, product ownership, and project management is required.

  • Solution Development and Implementation – A hybrid approach is often followed, combining third-party-built and internally developed software. Strong project management is essential to align business and IT.

  • Training – Employees must complete specific training to acquire the necessary skills.

  • Hardware & Infrastructure – Investment is needed for purchasing, implementing, and managing hardware and infrastructure.

Finding and hiring IT personnel incurs high costs. Attracting skilled talent is essential to maintain a competitive edge. Moreover, the time to go live can span several years, increasing the risk that the software becomes outdated before it is fully deployed.

Ongoing Costs

  • HR/Recruitment – Hiring IT talent is an ongoing process and can be expensive.

  • Employer Branding – Competitive perks, benefits, and branding campaigns are needed to attract and retain employees.

  • Labour Costs – Costs include salaries, bonuses, parental leave, medical insurance, training programs, and pension funds.

  • Fixes/Patches – Regular software updates and bug fixes are necessary.

  • Downtime – In-house software often lacks rigorous pre-launch testing, leading to unexpected downtime.

  • Performance Tuning – Continuous improvements are needed to meet evolving standards.

  • Rewrite Customisation & Integrations – As requirements and partnerships change, software customisations and integrations need updates.

  • Upgrade Applications – Ensuring compatibility with the latest standards.

  • IT/Hardware Maintenance – Hardware must be replaced periodically to meet performance requirements.

  • Network, Security, and Database Management – Security audits, GDPR compliance, and infrastructure maintenance are ongoing responsibilities.

  • Depreciation – Loss of value over time.

Key-person risk is another significant challenge. When software environments become highly complex, reliance on a few key individuals increases, making the system vulnerable.

Software-as-a-Service (SaaS)

SaaS solutions are readily available and easy to install but come with hidden costs and challenges.

Initial Costs

  • Licensing Cost – Fees for setup and specific tools.

  • Implementation Fee – SaaS solutions require experienced IT teams for proper implementation.

  • Gap Development – Workarounds may be necessary to make the product fit specific business needs.

  • Training – Employees need to complete training programs.

  • Data Migration – Planning and executing data migration is essential.

Ongoing Costs

  • Subscription Fee per User – Monthly or yearly subscription costs.

  • HR/Recruitment – Some SaaS solutions still require experienced IT staff.

  • Labour Costs – Salaries, bonuses, benefits, and training expenses.

  • Fixes/Patches – Maintenance is needed as standalone software interfaces evolve.

  • Downtime – Errors due to modularity may cause additional downtime.

  • Performance Tuning – Monitoring is required as tools upgrade.

  • Rewrite Customisation & Integrations – Changing business needs require continuous adjustments.

  • Upgrade Applications – Regular updates are needed.

  • Training & Support – Open communities provide support, but additional training may be required.

  • Maintain Security – Security audits and software compatibility checks are essential.

  • Manage Systems & Users – System administrators must manage access and users.

  • Inactive Licenses – Costs continue for licenses assigned to former employees.

While SaaS solutions are generally more cost-effective, they are designed for the mass market, often requiring additional tools and integrations to fully meet business needs. Over time, this can lead to increased costs and inefficiencies.

A PMS tailored for outdoor hospitality

A Property Management System (PMS) tailored for the hospitality industry can be a better alternative to generic SaaS solutions. Maxxton offers a fully integrated solution, eliminating the need to manage multiple licenses, software fixes, and IT vendor negotiations.

Initial Costs

  • Implementation Fee – Covers training, best practice advice, and data migration support.

  • Gap Development – Custom functionalities tailored to client-specific needs.

Ongoing Costs

  • Cost per Booking – A fixed price per confirmed booking, covering maintenance, support, and updates.

  • Configuration – Businesses retain control over software configurations.

  • Enhancements – Optional modules can be added post-implementation.

  • Consultancy – Dedicated business or software consultants provide project-based support.

Maxxton prioritises transparency, offering a cost structure that ensures future-proof, secure, and scalable solutions.

The Bigger Picture

Beyond costs, businesses must consider whether software solutions align with operational workflows. A well-integrated system should adapt to business processes rather than forcing businesses to adjust to software limitations.

Maxxton Software provides unique advantages:

  • Connectivity – Extensive API integrations with a dedicated team for customised connections.

  • Compatibility – Continuous feature and module development, backed by a team of 100+ developers.

  • Future-Proofing – Agile development through multiple Scrum teams and industry partnerships.

  • Continuous Improvements – Regular performance monitoring, security audits, and system updates.

  • Talent Access – Strong ties with universities and a dedicated recruitment team.

  • Business Fit – Intuitive, user-friendly software designed for operational excellence.

  • Scalability – Proven ability to integrate new locations and accommodations quickly.

  • Expertise – Over 22 years of experience with a team of 100+ developers, business consultants, and a dedicated customer success team.

  • AI-Driven Automation – Enhances decision-making, reduces errors, and improves customer experience.

By choosing Maxxton, businesses gain a reliable, scalable, and future-proof software solution that optimises operations while ensuring cost-effectiveness.

 


 
 

 

 
 
 
 
 
 
 
 

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