Insights & best practices

Making the total cost of ownership of your IT landscape visible - Maxxton

Written by Stefan Schoenmaker | Sep 28, 2022 10:00:00 PM

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 Moreover, the time to go live can span several years, increasing the risk that the software becomes outdated before it is fully deployed.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.

 


 
 

 

 

 
 
 
 
 
 
 
 
View full post