In the current economic environment, where IT organizations are on shoestring budgets and every project requires a strong financial justification, Total Cost of Ownership (TCO ) has yet again become a key concern. Looking at TCO for data integration is no exception.
Most folks understand that TCO should look at both upfront and ongoing costs. And the technology/productivity angles are fairly obvious, even if they are not always easy to quantify—how much time and resource can a technology save both in upfront development and the downstream maintenance and administration. Technology-based factors such as ease of use, functional capabilities, and scalability/performance all fall into this equation.
But to really evaluate TCO, it’s important to look beyond just the technology to people and process. By people, I mean not just the productivity gains for the users of the tool. It’s also important to look at staffing—where will you get the skilled resources to implement your projects? Do your consulting or system integration partners have personnel trained on both the relevant technology as well as the methodology? Is a large pool of trained developers and other resources available in the market? Are those people available where you need them, around the globe? At a reasonable cost? In other words, it’s not just a matter of calculating an abstract staffing cost for your data integration project—you need to research what the actual costs would be in the open market to get those people on board.
A final factor in calculating TCO is around process or methodology. You can have the best technology and the smartest people at your disposal, but if you don’t employ a sound methodology, you may be missing out on a lot of cost savings. Specifically, practices like Integration Competency Centers (ICC), which my colleague John Schmidt has discussed extensively in his blog, can have a huge cost impact. According to Gartner, large enterprises can save an average of 30% in integration application and data interface development time and costs, and 20% in maintenance costs, by adopting the common approach of an Integration Competency Center. And at Informatica, we have seen customers like T. Rowe Price experience significant cost savings through their ICC implementations.
So to really minimize TCO, you need to factor in all three points on the tried-and-true people-process-technology triangle. Looking at TCO in this holistic manner will help you justify the investment in the projects you are pursuing, as well as help to maximize the potential cost savings.