Have you critically analysed the total cost of ownership (TCO) of your applications? This paper talks about the key elements of TCO.

1. Lifetime total cost of ownership of
an Application
It’s so much more than the initial cost!
Going live (licenses, implementation, training) - $1 million
Software maintenance - $110,000 per year
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Operation Cost (infrastructure, help desk, business
continuity management) - $140,000 per year
15-year maintenance and operations
costs - $3,750,000.
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15-year cost of enhancements - $1,955,000
Lifetime TCO - $6,705,900.
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The initial cost of the application is just 15% of the lifetime TCO
Have you ever wondered about the Lifetime Total Cost of Ownership (TCO) of an application when you are considering a new application or
when you are reviewing your application portfolio? Every CIO / Architect / Business Manager has the inherent desire to make well informed
decisions and avoid white elephants!
Having said that, there are several deterrents for accurately measuring TCO.. For example, no one can plan or predict decommissioning dates!
Aging, but cumbersome, applications are difficult to replace! Design decisions highly influence TCO! Evolution of Multi-tenancy (SaaS) bring
in its own share of complexity!
Long-term TCO leads to zero innovation. Poor application performance can cost more than you think! So, how exactly do you even go about
measuring Lifetime TCO? What are the key components of it and the different aspects that have to be considered?

2. Do all enterprises speculate on the following?
Understanding future cost & expenditure of existing application portfolio
When acquiring or developing a new application, understanding the future costs on these applications
Keeping a clear track of creation costs, operation costs and costs to change
How to measure the TCO of an application
TCO = Create + Operate + Change
At a high level, we would recommend that you take these components in a cumulative manner:
Cost to Create
Cost to Operate
Cost to Change
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------Cost to Create:
Cost to Create are generally associated with acquiring or developing a new application. Most enterprises maintain good record of these
costs.
The cost to develop / create an application and go live for the first time will include the following aspects,
License costsations - 30% of development time was saved using our Solution Accelerators
Implementation costs Average time spent on the portal increased from 19 sec to 130 sec, because of advanced technologies used in UX
engineering
Resource costs
Infrastructure costs - The Portal can support almost one million profiles and it is further scalable
Other indirect costs
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------Cost to Operate:
Costs involving day to day operations are defined as cost to operate. It is this area, where most enterprises fail to maintain proper data.
This is mainly because there is rarely a single budget line item for all the costs associated with operating an application, as budget
control and cost centers are spread across the life of the applications.
- The portal was designed in an eventual consistency model, to accommodate enormous number of activities from end
The cost to develop / create an application and go live for the first time will include the following aspects,
users
License costs
Data Center Costs
Help Desk Costs
Business Continuity
Quality Assurance
Security costs
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------Cost to Change:
Cost to change involves corrective maintenance costs, adaptive maintenance costs, preventive & perfective maintenance costs and all the
investment needed to modify, extend and integrate application functionalities after the initial go-live date.
This component actually depends more on the application design aspects which include,
Maintainability – upgrade releases, fix errors, minor changes

3. Adaptability – business logic
Extensibility – new capability beyond original scope
This is the major area where costs are difficult to maintain mainly because of the following reasons:
Data depends on the size of applications, larger applications are critical and tend to have more data; more data requires more storage;
more storage requires more backup, thus leading to more investment.
As utility of applications extend, there is more risk associated with the applicatioin, thereby increasing the need for more investment in security and risk management
Larger applications involve even more changes, which increase the need for control mechanisms to maintain the quality.
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About Aspire
Aspire Systems is a global technology services firm serving as a trusted technology partner for our customers. We work with some of the
world's most innovative enterprises and independent software vendors, helping them leverage technology and outsourcing in our specific
areas of expertise. Our services include Product Engineering, Enterprise Transformation, Independent Testing Services and IT Infrastructure Support services. Aspire is currently working with 65+global firms and helping them on areas like Application Development, Testing,
Implementation, Support, Maintenance and Transformation!
Our core philosophy of "Attention. Always." communicates our belief in lavishing care and attention on our customers and employees.
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E-mail: info@aspiresys.com - 30% of development time was saved using our Solution Accelerators
Fax: +91-44-6740 4234
E-mail: info-india@aspiresys.com
- Average time spent on the portal increased from 19 sec to 130 sec, because of advanced technologies used in UX
engineering
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- The Portal can support almost one million profiles and it is further scalable
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- The portal was designed in an eventual consistency model, to accommodate enormous number of activities from end
users