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What is the total cost of ownership (TCO) of a software project?

by Nicolas Bossut last modified 2008-06-25 11:27

What is the total cost of ownership (TCO) of a design research project? If we knew, we'd probably make more realistic budgets for things like co-ordination, and communication, that often don't get paid for, even though we do the work. Or else, if we knew the true time costs, but could not get them included in the budget, then maybe we wouldn't do the project.

Source : Doors of Perception

One reason the IT boom has flattened out is that TCOs for information systems have been found to be far higher than big customers at first realised. Rishab Gosh, researcher at UNU-MERIT, quotes these TCO numbers in a paper for First Monday:

  • Licence fees 5-10%
  • Hardware and software costs 15-40%:
  • Maintenance, integration, support and training 60-85 %

Gosh makes the point that free software is a skills enabling platform; it is far cheaper, and it is more adaptable to local needs than proprietary software. But the TCO issue has wider ramifications. One of the key lessons to emerge from our Project Leaders' Round Table last wekend was that co-ordination, which has many facets, is a key success factor: if it's not done properly, or is treated as an extra, projects (and the people involved) usually suffer.