Data Integration Best Practices – Integration projects: The real and hidden costs

Kevin Mobbs integration best practices

Data Integration Best Practices – Integration Projects Costs

While defining a data integration project we should consider what, when and how we want to integrate. Once we have done this, we can move on with the last step of the plan: the costs. The billion-dollar question… how deep should we dig into our pockets?  

If we want to have a realistic idea of the cost of our integration project, we should keep in mind that it is not a “one-time payment” thing. Building, operating and maintaining integration projects incur various costs. So, before we embark on a project, it is vitally important to take all of them into account. Of course, vendors may allow for trade-offs in these costs if the pricing available to the purchaser is substantially different from the pricing available to the vendor. However, this is not something one should count on by default.

So, in order to determine an accurate total cost of our integration project, we should calculate the total cost of ownership (TCO), which includes the following criteria:

Creation costs

These are also known as research and development costs. As the name suggests, they represent the costs present at the beginning of the project. These include every step starting from the research all the way down to the implementation. This includes:

  • Consulting and /or implementation costs
  • Installation and rollout costs
  • License costs if you decide to use an off-the-shelf product, or
  • A tailor-made plan, which may include regular costs, such as:
    • Perpetual license costs or subscription costs if it’s a SaaS product
    • Maintenance and support costs
    • Upgrades and updates costs (if any)
  • Operation, administration and training costs

Operational costs

These are the expenses you would have to keep the integration project running. Such expenses include:

  • Integration, monitoring, and administration costs
  • Updates, upgrades and maintenance costs

Additionally, some other operational costs depend on what kind of product you have. For on-premises or perpetual products you need to take into account:

  • Hardware operational costs for PCs and/or virtual machines that you will require to run the on-premises product
  • Administrative costs on operating, securing, backing-up and ensuring the availability of the product

For SaaS or cloud-based solutions you will quite likely have to deal with increasing traffic costs. This means that you might want to pay special attention to this aspect when selecting a vendor, because depending on how data should ultimately be passing between your applications, it can become very expensive very quickly.

Retirement costs

Last but not least, these are the remaining expenses that we will have to endure if we decide to leave the project. An example of such would be remaining license costs if we, for some reason, terminate the contract before the end of the license agreement.

Integration projects costs iceberg

An integration project could be an iceberg of hidden costs, therefore before implementing it, we should carefully consider each possibility in order to avoid unpleasant surprises and have a more accurate budget planning.

The next article will open the new and at the same time the last chapter of our series – best practices moving forward. There, we will talk about how to describe integrations in such a way that everybody is on the same page: the IT folk, the business people and any other stakeholders that might be involved in it. Stay tuned by following us on Twitter and LinkedIn!

About the Author
Avatar für Kevin Mobbs

Kevin Mobbs

Kevin has a background in Molecular Microbiology research and technological product development. Following a brief academic research career Kevin first experienced product development with the succesful startup Genera Technologies. This was then followed by seven-year’s experience as a Product Manager with QIAGEN and Lonza in the biotech devices industry, over 5 years successful innovation consulting for crowd-sourcing SaaS pioneers InnoCentive as well as the world’s largest re-insurer, Munich RE. Kevin is an advocate of design thinking methods and enabling ‘dumb questions ‘ to be asked and answered. ‘If something cannot be made fun, then it may not be worth doing!’

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