All posts October 1, 2024

Establishing true cost of ownership of your content operations

By Brian Lens · 3 minute read

A key step in making your content operations more efficient and effective is understanding the cost impact of different parts of your solution. There are a host of obvious costs, like translation and software fees, and less obvious costs, like sporadic upgrades and training in niche skills to consider.

Establishing the true Total Cost of Ownership (TCO) for a content operation involves uncovering hidden costs through thorough assessment and interviews with key stakeholders. TCO should account for all expenses related to content lifecycle, platform maintenance, and eventual decommissioning. A review exercise should also accurately define the scope and time frame being considered.

This article guides you through some of the main considerations to evaluate the true costs of your content operations.

Without a good view on current and future TCO it is difficult to evaluate the impact of change, resulting in the risk that time, energy and money is invested in the wrong places.

Approach

Completing the assessment includes initial development and project costs, as well as costs to keep the lights on, including costs for infrastructure, maintenance, upgrades and licensing. Furthermore, there are content related costs for content creation and translation. For a complete view on your TCO, the lifespan of used platforms and associated costs to decommission them could also be included.

To give you an idea of how we would do a complete review of your content operation, we use the following approach to come to a clear review of your content operation using our expert guidance:

Define the scope of the assessment
Review setup costs and initial costs of the platform setup
Investigate and assess operational and maintenance costs
Split out support costs for your content operation and service management
Optionally estimate the lifespan of the platform and include decommissioning costs

You should understand that TCO means: all expenses that are associated with the creation, the lifetime ownership and the end-to-end running your whole content operation.

How to define the scope of your TCO assessment

Defining the scope of your TCO assessment is a crucial first step in accurately calculating all associated costs of your content operation. The scope should encompass every component that contributes to the ongoing function of your content platform, including both direct and indirect costs, both CAPEX and OPEX. Start by listing out all the elements involved in your content operation—this could be technology infrastructure, personnel, software licenses, and third-party services.

Additionally, you need to determine the time frame for your assessment. Are you calculating costs for a year, the entire lifespan of the content platform, or a different period? Clarifying the time frame helps in aligning all costs to a specific duration, which makes it easier to compare and analyze.

Finally, decide on the level of detail you want to achieve. Do you want a high-level overview, or are you aiming for a more granular analysis that includes all potential costs, no matter how small. Defining this will guide the depth of your investigation and ensure that no critical costs are overlooked.

Being complete - setup and initial costs for a platform or tool are often historic

Once the scope is defined, the next step is to review the setup and initial costs of your content platform. These are typically one-time expenses incurred during the initial launch phase and include the cost of software licenses, custom development, hardware procurement, and initial training for your team.

To accurately capture these costs, revisit the financial records and project documents from the initial implementation phase. If these records are incomplete or unclear, conduct interviews with stakeholders who were involved in the initial setup to get a more comprehensive understanding of all expenditures.

Don't forget to account for any overlooked expenses like initial marketing or promotional efforts, which are often critical to the successful launch of a content platform. These initial investments set the stage for your ongoing operations, so getting a full picture here is essential.

Assessing operational and maintenance costs

Operational and maintenance costs form a significant portion of the TCO and typically include costs related to hosting, security, regular software updates, change and maintenance activities. These are ongoing expenses that continue throughout the life of the content platform.

To estimate these costs accurately, look at both fixed and variable expenses. Fixed expenses might include monthly licensing fees for software or subscriptions, while variable expenses could cover costs associated with scaling the platform or increasing server capacity as content volume grows.

In addition to these, it is also essential to include the cost of human resources required to maintain the platform. This includes not just the IT staff who handle technical support and troubleshooting, but also content managers, editors, and anyone involved in ensuring the content remains relevant, accurate, and up-to-date.

Splitting out support costs for your content operation

Support costs are often overlooked but can add up significantly over time. These include any expenses related to having organised customer service, technical support, and service management for your content platform. Understanding support costs is crucial because they can vary greatly depending on the complexity of your platform and the needs of your user base.

For a detailed understanding of these costs, break them down into direct and indirect support expenses. Direct costs are those incurred by your support staff, including salaries, training, and software tools they use. Indirect costs involve the time spent by other teams in supporting the content operation or the opportunity cost of not being able to deploy those resources elsewhere.

By clearly sorting these support costs, you can more effectively manage them and ensure they are aligned with the overall objectives of your content strategy. Usually enterprises make use of service management platforms (ServiceNow, OpsGenie for example) that can easily help you dive into the historic data of incidents, problems and change requests.

tco

Year 1 includes Initial Setup Costs such as software licenses, custom development, hardware, and training.
Years 1-X include recurring Operational Costs like hosting, security, updates, and maintenance as above.
Support Costs are also shown for Years 1-X, covering expenses like staff salaries and training.
Year X includes Decommissioning Costs for retiring the platform.