The cost categories defined

So what are these categories that determine costs to build and manage your website?

1. Value demand: These are the costs that add value to your business. For example, functionality that provides a new offering, opens up a new channel or improves the way you communicate with stakeholders. This may see usability improvements to your eCommerce engine, a customer portal or a new blog.

2. Operational costs: Once your website build is complete, these are the ongoing costs that keep things running smoothly. Generally, you’re looking at website administration, hosting, monitoring, testing, and security.

3. Failure demand: Sometimes things go wrong in life. These costs are the unplanned factors in the day to day running of a digital business. They are generally outside of your operational costs but with solid planning and maintenance in place, these costs can be minimized.

4. Avoidable costs: These are the wasted costs that with proper leadership and processes can be minimized. In many cases, these involve the organizational overhead or administration that extend project lifecycles or get in the middle of the project processes. Handoffs and governance are examples of avoidable costs.

Allocating your costs into the above categories makes it easy to measure Total Costs of Ownership (TCO) of a technology investment. Armed with this information, you can undertake a like-for-like comparison of vendors, products, and projects.