This is how TCO helps to choose the most cost-effective e-commerce platform
When considering a new eCommerce platform, the decision should be guided by business needs, goals, and overall costs. It’s important to evaluate the Total Cost of Ownership (TCO) when selecting a platform, as solutions that seem affordable at first can turn out to be more expensive in the long run. Many additional costs — such as integration partners, consulting services, plugins, and marketing or development support — can significantly increase the total cost and should be factored in from the beginning.
This is how TCO helps to choose the most cost-effective e-commerce platform
When considering a new eCommerce platform, the decision should be guided by business needs, goals, and overall costs. It’s important to evaluate the Total Cost of Ownership (TCO) when selecting a platform, as solutions that seem affordable at first can turn out to be more expensive in the long run. Many additional costs — such as integration partners, consulting services, plugins, and marketing or development support — can significantly increase the total cost and should be factored in from the beginning.
Lauri Koskensalo
Head of Growth
3
min read
26.10.2024
Total Cost of Ownership (TCO) analysis is a crucial tool that helps understand the true costs of a platform and anticipate the expenses a company will incur in the first 3–5 years. When TCO is carefully assessed, costly surprises can be avoided, ensuring that the e-commerce platform supports the long-term goals of the business.
Total Cost of Ownership (TCO) analysis is a crucial tool that helps understand the true costs of a platform and anticipate the expenses a company will incur in the first 3–5 years. When TCO is carefully assessed, costly surprises can be avoided, ensuring that the e-commerce platform supports the long-term goals of the business.
Total Cost of Ownership (TCO) analysis is a crucial tool that helps understand the true costs of a platform and anticipate the expenses a company will incur in the first 3–5 years. When TCO is carefully assessed, costly surprises can be avoided, ensuring that the e-commerce platform supports the long-term goals of the business.
What does TCO mean and what should it include?
TCO provides a realistic picture of the overall costs of owning and maintaining an e-commerce platform, taking into account all direct and indirect expenses. These may include:
Initial investments and implementation: The first costs associated with platform selection, such as design, licensing, and installation.
Plugins and extensions: Add-ons that enhance the functionality of the platform or add new features to it. These include procurement, maintenance, and update costs.
Maintenance costs: Ongoing maintenance of the platform, such as server and support costs.
Integrations and customizations: Connecting external systems, which may require customization.
Hosting and cloud services: Costs of server infrastructure and potential scalability requirements.
User training and support services: Training staff and ongoing support needs.
Updates and version changes: Development and updates of the platform that require resources.
Data security and privacy: Maintaining data security updates and compliance with regulations.
System scalability: The ability to expand the system as the business grows without large additional investments.
Dependency on external vendors: The need to use external partners, for example, in integrations.
Costs of usage and operations: Maintenance and repair of software and hardware.
Downtime and production interruptions: Costs caused by potential outages.
Costs of development work and innovations: Developing new functionalities to meet business needs.
The items in the above list may vary depending on the functional needs of the company.
TCO provides a realistic picture of the overall costs of owning and maintaining an e-commerce platform, taking into account all direct and indirect expenses. These may include:
Initial investments and implementation: The first costs associated with platform selection, such as design, licensing, and installation.
Plugins and extensions: Add-ons that enhance the functionality of the platform or add new features to it. These include procurement, maintenance, and update costs.
Maintenance costs: Ongoing maintenance of the platform, such as server and support costs.
Integrations and customizations: Connecting external systems, which may require customization.
Hosting and cloud services: Costs of server infrastructure and potential scalability requirements.
User training and support services: Training staff and ongoing support needs.
Updates and version changes: Development and updates of the platform that require resources.
Data security and privacy: Maintaining data security updates and compliance with regulations.
System scalability: The ability to expand the system as the business grows without large additional investments.
Dependency on external vendors: The need to use external partners, for example, in integrations.
Costs of usage and operations: Maintenance and repair of software and hardware.
Downtime and production interruptions: Costs caused by potential outages.
Costs of development work and innovations: Developing new functionalities to meet business needs.
The items in the above list may vary depending on the functional needs of the company.
TCO provides a realistic picture of the overall costs of owning and maintaining an e-commerce platform, taking into account all direct and indirect expenses. These may include:
Initial investments and implementation: The first costs associated with platform selection, such as design, licensing, and installation.
Plugins and extensions: Add-ons that enhance the functionality of the platform or add new features to it. These include procurement, maintenance, and update costs.
Maintenance costs: Ongoing maintenance of the platform, such as server and support costs.
Integrations and customizations: Connecting external systems, which may require customization.
Hosting and cloud services: Costs of server infrastructure and potential scalability requirements.
User training and support services: Training staff and ongoing support needs.
Updates and version changes: Development and updates of the platform that require resources.
Data security and privacy: Maintaining data security updates and compliance with regulations.
System scalability: The ability to expand the system as the business grows without large additional investments.
Dependency on external vendors: The need to use external partners, for example, in integrations.
Costs of usage and operations: Maintenance and repair of software and hardware.
Downtime and production interruptions: Costs caused by potential outages.
Costs of development work and innovations: Developing new functionalities to meet business needs.
The items in the above list may vary depending on the functional needs of the company.
How does AI Commerce Cloud optimize TCO in the long term?
1. Ready-made functionalities without additional costs
The native functionalities offered by AI Commerce are available for new e-commerce platforms without separate costs. This typically covers over 95% of B2B and 99% of B2C customer needs at the time of implementation, such as tools for international sales, custom pricing, pricing rules, multi-step order management, product bundles, GDPR, review tools, FAQ tools, request for proposal functions, and much more. As a result, companies can focus on growing their business and improving the customer experience, as the functionalities included in the platform solution reduce the need for additional development, ensuring that the business can start trading and expand quickly without affecting the cost structure. Discover the functionalities here!
The freedom to choose the best tools on the market
The AI Commerce Cloud platform leverages composable commerce architecture, meaning you can add plugins to your e-commerce that best support your business without affecting the efficiency of the store. For example, choose the best search tools, AI solutions, or headless CMS systems. Forget compromises between usability and performance. AI Commerce Cloud always guarantees full scores for efficiency and loading times under 100ms. This modular structure allows you to customize your e-commerce completely to the needs of your business.
3. Integrations and maintenance are included in the price
At AI Commerce, integrations such as ERP, PIM, and CRM systems are handled without the need for external integration partners, saving both time and money. However, if desired, you can also use external integration partners, which is also possible. This freedom reduces risks and gives you complete control over TCO. Read more here.
4. Scalable and adaptable infrastructure
The choice of platform is crucial for long-term cost efficiency. Solutions based on composable and headless architectures, such as AI Commerce, are flexible and scalable as the business grows without significant additional costs. This adaptability helps the company respond quickly to changes and reduces costs associated with additional development compared to closed monolithic platforms, which can be difficult and expensive to update.
5. Automated updates and continuous maintenance
Cloud-based architecture ensures that the system is always up to date without additional manual work. This reduces the risk of human errors and keeps maintenance costs in check. In addition to cost efficiency, continuous updating helps the platform remain competitive and ensures that the business does not lag behind in the fast changes of the market.
6. Fixed monthly fee and predictable ROI
AI Commerce offers all expert services, integrations, support, and further development for a fixed monthly price. This brings predictability to budgeting and ensures that no surprise costs arise. Fixed costs help assess the ROI of the platform choice, allowing the company to make decisions that maximize returns and support business growth sustainably. A predictable cost structure also allows for better long-term budgeting, as the company can prepare for future expenses without surprises.
7. Automation reduces manual work
If seamless and customized integrations are not in place, staffing resources have to be tied up with more manual tasks, such as processing orders in the ERP system. AI Commerce allows for customized integrations to the company’s existing systems, significantly reducing personnel costs and allowing staff to focus on genuinely value-adding tasks.
8. Search Engine Optimization (SEO) built-in
Search engine optimization is a critical part of e-commerce visibility. AI Commerce includes technical SEO optimization built-in, ensuring high SEO results without separate investments in external services. AI Commerce guarantees full 100/100 points for technical search engine optimization covering all of Google's key technical SEO metrics regarding performance, accessibility, best practices, and search engine optimization. Read more!
1. Ready-made functionalities without additional costs
The native functionalities offered by AI Commerce are available for new e-commerce platforms without separate costs. This typically covers over 95% of B2B and 99% of B2C customer needs at the time of implementation, such as tools for international sales, custom pricing, pricing rules, multi-step order management, product bundles, GDPR, review tools, FAQ tools, request for proposal functions, and much more. As a result, companies can focus on growing their business and improving the customer experience, as the functionalities included in the platform solution reduce the need for additional development, ensuring that the business can start trading and expand quickly without affecting the cost structure. Discover the functionalities here!
The freedom to choose the best tools on the market
The AI Commerce Cloud platform leverages composable commerce architecture, meaning you can add plugins to your e-commerce that best support your business without affecting the efficiency of the store. For example, choose the best search tools, AI solutions, or headless CMS systems. Forget compromises between usability and performance. AI Commerce Cloud always guarantees full scores for efficiency and loading times under 100ms. This modular structure allows you to customize your e-commerce completely to the needs of your business.
3. Integrations and maintenance are included in the price
At AI Commerce, integrations such as ERP, PIM, and CRM systems are handled without the need for external integration partners, saving both time and money. However, if desired, you can also use external integration partners, which is also possible. This freedom reduces risks and gives you complete control over TCO. Read more here.
4. Scalable and adaptable infrastructure
The choice of platform is crucial for long-term cost efficiency. Solutions based on composable and headless architectures, such as AI Commerce, are flexible and scalable as the business grows without significant additional costs. This adaptability helps the company respond quickly to changes and reduces costs associated with additional development compared to closed monolithic platforms, which can be difficult and expensive to update.
5. Automated updates and continuous maintenance
Cloud-based architecture ensures that the system is always up to date without additional manual work. This reduces the risk of human errors and keeps maintenance costs in check. In addition to cost efficiency, continuous updating helps the platform remain competitive and ensures that the business does not lag behind in the fast changes of the market.
6. Fixed monthly fee and predictable ROI
AI Commerce offers all expert services, integrations, support, and further development for a fixed monthly price. This brings predictability to budgeting and ensures that no surprise costs arise. Fixed costs help assess the ROI of the platform choice, allowing the company to make decisions that maximize returns and support business growth sustainably. A predictable cost structure also allows for better long-term budgeting, as the company can prepare for future expenses without surprises.
7. Automation reduces manual work
If seamless and customized integrations are not in place, staffing resources have to be tied up with more manual tasks, such as processing orders in the ERP system. AI Commerce allows for customized integrations to the company’s existing systems, significantly reducing personnel costs and allowing staff to focus on genuinely value-adding tasks.
8. Search Engine Optimization (SEO) built-in
Search engine optimization is a critical part of e-commerce visibility. AI Commerce includes technical SEO optimization built-in, ensuring high SEO results without separate investments in external services. AI Commerce guarantees full 100/100 points for technical search engine optimization covering all of Google's key technical SEO metrics regarding performance, accessibility, best practices, and search engine optimization. Read more!
1. Ready-made functionalities without additional costs
The native functionalities offered by AI Commerce are available for new e-commerce platforms without separate costs. This typically covers over 95% of B2B and 99% of B2C customer needs at the time of implementation, such as tools for international sales, custom pricing, pricing rules, multi-step order management, product bundles, GDPR, review tools, FAQ tools, request for proposal functions, and much more. As a result, companies can focus on growing their business and improving the customer experience, as the functionalities included in the platform solution reduce the need for additional development, ensuring that the business can start trading and expand quickly without affecting the cost structure. Discover the functionalities here!
The freedom to choose the best tools on the market
The AI Commerce Cloud platform leverages composable commerce architecture, meaning you can add plugins to your e-commerce that best support your business without affecting the efficiency of the store. For example, choose the best search tools, AI solutions, or headless CMS systems. Forget compromises between usability and performance. AI Commerce Cloud always guarantees full scores for efficiency and loading times under 100ms. This modular structure allows you to customize your e-commerce completely to the needs of your business.
3. Integrations and maintenance are included in the price
At AI Commerce, integrations such as ERP, PIM, and CRM systems are handled without the need for external integration partners, saving both time and money. However, if desired, you can also use external integration partners, which is also possible. This freedom reduces risks and gives you complete control over TCO. Read more here.
4. Scalable and adaptable infrastructure
The choice of platform is crucial for long-term cost efficiency. Solutions based on composable and headless architectures, such as AI Commerce, are flexible and scalable as the business grows without significant additional costs. This adaptability helps the company respond quickly to changes and reduces costs associated with additional development compared to closed monolithic platforms, which can be difficult and expensive to update.
5. Automated updates and continuous maintenance
Cloud-based architecture ensures that the system is always up to date without additional manual work. This reduces the risk of human errors and keeps maintenance costs in check. In addition to cost efficiency, continuous updating helps the platform remain competitive and ensures that the business does not lag behind in the fast changes of the market.
6. Fixed monthly fee and predictable ROI
AI Commerce offers all expert services, integrations, support, and further development for a fixed monthly price. This brings predictability to budgeting and ensures that no surprise costs arise. Fixed costs help assess the ROI of the platform choice, allowing the company to make decisions that maximize returns and support business growth sustainably. A predictable cost structure also allows for better long-term budgeting, as the company can prepare for future expenses without surprises.
7. Automation reduces manual work
If seamless and customized integrations are not in place, staffing resources have to be tied up with more manual tasks, such as processing orders in the ERP system. AI Commerce allows for customized integrations to the company’s existing systems, significantly reducing personnel costs and allowing staff to focus on genuinely value-adding tasks.
8. Search Engine Optimization (SEO) built-in
Search engine optimization is a critical part of e-commerce visibility. AI Commerce includes technical SEO optimization built-in, ensuring high SEO results without separate investments in external services. AI Commerce guarantees full 100/100 points for technical search engine optimization covering all of Google's key technical SEO metrics regarding performance, accessibility, best practices, and search engine optimization. Read more!
A concrete example of the importance of TCO analysis
One AI Commerce Cloud B2B customer moved to the AI Commerce Cloud platform when their previous e-commerce solution required constant use of external integration partners and a separate development partner.
After the platform renewal, the customer reported a 46% annual savings in development costs and 38% faster time to market for new functionalities, as all necessary functions and integrations were handled centrally by AI Commerce Cloud.
This allowed the e-commerce business to focus on developing the business and improving customer experience while technical maintenance issues were handled centrally.
One AI Commerce Cloud B2B customer moved to the AI Commerce Cloud platform when their previous e-commerce solution required constant use of external integration partners and a separate development partner.
After the platform renewal, the customer reported a 46% annual savings in development costs and 38% faster time to market for new functionalities, as all necessary functions and integrations were handled centrally by AI Commerce Cloud.
This allowed the e-commerce business to focus on developing the business and improving customer experience while technical maintenance issues were handled centrally.
One AI Commerce Cloud B2B customer moved to the AI Commerce Cloud platform when their previous e-commerce solution required constant use of external integration partners and a separate development partner.
After the platform renewal, the customer reported a 46% annual savings in development costs and 38% faster time to market for new functionalities, as all necessary functions and integrations were handled centrally by AI Commerce Cloud.
This allowed the e-commerce business to focus on developing the business and improving customer experience while technical maintenance issues were handled centrally.
The benefits of predictability in the long term
AI Commerce Cloud's fixed pricing and comprehensive services facilitate budgeting and reduce risks, as all costs are transparent and predetermined together in advance. This enables strategic planning and resource allocation to value-adding tasks, such as entering new markets or improving customer experience.
Discover AI Commerce Cloud's functionalities in more detail here!
AI Commerce Cloud's fixed pricing and comprehensive services facilitate budgeting and reduce risks, as all costs are transparent and predetermined together in advance. This enables strategic planning and resource allocation to value-adding tasks, such as entering new markets or improving customer experience.
Discover AI Commerce Cloud's functionalities in more detail here!
AI Commerce Cloud's fixed pricing and comprehensive services facilitate budgeting and reduce risks, as all costs are transparent and predetermined together in advance. This enables strategic planning and resource allocation to value-adding tasks, such as entering new markets or improving customer experience.
Discover AI Commerce Cloud's functionalities in more detail here!
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