ServiceNow Integration Total Cost of Ownership: How to Accurately Calculate the TCO

ServiceNow integrations total cost of ownership (TCO) can be difficult to accurately quantify.

Measuring TCO goes beyond simply comparing the integration solution’s purchase price or implementation costs and its ROI. 

When integrating business-critical systems like ServiceNow, the costs of ongoing maintenance – or even amending a botched implementation – are significant.

Downtime affecting the integrated systems adds to technical debt and carries both quantifiable costs (such as development hours), and more abstract costs such as reputational damage and customer dissatisfaction. 

What Influences ServiceNow Integration Total Cost of Ownership? 

ServiceNow integration total cost of ownership is most significantly influenced by the integration method. Choosing the wrong type of integration for your organization’s requirements will lead to sunk costs and may require investment to replace the integration entirely.

So before implementing integrations, organizations must weigh the pros and cons of available integration methods to understand which integration solution best suits their needs.

However, the issue is that initially, some integrations seem more cost-effective, and only after the implementation process is complete do the hidden costs surface. 

For example, pre-packaged and custom-built API and Web Services-based integrations can seem cost-effective initially, but as use and data volumes scale, they degrade ServiceNow’s performance. This leads to a myriad of issues that add to technical debt, including delayed reports and time-to-resolution, frustrated employees and dissatisfied customers. 

And as the IT stack becomes more complex with newly added tools/apps, it becomes highly challenging to maintain these integrations, giving rise to several hidden costs.

Over time, these hidden costs increase, making the technical debt increasingly difficult to “pay down.”

Other factors influencing ServiceNow integration total cost of ownership include: 

Implementation costs

The cost of implementing a ServiceNow integration is not just limited to purchasing the software. A significant portion of ServiceNow integration total cost of ownership comes from activities such as:

• Development hours for implementation: If the integration demands custom coding or complex configuration, the lengthy development hours can increase the TCO. Business leaders must account for the hourly wages/salaries of the team(s) involved.
• Third-party services: Organizations might need to hire third-party consultants or service providers if the in-house team lacks the expertise to implement and manage complex integrations. The consultancy fees add to the TCO. 
• Testing: Integrations must be adequately tested under multiple conditions to ensure desired efficiency, functionality, and reliability. On average, organizations must dedicate 100 hours to QA & Testing. Extensive testing phases can be time-consuming and resource-intensive and the cost of labour to facilitate testing should be factored into the TCO.
• Delayed time to value: Planning, developing, testing, and implementing a ServiceNow integration can take around 470 business hours or longer. Unexpected delays in the integration implementation increase the financial burden significantly. Besides delaying the time to extract value from the integration, it increases project management and resource allocation costs, promotes poor decisions based on obsolete/inaccurate data, and delays advanced business initiatives.

Ongoing maintenance requirements

Once the integration is live, organizations must invest in its ongoing maintenance to ensure optimal performance. The costs of maintaining the integration include ongoing exercises that fuel the ServiceNow integration total cost of ownership:

• Development hours for maintenance: Similarly with implementation costs, teams must also factor in the costs involved in maintaining the integration over time (troubleshooting, bug fixes, updates, etc.).
• Continuity through ServiceNow upgrades: Custom-built and iPaaS integrations are reliant on API and web services to initiate data transfers. However, upgrades to the platform can break these integrations, meaning that the integrations themselves have to be re-worked, or re-built entirely to maintain continuity through ServiceNow upgrades. 

The cost of integration failure

Poorly implemented integrations that involve patch fixes might fail due to the inability to handle bulk data volumes or deliver the required throughput. An integration failure primarily denotes incomplete data transfer, leading to several costs:

• Sunk costs of the wrong integration approach: Business leaders need to map out business needs and technical requirements, plan how the ServiceNow integration will work, and weigh the pros/cons of different integration methods to avoid choosing the wrong integration solution. Over time, such poorly selected, evaluated and optimized integrations become a huge sunk cost for the organization, demanding a complete integration redesign and adding significantly to the TCO.
• Technical debt incurred while fixing the integration: Implementing patch fixes instead of redesigning or rectifying the integration invites significant technical debt. As IT teams spend hours fixing technical debt issues, these costs far outweigh the cost of redesigning the integration.
• Cost of data loss and recovery: Poorly implemented custom integrations often risk endpoint outages or transfer timeouts. Consequently, organizations might lose crucial data that didn’t reach the desired source. While ServiceNow provide data backup and recovery capabilities out-of-the-box, they are limited in a number of key areas. For example, instance downtime is required to recover data and backups are only retained for 14 days. This means further investment is required to recover data that falls outside of the scope of ServiceNow’s OOTB backup and restore.
• Poor data quality: Often, integration failures remain undetected for hours, driving up the costs of recovering missing or inaccurate data. Not only do teams have to spend endless hours troubleshooting, but inaccurate data also leads to faulty reports and bad business decisions. 

Training staff to work with newly implemented integrations

• Cost of training: Introducing a pre-packaged or custom-built integration also requires training the staff that need to make use of said integrations. The extent of training required can vary, as well as the skillset required to use the integration. Packaged integrations typically ship with a graphical user interface (GUI) which can help the process, but training is still required. Integrations that require command line interface (CLI) experience can isolate business users.
• Staff turnover: If the developers or team members handling the integration leave the organization without formally and comprehensively documenting processes and technology involved in facilitating the integration, it becomes very challenging to maintain integration continuity. Organizations options for replacing departing developers are limited to developers with the required skillset. The organization must also train new recruits to work with the integrations and invest in ongoing training to help them gain specific skill sets needed to maintain and support the integration. 

Limit the TCO of ServiceNow Integrations with these Three Steps

Building and implementing ServiceNow integrations is a challenging process that requires ongoing maintenance and support. Organizations can avoid the issues mentioned above by meticulously planning the integration:

Plan and map out the integration requirements with a business goals-driven approach

The goal of implementing ServiceNow integrations is to deliver value-based outcomes and increased efficiencies. Simply connecting two systems cannot be the goal of the integration as this approach can lead to oversight. For example, if improving data availability and enabling self-service access to integrated data is the goal, then an integration that degrades ServiceNow’s performance and requires development experience to use will not help the organization achieve their goal.

Thus, organizations must take a business goals-driven approach and outline:

• The purpose of integrating ServiceNow with an external system
• The key business objectives that the integration will support
• The pain points that the integration will address/processes it will improve
• The integration outcomes vs. the maintenance costs 

Identify and involve the relevant stakeholders

Before implementing an integration, business leaders must identify the relevant process owners, administrators, and other stakeholders from ServiceNow and third-party vendors supporting the integration. These stakeholders can help outline and highlight the integration’s needs, outcomes, and support requirements by thoroughly assessing system capabilities and identifying limitations (e.g., performance load, middleware needs, etc.) before progressing to technical design. 

Choose the right integration approach

The next step to limiting the TCO of your ServiceNow integration is to choose the right integration approach based on the business requirements.

For instance, the initial integration planning and mapping phase highlights an insufficient budget for building an in-house, custom integration – but the budget is sufficient for integration maintenance. In such a scenario, the organization could consider pre-built iPaaS integrations to save on development requirements and costs during the implementation phase. However, it is essential to consider that diligence in maintaining the integration via a formalized process is vital in limiting costs associated with developer turnover, platform upgrades, and performance impacts. 

Without strong confidence in the ability to maintain the integration over time, a native IaaS solution is the recommended approach. Native integration solutions that deliver integration-as-a-service (IaaS) are the best option for organizations dealing with growing data volumes, requiring high throughput and availability, and for organizations with limited resources for integration maintenance.

How Integrations-as-a-Service Limits TCO and Benefits the Organization

Integrations-as-a-Service (IaaS) describe integrations that are delivered and maintained by integration experts as a managed service. Cost of implementation and maintenance are factored into the subscription price, so the organization is aware of exactly how much the integration will cost, with no additional hidden costs. 

As they are delivered by experts, IaaS integrations deliver a faster-time-to-value and the likelihood of a botched implementation is limited.

ServiceNow, IaaS Integrations from Perspectium

Developed by the founder of ServiceNow, David Loo, Perspectium delivers integrations-as-a-service that eliminate the need for dedicated internal resources to implement or maintain the integration. As a fully-managed service, all maintenance costs are factored into the subscription with no hidden costs. Since customers always know what they are paying, it promotes better budgeting and resource allocation.

Instead of using web services or API calls, Perspectium solutions leverage push technology and a sophisticated message broker system (MBS) to reliably connect ServiceNow with external systems without risking data loss or performance degradation associated with API/web services-based iPaaS solutions. 

The Perspectium architecture uses a secure, encrypted, cloud-enabled message broker system to queue data transfers. This clever design insulates customer organizations against system failure-related data loss. 

So, even if a target system goes offline during the transfer, data is not lost – the data waits securely in the cloud-enabled queue, and the transfer resumes where it left off when the system is back online. 

Additionally, since the target receives the data from the MBS – and not directly from ServiceNow – the Platform’s performance remains intact.

The fact that ServiceNow themselves use and endorse Perspectium proves its capability in handling complex integration requirements and massive data volumes. 

Perspectium integrations replicate data from 10 production instances of ServiceNow into 4 SAP/HANA databases for analysis by Sales, Marketing, Finance, and other departments.

Transactional data transfers feed 200+ dashboards and five predictive solutions in the big data environment. Production data alone accounts for about 20 million transfers per day – from more than 600 individual database tables. 

And of course, this all happens without negatively impacting ServiceNow’s performance, thanks to the highly efficient Perspectium architecture.

Calculate the TCO of your ServiceNow integration with Perspectium’s TCO Calculator 

Calculating the TCO of an integration method is a crucial part of integration planning and implementation. Try our integration TCO toolkit to compare the cost of using Perspectium with other available solutions to make the right decision, the first time.