Understanding TCO: Beyond the Numbers
Why Real TCO Requires Conversations, Not Just Calculation
“If you want to go fast, go alone. If you want to go far, go together.”
In an increasingly connected industrial OT landscape, decisions are often driven by spreadsheets, dashboards, and simplified KPIs. But beneath the surface lies a deeper truth:
Total Cost of Ownership is not just a number, it’s a story.
A story that includes integration complexity, configuration drift, human expertise, political tension, and the often-forgotten cost of simply having customers.
Understanding the full picture requires more than a formula or a process. It demands conversations, with people who understand the systems, the context, and the long-term consequences of each decision. Yet in many organizations, these voices are drowned out by internal politics or ignored in favor of short-term gains.
Business thrives when we collaborate, share expertise, and respect experience. And while politics may always play a role, it should never override competence. Because when decisions are made without real understanding, the hidden costs tend to surface later, with interest.
The Illusion of “Free Revenue”
In many boardrooms, there's an almost sacred belief that every new customer is an inherent win. It’s baked into the KPIs, projected on growth charts, and repeated in investor calls: more customers = more success. But this mindset often fails to account for the true cost of having a customer, especially in industries driven by complex products, long life cycles, and deep integration requirements, such as in the industrial OT field.
Every Customer Is an Investment
Acquiring a customer is just the beginning. Onboarding, training, support, customization, integration into existing systems, ongoing updates, and maintaining trust, these are all resource-intensive tasks. And they scale differently than revenue does. The more tailored the solution, the greater the burden on configuration management, updates, security patches, compatibility testing, system monitoring, documentation, and troubleshooting. Each customization can introduce complexity that requires ongoing attention, specialized knowledge, and dedicated resources to ensure the solution remains stable, secure, and aligned with evolving business needs. Without a strong foundation in configuration management and change control, the risk of undocumented variations, inconsistent updates, and fractured knowledge increases exponentially. Suddenly, that “new business win” becomes a costly outlier that drains both technical and human capital, regardless of whether the customer is small or large.
When Integration Becomes a Liability
In the OT domain, integration is often sold as a strength. And rightly so, a well-integrated system offers enormous long-term benefits. But integration also locks in complexity. If handled poorly, it creates dependencies that are fragile, undocumented, or locked in the heads of a few key employees. The cost to support these systems, particularly as personnel shift or retire, becomes a ticking time bomb. This is why strong integration must be accompanied by equally strong documentation, standardized interfaces, and a living configuration management process. Otherwise, what starts as an advantage becomes a hidden cost driver.
The Silent Erosion of Margin
Companies sometimes discover too late that their most “valuable” customers are the ones silently eroding margin year after year. This erosion is often invisible in spreadsheets because TCO is rarely tracked per customer, and when it is, the methodology may be flawed or overly simplistic. Strategic decisions made solely from spreadsheets risk ignoring the nuances that only people closest to the work can provide. That’s why it is essential to go beyond the numbers and talk to people, such as product owners, field engineers, integration specialists, customer service leads. They understand where friction exists and where effort is being spent. It is only by capturing this often-overlooked insight that a company can build a realistic picture of customer value and make informed strategic decisions.
The Invisible Backbone of Sustainable Operations
In the world of Operational Technology, where systems often evolve over decades rather than years, Configuration Management (CM) is not just a technical discipline, it’s a strategic pillar. Yet it remains under-appreciated, often invisible until something breaks, and then suddenly, it’s the most important process nobody thought about.
Why CM Is More Than Version Control
Many still equate configuration management with version control or a software repository. But in the OT space, Configuration Management is much broader: it includes hardware, firmware, network settings, physical topology, operational procedures, and inter-system dependencies. In short, it defines the state of the system as it actually exists, not how it was initially installed or how it appears on a PowerPoint slide. Without accurate and updated configuration data, even simple changes can trigger complex failures. Minor upgrades can have major side effects. Troubleshooting becomes guesswork. And worst of all, the organization becomes dependent on tribal knowledge, a fragile state where only a handful of individuals know “how things really work”.
Effective CM is also a form of risk management. It enables controlled change, improves predictability, and supports rollback strategies. When systems fail (and they always do, eventually) good configuration management is the difference between a quick recovery and a prolonged crisis. It’s also essential for compliance, especially in regulated industries. Auditors don’t want to hear that “someone” changed “something” six months ago. They want records, traceability, and control, all of which CM can provide when done correctly.
The Link Between CM and TCO
Total Cost of Ownership (TCO) is significantly impacted by how well an organization handles configurations over time. Systems that are poorly documented, inconsistently managed, or riddled with ad-hoc changes tend to age poorly. They become harder to support, more prone to failure, and increasingly dependent on irreplaceable individuals. In contrast, robust configuration management practices create resilience and transparency, which reduce long-term support costs and make future integrations smoother.
Implementing configuration management isn’t just about deploying a CMDB* or buying new software. It requires a shift in mindset. Teams must be willing to document their work, follow processes, and resist the temptation of quick fixes. Leaders must support this discipline, not as a bureaucratic burden, but as a necessary investment in long-term sustainability.
* A Configuration Management Database (CMDB) is a centralized repository that stores detailed information about all components in an IT/OT environment, known as Configuration Items (CIs). This includes hardware, software, network devices, and their interrelationships. By tracking these assets and their dependencies, a CMDB helps organizations manage changes effectively, minimize risks, and maintain system stability in complex environments.
The Silent Multiplier of Complexity and Opportunity
Configuration management and integrations are often dismissed as mere technical hurdles or unavoidable nuisances needed to connect disparate systems. However, in the OT world, integration goes far beyond simple data exchange, it impacts functional alignment, risk exposure, and ultimately, business agility. When executed well, integration drives insight, efficiency, and responsiveness. But all too often, it becomes a silent tax on every process: a source of hidden costs, operational friction, and a risk that rarely appear on spreadsheets or in standard TCO calculations. This under-the-radar burden is far more common than many realize, making conversations about real costs essential.
Why OT Integration Is Especially Challenging (and Costly)
Unlike in the IT world, where APIs and interoperability are now standard practice, OT systems often originate from different eras, uses proprietary protocols, and were never designed to communicate with each other. Many of them predate modern cybersecurity standards or rely on outdated assumptions, such as physical air gaps for security, that no longer holds true.
But the real challenge goes deeper: OT systems are tightly coupled to physical processes. A misstep in integration doesn't just corrupt data, it can halt a production line, damage critical infrastructure, or even worse, put personnel at risk. The stakes are high, and integration requires not just technical skills but deep domain expertise.
From a TCO perspective, this complexity is often invisible. When done properly, integration can reduce TCO by eliminating manual work, minimizing errors, and enabling automation. But rushed or poorly planned integration introduces brittle dependencies, improvised middleware, unnecessary complexity, and future maintenance challenges. These costs and risks are rarely reflected in the initial business case, and over time, these hidden costs accumulate. A small update in one system may trigger changes across several others, not because the design was flawed, but because the integration complexity was never fully mapped or managed.
In the world of OT, integration is not just a technical concern, it is a long-term multiplier of both value and risk.
The Importance of Architectural Thinking
Integration must start with architecture, not with tools. No exceptions. Yet in practice, it’s often the opposite: tools dictate decisions, steering integration efforts based on vendor features or perceived convenience. This is a mistake, and an expensive one. Tool-driven decisions may offer short-term wins, but they create long-term costs in the form of brittle integrations, limited flexibility, unnecessary complexity, and poor maintainability.
Before any decision is made, it's critical to understand the complete system landscape:
How systems interact,
Where data flows,
and what the real operational dependencies are.
And this understanding doesn’t come from spreadsheets or software catalogs. It comes from talking to people: engineers, operators, and system owners, the ones who live, develop and support the system every day, every week.
Architecture is what makes integration sustainable. Tools must follow architecture, not lead it. Anything else is a liability.
Integration as a Strategic Enabler
Ultimately, integration is not a one-time event, it’s an evolving capability. As business needs change and technologies evolve, the ability to plug in new systems, retire old ones, and adjust workflows becomes a competitive advantage. But only if the foundations (architecture) are sound.
Integration, like configuration management, is as much about people, process, and discipline as it is about code and configuration parameters. It’s not just a technical task, but a strategic investment, one that directly impacts the cost, quality, and agility of the business over time. This is why integration plays a central and often underestimated role in the true Total Cost of Ownership (TCO) calculations.
Conclusion
As the title suggests, to truly understand Total Cost of Ownership, we must look beyond the numbers. We need to understand the system, not just in diagrams or spreadsheets, but in its real-world complexity. That understanding begins with solid architecture. But architecture alone is not enough.
What matters just as much, perhaps more, is that we start talking to each other.
Effective integration and configuration management require the involvement of all relevant stakeholders. Not just IT and OT, but operators, engineers, supply chain, legal, business owners, product owners, directors, sales teams, and yes, even executives, including VPs. Everyone who influences or is impacted by the system must be part of the conversation. Because TCO isn’t simply a financial metric, it's a reflection of how well we collaborate, align, and make decisions together.
And those decisions must, of course, happen at the right level. Decisions should be made by the people who have the context, the competence, and the accountability to do it wisely. That’s how we reduce hidden costs, avoid friction, and build systems that are sustainable, adaptable, and truly fit for purpose.
TCO isn’t just calculated, it’s earned.
Through clarity. Through architecture. Through conversation.
Together, we can achieve true cost efficiency and lasting, sustainable value.