Discover the costs of building and managing software integrations, including upfront expenses and ongoing operational investments. Is it a necessary cost factor to face market expectations?
Software integration has become a standard practice to ensure efficient data exchange. Different technical approaches have been applied in the past, although API-based integration is clearly the way to go nowadays. But if I think about integrating software, multiple ways for execution exist. Besides integrating two software solutions through a third-party platform, there is an increasing trend towards native pre-configured integrations, where users can easily connect different solutions.
Integration via Third-Party Platform
Pros: Full flexibility, scalability with additional software solutions.
Cons: Disrupting the user journey, potential revenue loss.
Integration via Native Interfaces
Pros: Streamlined user journey, revenue potential, intuitive integration.
Cons: Less flexibility
When connections between systems are standardizable and predefined, the path through native interfaces fully embedded in software products in the form of marketplaces or app stores seems like a natural choice. However, what often gets overlooked is that each of these bilateral interfaces needs to be set up, documented, and processes like error handling and maintenance during updates need to be managed. Large teams are not uncommonly dedicated solely to ensuring functionality.
The following table breaks down the costs of a single interface between two systems.
|Amount of Work
|Design URLs, Security
|Build a Prototype
|Minimum Viable Product (MVP)
|Monitoring and Alerting
|Documentation (User-Friendly API Docs)
|Selecting Hosting and Deployment
|– Set up Servers, Load Balancing, etc.
|– Set up Continuous Integration and Testing
|Exploitation (Per Month)
|– Hosting Costs (Size-Dependent)
|– Maintenance (Per Month)
Initial Costs: Setting up native integrations within your software ecosystem comes with an initial investment. This includes the development and configuration of the integration, testing and documentation. The estimated upfront expenses can vary depending on the complexity of your project but are typically around €10,000.
Ongoing Operational Costs: After the initial setup, there are ongoing operational costs associated with maintaining native integrations. These costs can vary depending on factors such as the complexity of the integration, the number of systems involved and the level of ongoing support required.
Let’s have a look on the task and work effort in detail which is linked to the above mentioned costs.
- 1. Development and Maintenance:
- Hiring or retaining skilled developers and integration specialists to maintain and update the integrations
- Development tools and software licenses required for integration development
- 2. Documentation and Training:
- Continuously updating documentation to ensure that users can easily understand and utilize the integrations
- Providing training to internal staff and end-users for efficient utilization
- 3. Error Handling and Support:
- Allocating resources for monitoring and addressing any issues or errors that may arise during data exchange
- Providing customer support for users encountering problems with the integrations
- 4. Compliance and Security:
- Ensuring that integrations comply with industry standards and regulations
- Investing in security measures to protect data during integration
- 5. Scalability and Updates:
- Costs associated with scaling integrations as your software ecosystem grows
- Regularly updating integrations to accommodate changes in software systems or APIs
When API developers leave, organizations face several critical challenges. The top concern, as reported by respondents, is outdated documentation, which aligns with the survey’s broader findings where a lack of documentation is cited as the primary obstacle to API consumption. Another issue of significance are “Zombie APIs” – APIs without owners, oversight or maintenance, sometimes forgotten by the company. These neglected APIs can not only impact the user experience negatively but also pose security risks. Hence, it becomes evident how vital it is to ensure the continuity and upkeep of internal APIs to mitigate these risks.
Have you thought about outsourcing this big task with embedded Integration Platforms as a Service (iPaaS), which offer all this as a scaled service, allowing you to focus on your real assets?
While the upfront costs are relatively predictable, ongoing operational costs can vary significantly based on the complexity and scale of your integrations. It’s essential to budget for these costs to ensure that your native integrations continue to provide value and a seamless user experience over time.
In conclusion, native integrations offer a streamlined and user-friendly approach to software integration, but they come with both initial and ongoing costs that should be factored into your software development budget. Properly managing these costs will help you maximize the benefits of native integrations and provide a superior user experience while minimizing potential disruptions and revenue losses.
Remember: The investments you make in building and maintaining native integrations can ultimately lead to increased revenue, improved customer satisfaction, and a competitive edge in the market. So, plan wisely and reap the rewards of a well-integrated software ecosystem.