Development costs are the one-time expenses incurred during the System Development Life Cycle (SDLC) to create and deploy a new information system. These costs directly encompass the salaries of the project team (analysts, designers, programmers), hardware and software acquisition for the project, and other expenses related to the initial phases of analysis, design, coding, testing, and installation. They represent the total initial investment required to bring the system from concept to operational readiness. Once the system is installed and goes live, subsequent costs are categorized as operational or maintenance costs.

A. Service cost: This typically refers to recurring fees for third-party services (e.g., cloud hosting, SaaS subscriptions) which are part of ongoing operational expenses, not the initial build phase.

B. Maintenance cost: These are recurring costs incurred after the system is deployed to fix bugs, apply patches, and provide user support, ensuring the system remains functional over time.

C. Operating cost: These are the ongoing, day-to-day expenses required to run the system after it has been installed, such as electricity, network bandwidth, and salaries of end-user support staff.

1. Valacich, J. S., & George, J. F. (2020). Modern Systems Analysis and Design (9th ed.). Pearson. In Chapter 2, "Managing the Information Systems Project," the text distinguishes between one-time and recurring costs. Development costs are classified as one-time costs associated with the project's initiation, analysis, design, and implementation phases (pp. 45-46).

2. Whitten, J. L., & Bentley, L. D. (2007). Systems Analysis and Design Methods (7th ed.). McGraw-Hill/Irwin. Chapter 4, "Feasibility Analysis and the System Proposal," explicitly defines development costs as "one-time costs that will not recur after the project has been completed," listing salaries of the project team as a primary example (p. 131).

3. MIT OpenCourseWare. (2009). 15.516: Information Technology and the Modern Corporation, Lecture 10: IT Economics. Massachusetts Institute of Technology. The lecture notes differentiate between upfront investment costs (development) and ongoing operational costs. The analysis, design, and implementation activities are categorized under the initial investment or development cost. (Available at: ocw.mit.edu)