How much does a new intranet cost? This is probably one of the first questions your finance director will ask you.
And the answer will vary depending on the size of your company, features you need and whether you opt for a flat fee or cost per user model. If it’s a one-off purchase or subscription. You install and customise it yourself, buy it off the shelf or have external help.
However, whatever route you choose there are several things you need to consider from the get-go. These can be broken down into internal and external costs. Let’s take a look:
Internal costs
As with adopting any new technology or kick starting any project there are internal cost implications to consider that fall into the following three categories:
- Implementation costs
You will need to think about which colleagues you’ll need in the project. For how long? Will you enlist the help of departmental champions in the working group? If so, who are they and how much time do you need from them? How frequently do they need to be involved? And for what period?
- Launch costs
Successful intranets have buy-in and engagement from the start. So, you’ll need to cost-up a program of events, including a launch party, user adoption and cascade learning initiatives to help with the roll-out.
- Maintenance costs
The intranet will need a yearly budget of up to 10% of your implementation costs. This should cover the costs of who will manage the intranet once it’s live and any maintenance needed. Remember, you’re building something that will grow incrementally. It’s not a one-and-done solution. Intranets need to be continually updated.
External costs
If you choose to buy an out-of-the-box intranet, rather than build one yourself (which has its own cost-implications), you will need to research the following costs:
- Product licence costs
Is the intranet you’ve chosen priced as a flat fee or is it a cost per user model? Will it be a one-off purchase or a monthly subscription? Will the pricing scale be determined by the number of users?
Typically, for on-premises solutions, you’ll likely face upfront costs for purchasing the software licence. This is a one-time fee that grants you the right to use the software indefinitely.
For cloud-based intranets, you’ll pay a subscription fee. This can be billed monthly or annually and is often based on the number of users or the level of functionality you require.
- Professional services costs
It’s likely you’ll need to customise your intranet to fit your company’s specific needs and integrate it with your existing IT systems (such as HR software, CRM and ERP systems). If you don’t have the in-house resource or skills, you’ll need external help.
Professional service companies, like Advania UK, will charge you extra for implementation, planning and road-mapping, change management consulting and customisation. It’s worth noting, the more customisation and integration you need, the higher the expense.
- Training costs
Training your people to use the new intranet effectively and ensuring they have access to ongoing support is essential for maximising its value. Regardless of how intuitive the platform is to use, you’ll need to budget for a series of training programs, instructional materials and hiring or contracting support for a period of time.
Hidden costs
As your organisation grows and your needs evolve, you may require additional features or increased capacity. You’ll need to budget for the potential to scale your intranet or add new functionalities. Other hidden costs include:
Data Migration: Transferring data from your old systems to the new intranet can be a complex and costly process.
Compliance and Security: Ensuring your intranet complies with relevant regulations and standards may incur additional costs.
And remember, once you’ve kicked off the project any changes mid-way through will cost you more time and money.
How to keep costs to a minimum
One way to keep the intranet costs down is having a reasonable handle on what’s in and out of scope from the start.
To do this we suggest that you create an Excel spreadsheet with high level internal and external costs (mentioned above), and where possible, identify tangible savings which will help you to counterbalance the costs.
Cost/benefit analysis
Anyone writing a business case for securing a new budget will be familiar with creating a cost/benefit analysis. This is essentially a forecast that will help you tell a story about why you need the funds in a credible way. It’s about having a set of assumptions that you can validate against other data points.
For example, in your cost/benefit analysis you can forecast potential savings or even revenue generators by linking your new intranet to positive tangible and intangible business outcomes, such as:
Tangible benefit
- Reduce outlay for external licences: Introducing a new intranet means IT will no longer need to pay for licences for overlapping software, because the functionality is available in the new intranet. This will be a cost saving of £x.
- Reduce the overall cost of the intranet project by reducing data migration: By deciding at the start to only migrate the most recent content from the old intranet to the new we can reduce the cost of the project by £x.
Intangible benefit
- Improve community building in an era of hybrid work: Since Covid, the business now has hundreds of remote or hybrid workers in scattered locations, which has resulted in employees feeling isolated or disconnected. A new cloud-based intranet will provide the foundation to bind these colleagues together. Give them a place to share stories and feel connected. It will foster a sense of belonging among employees and help to build a company culture, which can lead to increased morale and productivity, as well as reduced turnover.
- Reducing content on new site will make it easier for colleagues to find information: Content on the current intranet is sprawled across the site. With limited metadata and tagging in place, the search experience is poor. Colleagues can waste up to 1.9 hours a week looking for information or documents. However, with the new AI-infused intranet, that has an information architecture structure in place, it will not only be easier for people to find information, but they will also no longer be frustrated or overwhelmed by outdated content.
Problems your new intranet will solve
When preparing your budget for a business case you should also include an overview of the problems your new intranet is going to solve. For example, if your existing intranet has limited search capabilities and the people in your business spend too much time trying to find forms, policies or information you can quantify the new intranet’s KPIs by documenting an estimate of how many hours it is expected to save per week/month/year.
Take the following example, say it takes everyone in the company 10 minutes to find the holiday form. They look for it every time they want to apply for annual leave. You have 100 employees each taking on average three holidays a year. Just looking for the form costs your company at least 6 days in lost productivity each year (10min x 3 = 30 min. 30min x 100 people = 50 hours).
Likewise, if onboarding new people is currently a lengthy process in your organisation because the documents, they need are stored all over the place and they can’t self-serve, you can calculate how much time your new intranet can save moving them from onboarding time-to-full-productivity.
Budgeting for a new intranet
Budgeting for a new intranet requires a solid understanding of both the visible and hidden costs involved. By carefully considering the expenses we’ve laid out in this blog, you can make informed decisions that align with both your organisational goals and financial constraints.
However, it’s important to remember, a successful intranet is not just about choosing the right technology; it’s also about investing in the people and processes that will make your digital workplace thrive.
For more detailed information on intranet costs, download our free eBook: Building a business case for a new intranet: Building a business case for a new intranet.