When looking for the right intranet solution for your business, price is a major factor – and likely to be one of the first questions on the management checklist. So how much does an intranet actually cost?
The short answer is, “it depends”.
It can be tempting to opt for the cheapest solution upfront, without considering the overall financial impact for your business – whether that be positive in terms of returns, or negative in terms of upfront investment, sustainability and long-term running costs.
Before committing to any project, therefore, it’s important to fully understand both the upfront and ongoing costs involved. Ensuring benchmarks are in place to measure return on investment will also determine whether that cost is justified.
Given the number of variables involved in selecting the right intranet solution, this can become a daunting task. Failing to do your homework can throw up some nasty surprises and awkward conversations when unexpected costs arise that haven’t been accounted for.
More than two-thirds of major projects face cost overruns.
Don’t let your intranet be one of them. To ensure you have all your bases covered, we explore the different points that have potential to impact upon the cost of your intranet. By asking the right questions internally or of your vendor, you can be confident of providing a realistic estimate when putting forward your intranet business case or reviewing options that come through at tender stage.
Start with the end in mind: determine your intranet objectives
How much your intranet solution will cost depends heavily on what it is you actually expect your new software to do. Those looking for a fully integrated business collaboration solution can expect to invest a great deal more than those looking for a quick win internal communication platform, for example.
The process of identifying and prioritizing all intranet stakeholder requirements is addressed more fully in our Planning and Deploying a Successful Intranet guide. However, it’s important to highlight the importance of auditing and prioritizing these before going ahead with your vendor selection process. Once product features lists start dropping onto your desk, it’s easy to get blindsided by potential – and lose sight of actual needs.
Cross-departmental collaboration is vital to get the full picture. Identify and speak to all stakeholders – not only those who will have a final say in the decision making process, but your day-to-day users. What do they need your new intranet to do? What business challenges are you looking to overcome?
The answers to these questions will underpin the structure and requirements of your solution – and determine the cost. Example intranet goals may include:
- Reduce paper-based admin processes to improve efficiency and empower employees to self-serve
- Centralize all company information and improve access to the ‘collective intelligence’ of your organization
- Improve employee engagement, morale and retention
- Facilitate greater collaboration, break down silos and remove duplication of effort
Each goal can be achieved by using different intranet features or functions.
By creating a comprehensive list of needs, you can be confident you’re not overpaying for a complex system overloaded with features no one will use – or purchasing something generic that doesn’t meet basic requirements, and will deliver no return on investment due to a lack of user buy in.
Cloud vs. On premise intranet solutions
Traditionally, intranet solutions have focused primarily on in house deployments, particularly in more risk adverse industries where concerns about security and control are prominent, such as the financial sector.
However, an in house intranet project demands associated infrastructure and hardware. Many intranet systems place considerable burden on internal servers that will require upgrading, licencing or replacing – particularly in larger organizations.
Installation requirements and in house maintenance, support and general running costs such as electricity also carry a price tag, alongside an increased demand on IT or even the requirement for dedicated in house resource. Essential work or unreliable infrastructure also results in server downtime, with associated impact on staff accessibility and productivity – and, according to a report by IHS, potentially huge cost.
“The cost of ICT downtime is substantial, from $1 million a year for a typical mid-size company to over $60 million for a large enterprise…an average cost of $5600 per minute.” (Sources: IHS Markit and Evolven)
While many thought leaders in the field admit a 100% uptime guarantee isn’t achievable, partnering established, leading cloud hosting providers with the necessary infrastructure and security certifications can minimize risk – and cost. Partnering AWS, Interact has successfully delivered 99.99% server uptime in the last 12 months. Furthermore, cloud solutions offer seamless updates, minimizing the resource and cost burden of manual updates by IT staff.
To futureproof or scale your in house intranet, deployments will also need dedicated budget for upgrades and development. It is important to account for all these costs when considering an in house intranet project, in order to determine the total cost of ownership.
The global growth of the cloud market and an increase in globally or remotely dispersed workforces has seen a trend towards software-as-a-service (SaaS) intranet solutions, hosted in the cloud.
As a more flexible and scalable solution, cloud based intranets typically offer a more cost effective and sustainable answer for many organizations. Removing the requirement for infrastructure and internal resources, cloud- based solutions typically have lower occurrences of downtime and fewer open support tickets compared to on premise. Updates and upgrades can be rolled out remotely and instantly, limiting impact on business operations.
The result is a lower total cost of ownership due to reduced upfront investment, minimized demand for resource in terms of maintenance and day-to-day upkeep, and the transferral of upgrade and update responsibility to the cloud vendor.
Aside from cost savings, cloud based solutions also promote financials gains for organizations. Accessibility regardless of location or device, alongside an enhanced user experience, promotes employee use and productivity. 23% of Interact user activity occurs outside of hours, and this is increasing: the demand for an ‘always on’ workplace IT infrastructure is vital for long term business growth strategy.
When considering hosting options for your intranet project, ask these questions:
- Will we need an in house or cloud based intranet solution?
- What upfront investment will be required in new infrastructure and hardware?
- Is there an associated cost for storage, upkeep and licensing of new hardware?
- Could my chosen solution impact existing systems, such as servers that will need replacing or upgrading?
- Do we need dedicated in house resource for the IT management and maintenance of our intranet solution?
- What are the risk and financial implications of server downtime for our business?
- Is our hosting solution scalable as my business grows?
Build vs. buy
If you have limited internal developer resource, it’s unlikely the option to build your own intranet will arise. But for those larger organizations with the internal skillset to rise to the challenge, it may appear an attractive option to utilize existing resources and build a tailored solution that will supposedly satisfy all your unique business needs.
It’s a decision that goes back again to your requirement list, CIO.com advisor Chris Doig argues:
“A rational build vs. buy decision starts with well-defined requirements. Then potential products are evaluated to measure how well they meet those requirements.”
However, the reality for many, Doig continues, is that internal resource can never meet that of an external specialist, resulting in some requirements never being met. What’s more, if those individuals aren’t experienced in intranet software, they may not fully understand the problem domain – or have the ability to identify unknown requirements. The process of building, therefore, carries a high level of risk.
As a specialist provider yes, hands up – we may potentially have a degree of bias. However, the questions are still relevant. If not executed correctly, an intranet platform will require continual re-investment, development or even complete replacement, which will prove expensive and disruptive in the long run.
In addition, utilizing internal developer resources carries its own degree of risk; custom coding, lack of documentation and employee turnover may result in poor software or an unsustainable platform that can’t be updated or evolve with the business. In our experience, it’s far cheaper, faster and more effective to buy rather than build. While the initial cost may look bigger on paper, the accumulative costs associated with building are far greater – and will be felt for far longer.
Out of the box vs. customized intranet solutions
It follows one of the key arguments of the build vs. buy dilemma: how do I ensure my chosen intranet solution meets my unique business needs, and what will it cost me? If you’ve opted for a buy solution, those “unique needs” may come at additional cost for customization.
If you’ve already determined your list of stakeholder needs and intranet requirements, it’s easier to map out the potential cost. Many commonly required features are available ‘out the box’, such as integration with cloud storage, a staff directory or social collaboration tools such as blogs and timelines. Depending on the number of ‘core’ features you require and the intranet provider you select, there may be different levels of packages available.
If you have a ‘unique’ requirement, our first bit of advice is to do your research. Intranets are not a new concept: there’s a chance someone else has had your challenge before and the solution may already be available. Look at different vendors’ offerings and see if any core features can align with what you’re looking for.
Ask yourself the question, “does this problem really need to be answered by my intranet, or could a different application do the job better?” In a drive to simplify, we sometimes ask too much of a single application – and an all-singing, all-dancing intranet can prove costly and time consuming to develop. What’s more, complex customizations are far more prone to issues: becoming a ‘jack of all trades’ can often translate into ‘master of none’.
The good news that with integration functionality, many intranets can work harmoniously alongside existing, specialised business platforms – such as Workday or SharePoint. If you already have software and established processes within your business, there probably isn’t a need to customize or develop your intranet solution to replace them.
If you’ve asked those questions but still have a business need not addressed by any out of the box intranet solutions, detail the request fully as part of your intranet RFP or tender process. Customization comes at a cost, but the more information you provide, the more likely your quote is to be accurate and achievable.
Intranet strategy, project management and launch services
If there’s anything the consideration of cost variables shows, it’s the potential depth and complexity an intranet project can have. Having the correct professional services support to maximise the success of your intranet is a corner too many organizations choose to cut: but ironically, choosing to save money in this area can prove far costlier in the long term.
“Any software project represents a major investment and impact for a business”, remarks Kelly Freeman, Intranet Strategist.
“Ensuring that software is delivered successfully and mitigating risk is vital to protect your investment and guard against project failure. Too often, companies dive in head first, launching without a proper plan. It’s this ‘act now, think later’ approach that can cost you far more in the long-run.”
An intranet can’t simply be purchased and switched on. As part of your investment, it’s vital to consider who will hold responsibility for key stages of the process including:
- Researching, defining and setting business objectives
- Setting governance boundaries
- Defining roles and responsibilities
- Information architecture: the structural design of your intranet
- Branding: making your intranet, YOUR intranet
- Technical implementation: spanning installation, data imports, disaster recovery, integration and more
- Knowledge management: creating a culture of sharing knowledge
- Engagement and internal launch process
- Training of internal intranet owners, contributors and users
- Analysis and ongoing refinement
Even with dedicated resources within your organization to support the roll out of an intranet project, this wide scope of planning, designing, implementing and launching an intranet platform can hugely benefit from experienced specialists alongside your internal team. As a complex process, it also typically needs dedicated project management resource.
Whether this comes through the deployment of existing internal resources (and, potentially, the loss of their productivity elsewhere in the business), recruiting new internal resource, outsourcing to a third party project manager or as part and parcel of your intranet supplier’s specialist services, it’s an additional cost to consider. The level of services and support you require will depend on your business and what you’re looking to achieve from your intranet.
What’s more, support shouldn’t end at the launch. In order to ensure your intranet continues to evolve with your business and deliver on your goals, reviewing and analyzing its performance is vital. Failure to continue investing in your intranet may cause it to date quickly and stop serving its purpose – with a resulting drop in user engagement.
Yes, services come at a price. However, given the considerable financial and resource investment that goes into an intranet, the cost of failure is tremendously high. Our advice? Don’t underestimate the importance and value of investing in professional services for your intranet project – and ideally, source a supplier who integrates this into their offering, giving you peace of mind…and a manageable cost.
Support and Maintenance
Technology fails. Even the greatest developers in the world can’t claim to be flawless and impenetrable, and failures can be as minor as a button not clicking through to the right page or as severe as a disaster recovery situation of complete system failure.
Managing and mitigating risk is a major consideration of any IT software project. Ensuring your business has access to the necessary support to address issues when they arise is key to not only keep your intranet up and running, but maximizing its return. When systems are full of glitches or repeatedly fail, the negative user experience has an effect on adoption rates – costing you that all important ROI.
Support and maintenance may be managed internally or as part of your intranet service provision, depending on your needs; it’s important to gauge the level of resource required. An out of the box intranet with less than 100 employees that is used primarily for internal communication purposes will require a different level of support than enterprise level platforms that integrate with all core business applications and exceeds 5,000 employees, for example. Outsourced IT support is generally considered more cost effective than in house, and an intranet support system is no different.
When considering budget allocation for support and maintenance, look to the role your intranet will play in your business – and the consequences any downtime or support ticket issues will have. For an intranet system serving employees globally and providing access to critical business systems, 24/7 support may be essential – and not necessarily a realistic function to host in house.
Employing the skillset to understand and manage your particular intranet software also comes at a cost; in our guide looking at SharePoint as a prospective collaboration platform, we highlight that the average salary for SharePoint specialists is £50,000 in the UK, and $75,000 in the US (much higher for professional services day rates). The average sized SharePoint support team is two people: a potential cost of £100,000/$150,000 annually to your business. If specialized support can be offered by your provider at a reduced cost, it’s worth considering.
Intranet updates and upgrades: keeping your intranet relevant
Given the fast paced nature of technological development, it’s also worth remembering that your intranet will date – and the needs of your users will change.
Ensuring your systems continue to have the functions you need will require regular updates and developments, especially if your intranet integrates with other business applications that have their own updates. Writing for ZDNet, David Gewirtz argues that “upgrade, no matter what” must be the mantra for the tech industry – failure to keep updated can have potentially dire consequences.
If you’re making a one off purchase of an out of the box, on premise piece of software, options for upgrading will be more limited and come at a cost. If your business opts for a subscription based SaaS solution for your intranet, you may find that regular upgrades, updates and new features will come as part and parcel of your subscription.
To futureproof your intranet and realize its full potential, consider the costs associated with keeping it relevant and up to date.
The cost of not having an intranet
So you’ve broken down the different cost elements, spoken with different vendors and you have an idea of what your intranet may cost – but it’s been met with a resounding ‘NO’ from the top table. What happens now?
It’s not uncommon for those holding the purse strings to scan proposals and focus exclusively on the grand total at the end. In this instance, it’s worth looking at the value of your intranet in reverse and using that to speak their language: in other words, compiling the cost of not having an intranet.
This involves looking at the goals and objectives you have set out for your intranet project and assigning a business value to those not being achieved. For example, if your intranet could improve staff retention by just 1% due to an increase in employee engagement, let’s consider that from a financial perspective.
A report by Oxford Economics argues replacing an employee incurs costs amounting to £30,614 / $38,138 in lost output and hiring costs. Assuming a business has 1000 staff and retention improves by 1%, that is 10 employees retained; totaling £306,140 / $381,488 saved.
If this is just one of the objectives or goals set for your intranet, the cost of not implementing will soon add up – adding financial value to your business case.
So… how much does an intranet cost?
There is no black and white answer.
As a complex and large scale software project, an intranet can have many variables impacting cost: from the number of users in your business to hosting, provider, features, customization, support, services and more.
Evaluating risk is key. An intranet typically represents a minimum 3-year strategic choice that needs to match the organization’s visions, plans and objectives. Vendors must demonstrate that they can not only match your requirements, but protect your investment during that period and beyond. Maybe they offer some neat features now – but will they still be in existence in 3 years? Will they grow and evolve with your business, or do they face investment limitations and could end up static?
The cost of having to replace 1 year in because you didn’t fully evaluate and mitigate the risks can prove hugely damaging to business.
The key is to go into a project with eyes wide open and a full understanding of where both the costs and risk factors lie. Compiling a comprehensive business case and defining the goals of your project, and then measuring success against those objectives, can help justify upfront cost and show return on investment – as well as future proofing your intranet and reducing risk.