Why bother?
What the calculator does
The Setup Page
The Costs Page
The Benefits Page
The Results Page
Saving your results
Credits

Why bother?
For many people, the process of measuring the cost-benefits to be obtained from introducing an intranet is one that, with any luck, can be avoided. After all:

• "there are so many intangibles, it's impossible"
• "the benefits of an intranet are so obvious, there's no point"
• "an intranet is so cheap to set up that there's no requirement to justify it"
• "the figures are far too complex to calculate"

If you look at some of the articles listed on the Links Page, you'll see that there is plenty of support for avoiding the issue altogether. So why did we decide to create this Cost-Benefit Calculator?

• because even relatively intangible costs and benefits can be measured if you are prepared to approximate
• because the benefits of an intranet may be obvious to you, but not necessarily to your senior managers, upon who's commitment your intranet will survive or perish, nor to the majority of potential end users who feel they are already overburdened with information and systems to manage it
• because the up-front direct costs of an intranet may be relatively low, but the human costs of setting it up, populating it with content and then maintaining that content are considerable
• and because, with the Cost-Benefit Calculator, someone's already done the hard job for you of working out the arithmetic!

Many will question the feasibility of a generic calculator, designed to meet the needs of all types of organisation. They may have a point. However, we have done our best to think of a broad range of possibilities and leave it to you to adapt the tool to your needs. To make this possible, all the elements in the calculations are configurable.

To get started, select Setup from the menu on the left hand side of the screen. If you're the sort of person who likes to find out what's going on before they start, read on.

What the calculator does
The calculator produces a wide range of reports based on the input you provide. This input is gathered in three steps:

1. Setup: collects information about you, your organisation and the uses to which you anticipate your intranet will be put
2. Costs: collects information about the likely capital and revenue costs required to implement and maintain your proposed intranet
3. Benefits: collects information about the benefits which you are likely to obtain from each of your main intranet uses

Every input field contains a default. These defaults are a guess on our part, designed to give you a starting point, but they are not a substitute for careful thinking and maybe even research on your part. Small changes to individual input fields can produce major differences to the results, so take care. Of course, one strategy would be to stick largely with the defaults, see the results and then go back and refine the data. You can go back and forwards between data gathering and results as often as you like - and, if our experience is anything to go by, this is likely to be a lot of times.

Note: none of the data that you enter is saved, either to the web server or to your local drive.

The Results Page, allows you to select from four reports, each available in both tabular and graphical format. The first two reports are simple summaries of costs and benefits. The third report shows the costs and benefits as they would impact on the organisation's profit and loss account (allowing for depreciation of capital expenditure) and the final report shows the return you will obtain on your up-front investment.

Finally, we have incorporated a Links Page, to provide you with access to the various articles and reports which have helped us in creating this tool.

The Setup Page
The Setup Page collects information that is needed to identify you and your organisation and core data required in calculating the results. The calculator distinguishes between your organisation as a whole and the 'area to be analysed' - these may be the same thing, but the distinction will be necessary when the intranet is being introduced or extended to just a part of an organisation.

You are provided with a checklist of seven major areas of intranet usage. The first of these, Information Publishing, is likely to apply to every intranet, but the extent to which the others are applied will vary enormously. Select from these uses carefully, because your input to the Costs and Benefits Pages will be restricted to those areas that you have chosen.

The Costs Page
The Costs Page collects information about the costs associated with the introduction and ongoing maintenance of your intranet. A distinction is made between 'capital costs', the investment in hardware and software that is likely to be borne from your organisation's capital budget and written off over a number of years, and 'revenue costs', charged to your organisation's normal annual expense budget. There is also a distinction between 'start-up costs', the one-off costs required to get the intranet up and running, and 'ongoing costs', required each year to maintain the intranet.

It is assumed that the cost of web servers and intranet software applications, and the technical team required to support them, will be carried by your organisation as a whole. If the area you are analysing is not the whole organisation, then your share of these costs will be in proportion to the size of your target population.

Much of the information required to complete the costs page is of a technical nature. If you are not a technical person, you will either have to accept the defaults or seek some help from your IT department.

The Benefits Page
The attention now turns to benefits, which are analysed according to the seven categories of intranet use as defined on the Setup Page. In each case you can specify the proportion of your target population that will be affected by the particular intranet use. Benefits fall under three main headings:

1. Direct cost savings: savings in expenditure other than labour - print, paper, telephone, travel costs, etc. - that can be directly attributed to the introduction of the intranet.
2. Labour savings: savings in the amount of time required to carry out tasks as a result of introducing the intranet, usually expressed in minutes per person per day (which the tool then scales up to an annual overall time saving and multiplies by the average salary within your target population).
3. Productivity benefits: increases in output per person attributable to the intranet, expressed as a percentage. Because personal productivity has such a wide range of implications from organisation to organisation, the tool converts them to simple labour savings. The actual effect of productivity increases, such as increases in sales, could well be much larger.

All of the benefits that you specify are calculated for a single, complete year, although you will be asked to specify how these benefits may be reduced in the first year of implementation. To simplify the calculations, it is assumed that all of the intranet uses are implemented simultaneously rather than over a period of time and that benefits are constant after the first year.

The Results Page
Every time you go to the Results Page, the figures are re-calculated to reflect your latest inputs. You can choose to see the figures spelled out in tabular form or presented as charts. Four reports are available:

1. Summary of costs: this lists your expenses against each of the major categories, separating costs borne by your organisation as a whole and costs applied just to the area being analysed.
2. Summary of benefits: this lists the annual benefits by category of intranet usage and benefit type.
3. Profit and loss by year: this shows how costs and benefits would be applied to your organisation's profit and loss account. Capital costs, both up-front and on-going, are written off over the number of years that you specify. Revenue costs are applied to the year in which they are incurred. Benefits are assumed to be the same every year, except year one, to which a scale-down factor is applied.
4. Return on investment by year: this takes your initial investment, both in capital and revenue costs, and demonstrates the percentage return that would be made on that investment in each of the first five years. In contrast to the profit and loss report, capital costs are written off as they go. The report also shows how many months it would take for your initial investment to be completely recovered.

Saving your results
At present, there is no facility within the tool to save your results to disc in order to work on them at a later date. This may come, either built into the tool or in the form of a separate spreadsheet version. In the meantime, you will have to make do with printouts. All of the tabular results are designed to print well on A4 paper. The charts are a problem as not many browsers will print the output from Java applets (which is what we use to create the charts). Internet Explorer 4 does the trick, the others don't. In future versions we will try to alleviate this problem; for now you could just print the whole browser window (press Alt + PrintScreen, then paste the contents of the clipboard into a word processing or graphics package). To keep a record of your inputs, use the browser's print facility to print out the Setup, Costs and Benefits Pages in turn.

Credits
The Intranet Cost-Benefit Calculator was developed by Clive Shepherd. If you have any comments or suggestions about the tool, please address them to clives@fastrak-consulting.co.uk.