Jan 12, 2015
There is a lot of variation in the prices of setting up an intranet. The differences are dependent on the size of the organization and the intranet service itself—its purpose and its role. At North Patrol, we assist our clients in finding a vendor for their intranets through a competitive bidding process. We went through all the proposals from the tendering processes we have been facilitating in 2013–2014. We compared the prices and estimated workloads, and calculated the averages. So here are the prices of building an intranet!
We hope this helps you budget for your next intranet project.
Intranets and projects tendered
The size of the clients whose intranet competitive bidding processes we have been assisting varies from a few dozen employees to several thousand. Both public and private sector organizations were present, most of them operating in Finland.
I must note that this review does not include those clients of ours who already had a supplier or a partner to build their intranet. A couple of those clients were significantly larger in size with extensive intranet concepts that were most probably more expensive than the ones included in this comparison.
In this price comparison, the intranet concept typically consisted of organizational guidelines and other common content in the form of documents and/or webpages, an internal newsfeed, and some social features like commenting on content or blogs. Most of the intranets also included workspaces or sites for projects and teams.
Some of the intranets had integrations to other systems such as operational systems, and all intranets obviously had an Active Directory integration. On the whole, though, the intranets did not have massive or complex integrations, although some of them included a degree of complexity in the form of multilanguage support. Overall, these intranets were quite straightforward and simple to build from the technical point of view.
The tenders required the vendors to complete at least the following tasks:
- plan the implementation project,
- refine the requirements specification at a more detailed level required for technical implementation,
- design the user interface and visual layout, and of course
- technically implementing and setting up the intranet including a few site/space templates, a few page templates, setting up the structure, and creating the first sites/spaces and pages.
I must point out that the prices compared here only include the estimated implementation work for the intranet but not the software licenses, no servers, nor the cloud service fees.
Neither do the prices or workloads below include the resources spent on project kick-off, intranet concept design, defining requirements, nor for the competitive bidding process. Obviously, these prices also don’t include the work done by the client itself, which would include, for example, content creation and launch communications.
The overall prices of intranets varied from 17,000 to 115,000 euros.
- It must be noted that the intranets included in this comparison were technically speaking quite straightforward. The low end of the price bracket was clearly present as some of the intranets tendered were cases in which a public sector client wanted to get the implementation of the intranet priced under the national competitive bidding limit (30,000 euros). These prices did not include software licenses, servers, or the cloud service fees (see above).
The average of the estimated workload of building up an intranet was 92 full-time workdays.
- Workload estimations in the tenders varied from 20 to almost 200 full-time workdays.
The average hourly rate in the tenders was 96 euros.
- If only the winning tenders are taken into account, the hourly rate was 99 euros.
- The highest hourly rates were around 120 euros. At the other end of the range, the rates were as low as 60 euros. It was clear that with an hourly rate that low, the tenderer was attempting to win the contract based mainly on a low price.
Issues affecting the pricing
As we can see, it is possible to build a simple intranet for a small organization with only 20,000–30,000 euros. However, when the intranet gets more complicated, the price may easily reach 200,000–300,000 euros.
The following features make implementing the intranet more complicated from a technical perspective and lead to a higher price:
- Multiple languages
- Integrations; amount and complexity of integrations
- Page, site, etc. templates; the number of different templates to be implemented
- Client-specific tailoring and other unique features
- Size of the organization; license fees are often tied to the number of users
On the other hand, the following might lower the price:
- If the vendor has a commercialized intranet product meeting the buyer’s needs
- If the buyer is a non-profit organization; most of the intranet platforms offer lower-priced or even free licenses for non-profits
- If the buyer has chosen to use SharePoint, it might be cheaper to use the cloud service, SharePoint Online from Office 365, if the standard functionalities of SharePoint are considered enough and no tailoring is needed.
Workload of the buyer
The buyer’s tasks in the intranet renewal project include e.g. the laborious content planning and creation, and of course, the implementation of the new ways of working if the intranet brings many changes to the digital working environment.
Managing and coordinating the implementation project itself, cooperation with the vendor for refining the requirements specification into a more detailed plan required for technical implementation, and the final acceptance testing are also the buyer’s responsibilities.
The estimated workload for the buyer is at least the same as for the vendor, most probably more.
Need assistance in buying an intranet?
At North Patrol, we assist our clients with the competitive bidding process: drawing up documented requests for proposals, describing the requirements for the entity to be procured, setting comparison criteria and handling the comparison of the proposals received. As an independent consulting company without ties to system vendors and technologies, we can assist clients in assessing platform products and implementation companies without bias. We have exceptionally wide-ranging knowledge of implementation partners in Finland and Scandinavia, and can suggest suitable partners for each particular need. Our area of special expertise is handling competitive bidding for public sector projects in Finland.