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Cost of Ownership vs Buy Calculator

Purpose

This Total Cost of Ownership vs Buy Calculator provides you with a framework for comparing the cost of building a new application to that of buying a new software or other application. The table below lists the various cost categories associated with the lifecycle of an enterprise application. The categories and items in this tool should not be taken as an exhaustive list; there are spaces within each section of the calculator to add additional costs as required.

For large screen format click to open in pop-up: Cost of Ownership vs Buy Calculator

Cost Categories

Project management

  • Costs associated with preparatory work and due diligence associated with the software adoption.
  • Includes requirements gathering, training, and evaluation.

Software

  • Software development costs in the case of building.
  • The capital expenditure of software licenses and related fees in the case of buying.

Maintenance and support

  • Cost of upgrading and administering the hardware, application, and database.
  • The support staff labor hours and costs, training labor and fees, travel, support contracts and management overhead.

Opportunity costs

  • Staff time allocated to the project.
  • Time lost to schedule delays.

Instructions

  1. Open the Buy vs Build Calculator." Fill in the appropriate values for each cost category (cells to be filled in are highlighted in white). Please note that this calculator does not account for the depreciation of capital assets.


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