The full cost of productivity software across five stages, from purchase to exit

A business productivity software cost guide must map the full cost of productivity software across five stages, from purchase to exit. That wider boundary stops a low subscription line from hiding staff effort, extra controls or a difficult migration later.

This approach suits an England-based organisation. Figures come from dated supplier evidence and the buyer's own records. Finance and tax advisers should approve VAT, exchange-rate and accounting assumptions before a decision.

What to take away

Set the costing rules

Choose a contract horizon and express every option over the same period. Record pounds sterling as the reporting currency, the exchange-rate source for foreign invoices and whether lines are net or gross of VAT. Keep cash paid separate from VAT expected to be recovered.

HMRC's VAT rates page states that the standard rate is 20% for most goods and services. Application and recovery can differ with the supply and customer. HMRC also requires evidence and valid invoices for eligible claims in its input-tax guidance. Ask the organisation's adviser to determine the actual position.

Capture five cost stages

Investigation. Include workflow analysis, demonstrations, trial administration, security and privacy review, and procurement work. Add legal advice. These hours occur even if no purchase follows.

For a 200-seat shortlist, typical effort runs 40 to 80 internal hours. At a loaded £45 an hour, that is £1,800 to £3,600 before any purchase.

Acquisition. Enter the product, plan, billable unit, minimum commitment and add-ons from the supplier's dated record. Record the tax convention and payment timing there too. Note discount expiry rather than applying a promotional rate indefinitely.

Listed UK prices as of early 2026, excluding VAT, include Microsoft 365 Business Standard at about £10.50 per user a month and Google Workspace Business Standard at about £11.10.

Slack Pro is listed at about £6.30 per user a month, Zoom Pro at about £11.99 per host a month, and Asana Starter at about £8.50 per user a month. Notion Plus is listed at $10 per user a month billed annually.

Change. Estimate configuration, integration, data cleaning, migration and reconciliation. Add accessibility checks, training and temporary parallel running. Separate supplier fees from internal hours.

A 200-seat deployment typically needs 200 to 500 internal hours, or £9,000 to £22,500 at £45 an hour. Supplier onboarding often adds £2,000 to £10,000. Microsoft 365 FastTrack provides free deployment assistance for eligible plans of 150 seats or more.

Operation. Budget licence changes, administration, access reviews and help. Add integration monitoring and incident preparation.

The NCSC's secure SaaS guidance shows that customer work continues after a hosted service is bought. Ongoing administration often consumes 0.1 to 0.3 full-time equivalent per 200 users. At a £45 loaded hourly rate, that is £9,360 to £28,080 a year.

Microsoft 365 and Google Workspace both charge for extra storage, typically £1.50 to £4 per user a month.

Exit. Allow for exports, conversion, replacement setup and archive needs. Add supplier assistance and access closure.

Government lock-in guidance is aimed at public cloud buyers but supplies useful questions about formats, skills and migration expense. Export and migration to a replacement typically costs 50 to 150 internal hours, or £2,250 to £6,750 at £45 an hour. Supplier exit fees, where they exist, often run £1,000 to £5,000.

Value internal time carefully

Ask finance for a loaded hourly cost by role. Do not use salary divided by working hours unless that is the organisation's approved method. Label opportunity cost separately from new cash expenditure: existing staff may not increase payroll, but their assigned work displaces something else.

The ONS 2025 earnings bulletin provides provisional UK medians with definitions and quality notes. It is a context source, not a replacement for the actual roles, region and employment costs in this project. The median full-time gross annual pay for UK employees was £37,430 in April 2025, according to that bulletin.

Produce a decision-ready view

For every entry, retain the amount, unit, quantity and period. Add the evidence link, access date, owner and confidence level. Show lower and upper cases for uncertain seats, usage and implementation time. Never hide an unknown in contingency.

Reconcile the model to the proposed order before approval. Match the legal entity, product name, starting seat quantity and add-ons. Check the commitment, invoice frequency and renewal mechanism. A discount should have an end date and an undiscounted comparison line. Ask the supplier to correct ambiguous wording rather than interpreting it in the buyer's favour.

Then walk one joiner and one leaver through the billing calendar. Identify when a charge begins, when a reduction takes effect and who must make the account change. This small exercise converts an abstract per-user amount into an operating control. It can also reveal that human-resources and finance records need a regular reconciliation.

Report three outputs: cash required by period, total ownership cost over the chosen horizon, and unresolved exposures. The next task is to request one written supplier quote with all billing assumptions attached, then reconcile it against the model line by line.

Before you act

Common questions

Why should the cost model start at investigation rather than purchase?

The article says a wider boundary prevents a low subscription line from concealing staff effort, extra controls or a difficult migration later. Investigation hours occur even if no purchase follows, so starting at purchase would miss workflow analysis, demonstrations, security review and procurement work.

How should internal staff time be valued in the model?

Ask finance for a loaded hourly cost by role. Do not use salary divided by working hours unless that is the organisation's approved method. Label opportunity cost separately from new cash expenditure, because existing staff may not increase payroll but their assigned work displaces something else.

What should be checked before approving the proposed order?

Reconcile the model to the proposed order. Match legal entity, product name, starting seat quantity and add-ons. Check commitment, invoice frequency and renewal mechanism. A discount should have an end date and an undiscounted comparison line. Ask the supplier to correct ambiguous wording rather than interpreting it in the buyer's favour.