total-cost-analysis

name	total-cost-analysis
description	Compare procurement options using total lifecycle cost across price, implementation, integration, migration, training, support, infrastructure, usage growth, switching, exit, and internal operating effort rather than sticker price alone.

Total Cost Analysis

Use when vendor or build-buy decisions have material costs beyond the quoted subscription or purchase price.

Procedure

1. Define the decision horizon, usage scenarios, customer or employee scale, currency, and options being compared.
2. Capture direct fees including licenses, usage, seats, transaction charges, implementation, support tiers, hardware, and required add-ons.
3. Estimate internal costs for integration, migration, security review, procurement, training, administration, support, maintenance, and reporting using explicit assumptions.
4. Model cost changes under realistic growth, peak usage, overage, storage, data egress, additional environments, or premium features.
5. Include switching, contract-exit, data-export, decommissioning, and replacement costs where lock-in or migration is material.
6. Distinguish one-time, fixed recurring, variable, and uncertain cost and show scenarios rather than hiding uncertainty in one total.
7. Compare cost with the expected value and service differences so the cheapest option is not automatically treated as best.
8. Reconcile assumptions with Finance, technical owners, and vendor evidence before using the analysis for approval.

Decision rules

• Total cost is scenario-dependent.
• Internal operating burden is real even when it does not appear on a vendor invoice.
• Do not invent precision for future usage or migration effort.
• Cost comparison should preserve meaningful capability and risk differences.

Quality gate

The analysis is ready when direct and indirect lifecycle costs are explicit, usage and growth assumptions are visible, switching and internal effort are included where material, scenarios show uncertainty, and decision-makers can compare cost alongside value and risk on equivalent terms.