How to calculate the ROI of an intranet

The most common mistake when asking for an intranet budget is describing the benefit in the abstract: "communication improves", "culture develops", "engagement rises". These may be true, but a finance team does not approve budgets on them. An approvable business case is written in time and money.

The method below lets you build a calculation that is neither inflated nor easy to dismiss.

1. Measure search loss

This is the largest and least visible item. Employees spend time looking for information: which procedure applies, where the form is, whom to ask.

Do not estimate it — ask. One question in a short survey is enough: "Roughly how much time did you spend last week finding a piece of information you needed?" One week of real data is more convincing than an annual guess.

The calculation:

` Annual loss = headcount × hours lost per week × 46 weeks × hourly cost `

For a company of 200 people losing 1.5 hours a week at an average hourly cost of 350 TL, that is 200 × 1.5 × 46 × 350 = 4.83 million TL. An intranet does not eliminate this loss; a realistic target is recovering 30–40% of it.

2. Count repeated HR questions

Most questions reaching the HR team are the same ones: my leave balance, payslip, travel allowance, holiday dates. Each one costs the asker's time and the answerer's time.

Ask HR to keep a log for one week: how many questions, how many of them repeats. The typical result is that 60–70% of questions could be answered by self-service.

The calculation:

` Annual gain = weekly questions × 70% × average handling time × 46 × HR hourly cost `

3. Shorten time to productivity

The time a new hire needs to reach full productivity is a measurable cost. Someone who starts with scattered information falls weeks behind someone who starts with an organised starter pack.

Even a two-week reduction returns 60 weeks of lost productivity a year in a company hiring 30 people annually. Onboarding and orientation describes what that pack contains.

4. Use turnover improvement carefully

An intranet alone does not reduce turnover, and a calculation that claims so damages your credibility. But visible communication and recognition do touch the "not feeling valued" and "cannot access information" reasons that appear among exit causes.

If you include this line, include it conservatively: assume a one-point improvement in turnover, not more.

5. Count the tools you retire

In most companies an intranet replaces several small subscriptions: a separate survey tool, a separate file-sharing service, a separate announcement app, a separate org chart tool. List them and add up the annual total — it is usually larger than expected.

The cost side: not just the licence

An honest ROI calculation writes the cost in full:

• Annual licence (per user)
• Setup and content migration effort
• Content ownership: an unmaintained intranet produces no value. A few person-days a year are needed; intranet governance and content ownership describes the role.
• Training and adoption

A calculation that omits the non-licence lines will not hold at the end of year one, and nobody will believe you again.

Put the formula together

` Net annual benefit = (search gain + HR gain + onboarding gain + retired tools) − (licence + setup/year + maintenance)

Payback period = total first-year cost / (net annual benefit / 12) `

In a healthy project the payback period usually lands between 6 and 12 months. If it does not, either the scope is too wide or the real problem is not one that software solves — and knowing either at the start beats stopping the project in month six.

One page is enough for the presentation

The summary going to finance is three lines: annual loss, share to be recovered, payback period. Show the assumptions in a footnote and stay on the conservative side. An inflated ROI gets the project approved but loses the second-year budget.

We covered pricing models and the buying process in intranet cost and procurement.

Validate before you present

The weakest point of any ROI calculation is its assumptions. Two checks before the presentation raise credibility noticeably.

Validate assumptions with their owners. Ask the department that lives with the search loss, not HR, for the estimate. People do not later argue with a number they gave themselves.

Add a sensitivity analysis. Instead of a single result, present three scenarios: pessimistic (20% of the gain materialises), realistic (35%), optimistic (50%). If the payback period is acceptable even in the pessimistic case, the discussion is over.

Measure at the end of year one

This is the step most often skipped: once the business case is approved, nobody goes back to check. Yet measuring the savings actually realised at the end of the first year determines both the continuation of this project and the credibility of your next budget request.

Record the baseline values before the project starts: weekly HR question count, rate of failed searches, onboarding time. Trying to remember "what it used to be" afterwards turns measurement into guesswork.