Start with two figures: the money you will pay suppliers and the time your team will spend introducing and using the tool. Keeping them separate helps you see both affordability and workload.
The example below is a hypothetical tool that drafts replies to routine enquiries. A person checks each reply before sending it. These figures illustrate a calculation; they are not supplier prices or a forecast for your business.
Put the first-year costs in one place
Item | Supplier spend | Staff time |
|---|---|---|
Outside help with setup | £600 | None assumed |
Preparation and testing by the team | £0 extra pay assumed | 20 hours |
Subscription at £40 a month | £480 | None assumed |
Usage at £10 to £30 a month | £120 to £360 | None assumed |
Checking drafts, five hours a month | £0 extra pay assumed | 60 hours |
First-year total | £1,200 to £1,440 | 80 hours |
The cash total is £600 + £480 + £120 to £360. Staff time is 20 hours of setup plus 60 hours of checking. If you value staff time at an assumed £15 an hour, those 80 hours have a planning value of £1,200. They create an additional bill only if you pay for extra hours or outside help.
For a real estimate, add the costs this example leaves out where they apply: training, support, maintaining source material, hosting and connections to other systems. Check minimum contract terms and whether the quoted prices include taxes. Count preparation even if you do it yourself.
Compare the complete task
Suppose handling enquiries currently takes six hours a week. In a trial, the complete new process takes two hours a week, including preparing inputs, checking drafts, corrections and the enquiries the tool cannot handle.
The difference is four hours a week. Over an assumed 48 working weeks, that is 192 hours. Deduct the 20 hours spent setting it up and the first-year gain is 172 staff-hours, against £1,200 to £1,440 of supplier spend.
The five monthly hours of checking already sit inside the new process’s two hours a week. Subtracting them again would count the same work twice. Any continuing upkeep omitted from that two-hour measurement must still be deducted.
This gives you a decision to assess: is freeing roughly 172 hours worth that cash cost, and can the business use the time? It does not promise £2,580 will appear in the bank. The staff may be paid the same salary and use the time for other work.
Find the assumption that could change the answer
Checking time is often more consequential than a small difference in subscription price. If the complete new task takes five hours a week, the saving falls to 48 hours over the year, or 28 after setup. The supplier bill is unchanged.
Write uncertain figures as ranges and say how you will test them. A sample of real enquiries can help estimate checking time. Supplier terms explain usage charges and exit costs. A busy period may need a separate estimate if its volume or work is different.
A connected system can add development and support costs. An existing integration may also make the work easier. Price the actual arrangement rather than assuming every connection is expensive or every standalone tool is cheap.
Check the simpler option before committing
Compare the proposal with approved reply templates or improvements to existing software. If most enquiries need the same answer, a template may achieve much of the benefit with little setup.
Set a limit on what you will spend learning whether the AI approach works. Include staff-hours in that limit. If the trial reaches it without a useful result, review the evidence before spending more.
Once a process is running, use the monthly cost record to compare its actual cost with this estimate.
About Jay
I’m Jay Janes, a Practical AI Advisor and founder of Reformat Labs. I write about choosing useful work for AI, checking the results and supporting the people using it.