Build a Three-Year TCO Comparison
Construct a simple three-year TCO comparison across supplier options.
Compare two software suppliers over three years. Vendor A costs $520,000 per year and includes implementation. Vendor B costs $425,000 in year one, excludes implementation, requires training, and has higher renewal uplift. Three-year TCO = subscription + implementation + internal labor + training + renewal uplift + exit or transition cost. The common trap is ranking bids by year-one subscription and treating excluded work as if it were free. That rewards the supplier with the thinnest assumptions, not the supplier with the best economics. Set the horizon Use three years because both suppliers are proposing a three-year commercial commitment and…
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