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Payback Period to Implement New Product

A business currently has a business intelligence tool called WebFocus in a production environment (supporting end users). Cost to maintain WebFocus is $313,832 per year in software maintenance fees and other associated costs to include helpdesk support and other labor.

The business wants to migrate from WebFocus to Oracle Discoverer in order to take advantage of an existing enterprise license agreement so that no license cost is incurred by using Oracle. The only costs to the business will be a one time conversion cost of $500,000 to duplicate existing reports current in WebFocus to an Oracle format and other minor jobs. Expected maintenance costs for Oracle Discoverer are $230,000 for one full time senior engineer on staff for years 2 and forward.

What is the payback period for implementing Oracle Discoverer? Assume that WebFocus will be in-place until December 31 and the migration to Oracle will be done concurrently and is expected to be completed and operational by Dec 31 as well. WebFocus will be discontinued as of Dec 31.

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What is the payback period for implementing Oracle Discoverer? Assume that ...

Solution Summary

Excel spreadsheet shows how to find the payback period for new software that they're using to phase out an old piece.

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