Third-party SaaS costs: the often forgotten item

When you receive a quote for building a brand operational system, the figure in front of you is the service fee from the provider. However, that system runs thanks to a series of third-party subscription software, and these costs continue indefinitely, monthly or yearly, beyond the setup fees. If not fully listed from the start, the operational budget will fall short within the first few months.

Why is this often overlooked

Setup fees are one-time or phase-based, making them easy to see and compare. Subscription software fees (SaaS, short for Software as a Service, meaning online software paid periodically) are smaller individually but add up over time, recurring each period. Many business owners building their operational systems for the first time only look at the fees from the service provider, thinking that is the total cost, and are surprised when the supplier sends separate invoices right in the first month of implementation.

According to operational analysis of martech from MarTech.org, the total cost of ownership is often about 1.5 to 2 times the displayed license fee, as it also includes integration, training, and maintenance. This multiplier should not be a cause for concern but rather a consideration to plan accurately from the start.

Types of costs to list

• Fixed periodic costs: Seat fees for each user on each tool, such as Google Workspace, project management platforms, accounting software. This amount is easy to estimate because the package prices are clear.
• Cost based on usage: The API (application programming interface, which connects software) of the language model, cloud storage services, and automated email systems. This cost fluctuates based on actual tasks and is difficult to predict in the early stages.
• Integration and maintenance costs: When providers update systems, integration between tools may require adjustments. This is an additional cost that is often completely overlooked during initial budgeting.
• Training costs and team time: employees need time to familiarize themselves with new tools. This cost does not appear on invoices but has real value.

Common mistakes when budgeting

• Only looking at the setup fee, not adding the recurring subscription costs incurred later.
• Not clearly separating which costs are borne by the service provider and which are paid directly by the business leads to misunderstandings about the scope.
• To allow redundant chairs and overlapping tools to accumulate over multiple periods without anyone reviewing. This situation is called subscription sprawl: the number of tools increases, total costs rise, but the actual value used does not increase correspondingly.
• Choose usage-based tools without setting a prior spending limit. The end-of-month invoice can spike unexpectedly during a major campaign or when testing new features.

How to budget correctly from the start

Before finalizing the system, ask the provider to list all the tools that will be used, along with the type of costs (fixed or usage-based), payment cycles, and who will be responsible for payment. This table doesn’t need to detail every cent but should be sufficient for you to see the total periodic costs each month and each year.

After implementation, review this list every quarter or at each renewal period. A simple check question: who is using this tool, how many times a week, and are there any other tools in the system doing similar work?

The true cost of an operating system is not just the fee you pay when setting it up, but the total fee you pay each year for it to continue running.

Practical experience.

This article is for reference. The scope, pricing, and specific commitments of Sinh Vũ are detailed in the proposal and signed contract.