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ROI of Office 365: Forrester Total Economic Impact Summary

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Forrester Consulting was commissioned by Microsoft to examine the potential return on investment that enterprises could realize with Office 365.

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ROI of Office 365: Forrester Total Economic Impact Summary

  1. 1. Office 365 TEI Study from Forrester Summary of “The Total Economic ImpactTM Of Microsoft Office 365 – Enterprise Customers” 2014 report by Forrester Consulting, commissioned by Microsoft
  2. 2. Methodology for the study Forrester Consulting was commissioned by Microsoft to examine the potential return on investment that enterprises could realize with Office 365. Identified 63 organizations with Office 365 experience to either interview or survey* 1 Interviewed marketing, sales and consulting personnel at Microsoft 2 Created composite organization based on interview and survey findings 3 Constructed financial model populated with cost and benefit data 4 Adjusted the financial model based on risks and issues 5 Applied the risk-adjusted financial model to the composite organization 6 *Surveyed companies identified by Forrester, and interviewed companies provided by Microsoft.
  3. 3. Description of composite organization 6Kemployees in North America comprising 2,500 knowledge who were moved to Office 365 and 3,500 operational workers 300road warriors who travel four days per week for 45 weeks out of the year 8offices between the U.S. and Canada, plus operations in Europe and Asia Original component Office 365 upgrade Office Professional Plus 2010 Office 365 Professional Plus Exchange 2010 Exchange Online SharePoint 2010 SharePoint Online Lync Online Yammer OneDrive A light manufacturing, distribution and sales company. The study looks at the first phase migration of North American knowledge workers. Acme was interested in Office 365 in order to reduce the total cost of ownership, convert costs from CapEx to OpEx, and improve user productivity and collaboration.
  4. 4. Five benefit areas Control & ComplianceMobility Business Intelligence Enterprise SocialTechnology
  5. 5. $(2,000,000) $(1,000,000) $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 Initial Year 1 Year 2 Year 3 Summary of TEI ($113,361) $222,799 $1,719,923 $3,819,353 Total Costs Total Benefits Running Total $5.6Min risk-adjusted net present value over three years 163% three-year, risk-adjusted ROI $1,348 three-year, risk-adjusted NPV/user 7months for Office 365 payback 468% Internal Rate of Return Microsoft Office 365
  6. 6. “We were looking at our five-year IT plan, and the trends were clear. We knew we had to move to a subscription model in order to keep up-to-date on the latest technologies in an effective and efficient way.” “Moving to Office 365 is part of an overall program to cut support costs in half. To do that we needed to move to more of a consumer style support model.” “We were reaching a tipping point with over half of our system users being mobile users. All roads lead to mobile first and we needed to support it through the cloud.” In the customers’ own words
  7. 7. Technology Cost Savings $2.43Min benefits resulting from lower infrastructure costs, implementation efforts, licenses, and IT support $272K Implementation cost savings $672K Server, hardware and hosting cost savings $1.43M IT support savings $60K Microsoft server license savings
  8. 8. “Our employees can now get their data and apps from anywhere without having to mess with VPNs. Office 365 is really intuitive and simple to use.” “We no longer need to open remote offices everywhere since people can work from home. We expect to start savings $2 to $3 million per year in office costs next year.” Mobility $2.81Min savings from a more productive mobile workforce
  9. 9. 6.8% Reduction in compliance costs 10.7% Reduction in the time spent on eDiscovery efforts 73% Reduction in number of data breaches Control & compliance $90Kin labor hour savings from eliminating additional projects for implementing redundant solutions
  10. 10. 8.5% Decrease in time to make decisions Business intelligence $3.2Min production gains from better and faster access to the right information 30 minutes saved per day
  11. 11. “Additionally, the social aspect of Office 365 has resulted in direct cost savings by being able to eliminate other social and collaboration services” “Integration with Yammer has improved collaboration. We are seeing knowledge sharing increase.” Enterprise social $247Kin benefits from better communications and eliminating redundant social tools
  12. 12. “Additionally, the social aspect of Office 365 has resulted in direct cost savings by being able to eliminate other social and collaboration services” “Integration with Yammer has improved collaboration. We are seeing knowledge sharing increase.” The cost of implementation
  13. 13. Summary of the value of Office 365 Forrester estimates 7 month payback for Office 365 Control & Compliance Business Intelligence Enterprise SocialMobilityTechnology Cost Savings Improve agility, reduce costs, and provide the tools to work efficiently Enable employees to work from almost anywhere on any device Help protect customer data and ensure compliance Provide greater insights into business performance Empower the sales force with collaborative tools that increase customer revenue 163% three-year, risk-adjusted ROI $5.6 million risk-adjusted NPV 468% Internal Rate of Return
  14. 14. Office 365 TEI Study from Forrester Summary of “The Total Economic ImpactTM Of Microsoft Office 365 – Enterprise Customers” 2014 report by Forrester Consulting, commissioned by Microsoft

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