Forrester on office 2010 final
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The document summarizes a Forrester Consulting study on the total economic impact of migrating from Office 2007 to Office 2010 for an organization of 5,000 information workers. The study found benefits of over $9 million and costs of $1.6 million, resulting in a risk-adjusted net present value of over $7 million and a payback period of 5 months. Key benefits came from increased collaboration features like simultaneous co-authoring and OneNote, as well as productivity gains from improved features across Office 2010 applications. The report also outlines Forrester's TEI methodology and discloses that Microsoft commissioned and reviewed the study.
![BenefitsWith Office 2010, we can work together in a variety of locations in different time zones in a more cost-effective manner. Co-authoring plus offline access [using SharePoint Foundation Server] make this possible.-Director of collaboration and network services, IP and Ethernet solutions provider Forrester found benefits in four key areas:Simultaneous Co-Authoring $6,750,900 Benefits of using co-authoring for sales and bidding process amongst 600 sales professionals OneNote 2010 $1,980,265 Benefits of using OneNote shared notebooks within an estimated 40 teams to share data, notes and project informationElimination Of Third-Party Photo/Video Editing Tools $68,655 Reduced cost of licensing and supporting a third-party photo and video editing toolCant Live Without Features Of Office 2010 $13,631,625 Benefit of non-headline-grabbing features of Office 2010. Interviewees (actual customers) described these features as providing productivity benefits that they were not able to quantify on a per-feature basis. However, Forrester often heard comments such as I love it and Now that Ive seen it, I cant live without it.](https://image.slidesharecdn.com/forresteronoffice2010final-101203013744-phpapp01/85/Forrester-on-office-2010-final-5-320.jpg)
Forrester on office 2010 final
- 1. Presentation based on may 2010 report: the total economic impact of Office 2010, by Forrester consultingForresters Total Economic Impact of Office 2010
- 2. Disclosures The reader should be aware of the following: The study is commissioned by Microsoft and delivered by the Forrester Consulting group. Microsoft reviewed and provided feedback to Forrester, but Forrester maintained editorial control over the study and its findings. The customers for the interviews were provided by Microsoft. Forrester makes no assumptions as to the potential benefits that other organizations will receive. Forrester strongly advises that readers should use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Microsoft Office 2010. This study only compares the economic impact of migrating from Office 2007 to Office 2010. For organizations that are currently running Office 2003, this study does not include any additional benefits your organization may receive by moving from Office 2003 to Office 2010, nor does it take into account any additional hardware or migration costs and the risks associated with those costs. This study is not meant to be used as a competitive product analysis.
- 3. Findings: Costs & Benefits of Office 2010 Benefits for an organization of 5000 information workers, moving from Office 2007. Benefits over $9 million. Quantified benefits accruing to the Organization amount to $9,044,685 (risk-adjusted, PV) over a three-year period. Costs of $1.6 million. The costs for the upgrade to Office 2010 total $1,629,272 present value (PV). Costs include internal labor and Software Assurance renewal fees.* Resulting risk adjusted net present value (NPV) over $7 million, and payback period of 5 months. The resulting risk-adjusted NPV of deploying Office 2010 is $7,415,413. The payback period is a very quick five months. NPV (risk adjusted) per information worker over $1,400. *The Organization in this study bought Office 2007 Professional Plus licenses 3 years ago, so it is now renewing its Software Assurance agreement for three years.
- 4. CostsThe upgrade to Office 2010 has been easier than previous upgrades less employee training, fewer help desk calls, and less deployment time for IT. -IT operations leader, electronics manufacturing services provider Forrester found two main sources of cost: deployment and SA renewal feesDeployment: Internal Labor costs $16,922With an average fully loaded hourly compensation of $52.88, the total internal labor cost to deploy Office 2010 was $16,922. License renewal: cost $129.67 each per each of the 5,000 devices in each of Years 1, 2 and 3 for a total cost of $1,945,050 All customers interviewed agreed that the migration from Office 2007 to Office 2010 beta was easier than the earlier migration from Office 2003 to Office 2007, both from an IT deployment standpoint and user-adoption standpoint.
- 5. BenefitsWith Office 2010, we can work together in a variety of locations in different time zones in a more cost-effective manner. Co-authoring plus offline access [using SharePoint Foundation Server] make this possible.-Director of collaboration and network services, IP and Ethernet solutions provider Forrester found benefits in four key areas:Simultaneous Co-Authoring $6,750,900 Benefits of using co-authoring for sales and bidding process amongst 600 sales professionals OneNote 2010 $1,980,265 Benefits of using OneNote shared notebooks within an estimated 40 teams to share data, notes and project informationElimination Of Third-Party Photo/Video Editing Tools $68,655 Reduced cost of licensing and supporting a third-party photo and video editing toolCant Live Without Features Of Office 2010 $13,631,625 Benefit of non-headline-grabbing features of Office 2010. Interviewees (actual customers) described these features as providing productivity benefits that they were not able to quantify on a per-feature basis. However, Forrester often heard comments such as I love it and Now that Ive seen it, I cant live without it.
- 7. Appendix
- 9. MethodologyForresters Total Economic Impact (TEI) methodology has four primary components:Given the increasing sophistication that enterprises have regarding cost analyses related to IT investments, Forresters TEI methodology can be a tool to help estimate the benefits associated with any project.
- 11. Additional Total Economic Impact StudiesEach product has a Total Economic Impact study available for review. In addition, a cross-product study estimates the better together benefits of deploying the entire stack of server and client products.Better Together TEI
Editor's Notes
- #3: US-based company of 7000 people5,000 information workers currently using Microsoft Office 2007 Operations across Europe and AsiaGoals in Office 2010 deployment: Reduce costs of team document collaborationImprove email managementEnsure competitive edge as early adopters of new technologyUpgrade to Office 2010 without adding new hardware costsReduce the number of vendors tools/applications deployed
- #6: Note re: Cant Live Without Features : Forrester estimates 1% productivity improvement for all 5,000 information workers in their first year of using O2010. Then estimates 2% improvement in years 2 and 3. Then Forrester acknowledges that not all people will take advantage of their time savings so they reduce the benefits by 50%. Resulting figure = over $13 million.Text from study: Forrester has taken a very conservative approach to quantifying the cumulative benefits of the above features. Well assume that all 5,000 iWorkers will assimilate some of these features over the first 12 months of Office 2010 deployment, and they will realize a conservative 1% productivity improvement the first year due to the learning curve, followed by a 2% productivity improvement in Years 2 and 3 of our analysis. When the calculations are complete (see Table 9), the benefits total $13,631,625 over three years, representing a 1% to 2% improvement in productivity for 5,000 iWorkers. Forrester acknowledges that you wont be able to find those savings on the P&L statement. Further, not all iWorkers will take full productive advantage of the new features (as Forrester acknowledges in Table 10 with a 50% benefits reduction risk adjustment). However, if most of the 5,000 iWorkers could produce 1% to 2% more output (revenue, for example) with that extra time, the resulting benefits could be greater than $13 million.