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A Forrester Total Economic
Impact™ Study
Commissioned By
OpenText
Project Director:
Anish Shah
December 2014
The Total Economic
Impact™ Of OpenText Cost Savings And Business Benefits
Enabled By OpenText Customer
Experience Management (CEM) Suite
Table Of Contents
Executive Summary .................................................................................... 3
Disclosures .................................................................................................. 5
TEI Framework And Methodology ............................................................ 6
Analysis ........................................................................................................ 7
Financial Summary ................................................................................... 16
OpenText Experience Suite: Overview ................................................... 17
Appendix A: Interviewed Organization Description ............................. 18
Appendix B: Total Economic Impact™ Overview ................................. 19
Appendix C: Forrester And The Age Of The Customer ....................... 20
Appendix D: Glossary ............................................................................... 21
Appendix E: Endnotes .............................................................................. 22
ABOUT FORRESTER CONSULTING
Forrester Consulting provides independent and objective research-based
consulting to help leaders succeed in their organizations. Ranging in scope from a
short strategy session to custom projects, Forrester’s Consulting services connect
you directly with research analysts who apply expert insight to your specific
business challenges. For more information, visit forrester.com/consulting.
© 2015, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited.
Information is based on best available resources. Opinions reflect judgment at the time and are subject to
change. Forrester®, Technographics
®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact
are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective
companies. For additional information, go to www.forrester.com.
3
Executive Summary
OpenText commissioned Forrester Consulting to conduct a
Total Economic Impact™ (TEI) study and examine the
potential return on investment (ROI) enterprises may
realize by deploying OpenText Customer Experience
Management (CEM) Suite solutions. The OpenText CEM
Suite includes capabilities from the following products:
OpenText Web Experience Management (WEM),
OpenText High Performance Web Delivery (caching),
OpenText Media Management (DAM), OpenText Adobe
Drive Connector, OpenText Media Hub Portlets, OpenText
Tempo Social, OpenText Portal, OpenText Customer
Communication Management (CCM), OpenText AppWorks
Gateway, and OpenText Directory Services. The purpose
of this study is to provide readers with a framework to
evaluate the potential financial impact of implementing
OpenText CEM Suite on their organizations, to leverage
the software and related solutions to win, serve, and retain
customers.
To better understand the benefits, costs, and risks associated with an OpenText CEM Suite implementation, Forrester
interviewed an existing customer (Sprint) with multiple years of experience using the software platform to enhance its
customer experience across channels by leveraging responsive design and display content and engaging prospects and
customers with more content-centric touch points and experiences.
Prior to using OpenText’s CEM Suite and web content management solution, Sprint was using two disparate portals — one
for its sales team and the other for the rest of the organization, including HR, finance, and other business groups, providing
an inconsistent experience and increased overhead for management. Sprint developed an internal business case to move to
OpenText CEM Suite, combining the portals into one content system that has the same look and feel and a single hierarchy
of navigation protocols.
OPENTEXT CEM SUITE REDUCES MARKETING COSTS AND INCREASES IT AND BUSINESS PRODUCTIVITY
Our interview with Sprint and subsequent financial analysis found that the organization experienced the risk-adjusted ROI,
benefits, and costs shown in Figure 1.1 The analysis points to three-year benefits of about $3.9 million versus initial license
and implementation costs of $1.3 million and ongoing labor and support costs of $440,000 per year, adding up to a three-
year net present value (NPV) of $810,000.
FIGURE 1
Financial Summary Showing Three-Year Risk-Adjusted Results
ROI: 34%
Payback: 23-24 months
Three-year benefits: $3.9 million
Three-year NPV: $810,000
Source: Forrester Research, Inc.
OpenText CEM Suite can help increase revenue
through delivering more-relevant and targeted
customer experience, increase IT productivity, and
increase marketing efficiency through its web
content management platform, which helps create
targeted customer interactions across geographies.
The costs and benefits over three years for Sprint,
the United States’ third-largest telecommunications
provider, based on an in-depth interview with a
senior manager of CEM, are:
License and maintenance costs: $936,000.
Professional service fees: $712,600.
Annual labor cost: $975,000.
Total three-year benefits: $3.9 million.
4
› Benefits. The interviewed organization experienced the following risk-adjusted benefits:
• An up to 10% increase in customer
acquisition. The OpenText CEM Suite enabled
an increase in new customer acquisitions by up
to 10% by having the ability to more easily
access, store, and share information. As a result,
in Year 1, Forrester estimates Sprint realized a
5% attribution of revenue lift, increasing to 10%
by Year 3. This data is based on Forrester
Research assumptions of Sprint’s environment.
• A 25% increase in IT productivity. Forrester
estimates Sprint realized IT productivity
efficiencies of 25% over its previous ways of
managing information and content.
• Marketing efficiencies of approximately
$287,000 per year. Forrester estimates that
Sprint experienced cost savings of approximately
$287,000 per year through an increase in
productivity of the marketing team, which is
responsible for analytics and updating the
website’s content. This data is based on
Forrester Research assumptions of Sprint’s
environment.
› Costs. The interviewed organization experienced the
following risk-adjusted costs:
• Initial enterprise license and annual
maintenance costs totaling $936,000 over
three years. Sprint purchased enterprise wide
licenses of OpenText CEM Suite for $585,000.
Additionally, annual support and maintenance
fees of $117,000, including software upgrades,
were incurred.
• Professional service fees to implement the
solution and then ongoing direct and indirect
labor costs of approximately $1.7 million over three years. Sprint paid professional service fees of $712,600 to
implement the OpenText CEM suite into its environment. Additionally, Sprint has both direct full-time employees
(FTEs) who manage OpenText CEM Suite in-house at Sprint, as well as indirect FTEs, including database and
system architects, who support the solution on an ongoing basis. The direct and indirect costs are approximately
$325,000 per year.
“With OpenText CEM Suite, we now
are getting message consistency and
information consistency to better
service our customers across all of
our channels.”
~ Senior manager of CEM, Sprint
5
Disclosures
The reader should be aware of the following:
› The study is commissioned by OpenText and delivered by Forrester Consulting. It is not meant to be used as a
competitive analysis.
› Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises
that readers use their own estimates within the framework provided in the report to determine the appropriateness of an
investment in OpenText CEM Suite.
› OpenText reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its
findings and does not accept changes to the study that contradict Forrester's findings or obscure the meaning of the study.
› OpenText provided the customer name for the interview but did not participate in the interviews.
6
TEI Framework And Methodology
INTRODUCTION
From the information provided in the interviews, Forrester has constructed a Total Economic Impact (TEI) framework for
those organizations considering implementing OpenText CEM Suite. The objective of the framework is to identify the cost,
benefit, flexibility, and risk factors that affect the investment decision, to help organizations understand how to take
advantage of specific benefits, reduce costs, and improve the overall business goals of winning, serving, and retaining
customers.
APPROACH AND METHODOLOGY
Forrester took a multistep approach to evaluate the impact OpenText CEM Suite can have on an organization (see Figure 2).
Specifically, we:
› Interviewed OpenText marketing, sales, and/or consulting personnel, along with Forrester analysts, to gather data relative
to the marketplace for OpenText CEM Suite.
› Interviewed one organization currently using OpenText, to obtain data with respect to costs, benefits, and risks.
› Constructed a financial model representative of the interview using the TEI methodology. The financial model is populated
with the cost and benefit data obtained from the interview.
› Risk-adjusted the financial model based on issues and concerns the interviewed organization highlighted in interviews.
Risk adjustment is a key part of the TEI methodology. While the interviewed organization provided cost and benefit
estimates, some categories included a broad range of responses or had a number of outside forces that might have
affected the results. For that reason, some cost and benefit totals have been risk-adjusted and are detailed in each
relevant section.
Forrester employed four fundamental elements of TEI in modeling OpenText CEM Suite: benefits, costs, flexibility, and risks.
Given the increasing sophistication that enterprises have regarding ROI analyses related to IT investments, Forrester’s TEI
methodology serves to provide a complete picture of the total economic impact of purchase decisions. Please see Appendix
B for additional information on the TEI methodology.
FIGURE 2
TEI Approach
Source: Forrester Research, Inc.
Perform due diligence
Conduct customer interview
Construct financial model using TEI
framework
Write case study
7
Analysis
INTERVIEWED ORGANIZATION
For this study, Forrester conducted an in-depth
interview with the senior manager of CEM for Sprint,
which has been a customer of OpenText for over 10
years.
Based on the in-depth interview, Forrester constructed
a TEI framework and an associated ROI analysis that
illustrates the areas financially affected. Sprint is the
customer of OpenText that Forrester interviewed, and
has the following characteristics:
› Is the third-largest telecommunications and wireless
network operator in the US.
› Has annual revenues of over $35 billion.
› Is headquartered in Overland, Kansas with over
30,000 employees worldwide.
› Serves more than 55 million customers.
› Operates wireless and wireline networks to serve
individual consumers and business customers.
› Is widely recognized for developing, engineering, and
deploying innovative technologies, including the first
wireless 4G service from a national carrier in the
United States.
› Continues to operate leading prepaid brands such as
Virgin Mobile USA, Boost Mobile, and Assurance Wireless.
INTERVIEW HIGHLIGHTS
Situation
Forrester interviewed a senior manager of CEM, who is responsible for managing the OpenText CEM Suite within Sprint as
well as for managing the relationship with OpenText. Sprint made the decision to move to a comprehensive CEM platform
because the corporation was managing two separate, disparate web experience management platforms. One was solely
dedicated to the sales team, and the other was for all the other businesses, including HR and finance teams.
Additionally, there were challenges with managing information across different parts of the organization. Sprint customer
service representatives were not getting access to critical customer care information to effectively understand and resolve
customer issues. This unconsolidated information led to inconsistent messaging being provided to customers and
employees. Sprint also wanted to rationalize its applications and drive operational efficiencies.
The senior manager of CEM said, “Both of our platforms that we had running were old and in need of an update, and rather
than updating two, we took that as an opportunity to get in a cutting-edge software stack with which we can reap the rewards
of operational efficiencies and deliver a great experience to our customers.”
“OpenText CEM Suite has brought new
cutting-edge software and brand new
hardware that allows Sprint to engage
our customers better while realizing
operational efficiencies and reduce
burden on the IT team from a backend
support perspective. OpenText CEM
Suite has made Sprint much more
organized, and it is a much better
solution for us. We are more definitely
more productive as a result.”
~ Senior manager of CEM, Sprint
8
After reviewing comparable customer experience management solutions, Sprint selected OpenText CEM Suite Web
Experience Management (WEM) 8.1. The decision was made because of the platform’s ability to provide an enterprise wide
solution to integrate its content across businesses and manage it as one critical asset.
Results
The interview with Sprint’s senior manager of CEM revealed that:
› OpenText CEM Suite creates a richer, more interactive online experience and is consistent across multiple
channels, which allows Sprint to win, serve, and retain customers. There is integration across Sprint’s websites,
mobile devices, and social networks, which
will manage the content across the
customer life cycle without sacrificing the
organization’s information governance
requirements.
› OpenText CEM Suite increases customer
acquisition for Sprint. The interview
revealed that due to more-consistent and
targeted communication across various
customer touch points, Sprint is able to
more effectively acquire new customers.
› OpenText CEM Suite increases IT
productivity through decreasing the
support cost of managing disparate
systems and having a more user-friendly
interface to manage software. Sprint was
able to increase its IT support productivity
by decreasing the percentage of time
managing content across multiple channels.
› A centralized system to dynamically and
consistently engage customers across
the Web and other channels allows
Sprint to be more efficient with its
marketing efforts. OpenText CEM Suite provides a software platform that is built for high volume across multiple
channels. Sprint was able to gain productivity and reduce its costs related to executing marketing campaigns and
messaging to its customers in line with both internal and external government policies and guidelines.
“We chose OpenText CEM solution because
it was just a much more robust system that
you can do a lot more with. Sprint had
different use cases, and OpenText CEM
Suite applications had the ability to meet
most of them without much customization
or major development efforts.”
~ Senior manager of CEM, Sprint
9
BENEFITS
As part of the analysis, Forrester estimated Sprint experienced a number of quantified benefits related to the OpenText
platform:
› Increase in customer acquisition rate by 5% to 10%.
› Increase in IT support productivity by 25%.
› Reduction in marketing costs of 40%.
Increase In Customer Acquisition Rate
The interview with Sprint indicated that implementing OpenText CEM Suite allowed the corporation to more
effectively convert prospects into customers through its channels. OpenText CEM Suite allowed Sprint to leverage
responsive design to display content consistently across mobile devices and platforms and gather real-time
customer insights and optimize its content, which had a direct impact on its customer acquisition rate.
Based on Forrester’s own research, an increase in Sprint’s customer acquisition rate was calculated (see Table 1)
based on an estimate that 20% of Sprint’s net new annual customers can be linked to customer engagement
activities across the Web and other channels. OpenText CEM solutions enable Sprint to deliver meaningful
conversations with its prospects and in its first three years attributed to about 5% to 10% of net new customer
acquisitions.
TABLE 1
Increase In Customer Acquisition Rate
Source: Forrester Research, Inc.
Ref. Calculation Initial Year 1 Year 2 Year 3 Total
Present
Value
A1 275,000 300,000 325,000
A2 20% 20% 20%
A3 200$ 200$ 200$
A3 5% 7% 10%
At $0 $550,000 $840,000 $1,300,000 $2,690,000 $2,170,924
100%
Atr $0 $550,000 $840,000 $1,300,000 $2,690,000 $2,170,924
Net contribution from new
customer per year
Metric
Total number of new Sprint
subscribers (customers)
Direct revenue from increase in
customer acquisition
Risk Adjustment
Direct revenue from
increase in customer
acquisition (Risk-Adjusted)
Percentange of customer
acquisition increased due to
customer experience and
touchpoiints
Percentage of direct attribution
linked to CEM Suite
10
Increase In IT Productivity
Sprint indicated that another key benefit from the OpenText CEM Suite implementation was a significant savings
in IT support required to manage its customer management and experience technology tools across multiple
channels. Prior to its investment in OpenText CEM Suite, Sprint had IT resources dedicated with specialists
managing content and providing support across web, mobile, and social media channels. As a result, there was
an increased burden and demand on the IT resources to provide consistent support across multiple platforms.
Upon implementing OpenText CEM Suite, Sprint saw a measureable impact to its IT staff productivity. Sprint has
30 IT employees dedicated to supporting marketing channels. It has seen a 25% increase in productive time,
which results in a risk-adjusted three-year NPV of approximately $320,000 (see Table 2).
TABLE 2
Increase In IT Productivity
Source: Forrester Research, Inc.
Ref. Calculation Initial Year 1 Year 2 Year 3 Total
Present
Value
B1 30 30 30
B2 75$ 75$ 75$
B3 2,040 2,040 2,040
B4 100% 100% 100%
B5 50% 50% 50%
B6 25% 25% 25%
Bt B1*B2*B3*B6 $0 $143,438 $143,438 $143,438 $430,313 $356,708
90%
Btr $0 $129,094 $129,094 $129,094 $387,281 $321,037
Increase in IT Productivity
from the additional time
savings - OpenText CEM
Solution Suite (Risk-
Adjusted)
Average hourly burden rate IT
employee
Number of working hours per
year
Increase in IT Productivity from
the additional time savings -
OpenText CEM Solution Suite
Metric
Number of IT Employees
supporting marketing channels
Risk Adjustment
Percentage increase in
productive time from efficiency
gains by implementing CEM
solution
Percentage of IT employees
time managing Web, Mobile,
and Online applications
11
Reduction In Marketing Costs
Sprint indicated that an additional value derived from the OpenText CEM Suite implementation is its ability to
make its internal marketing team more productive. Based on Forrester’s own research, the marketing team
gained 350 hours of efficiencies within its marketing team, which is responsible for using analytics to deliver
campaigns and update as well as author new content on Sprint’s website.
Sprint increased its marketing team productivity by 40%, which resulted in savings of approximately $319,000 per
year (see Table 3).
TABLE 3
Reduction In Marketing Costs
Source: Forrester Research, Inc.
Ref. Calculation Initial Year 1 Year 2 Year 3 Total
Present
Value
C1 350 350 350
C2 12 12 12
C3 190$ 190$ 190$
C4 40% 40% 40%
Ct $0 $319,200 $319,200 $319,200 $957,600 $793,803
90%
Ctr $0 $287,280 $287,280 $287,280 $861,840 $714,423
Metric
Average time (hours) dedicated
to analytics, segmentation,
and authoring website content
Reduction in marketing cost
per FTE (marketing efficiency)
Risk Adjustment
Reduction in marketing cost
per FTE (marketing
efficiency) (Risk-Adjusted)
Number of marketing team
FTEs
Average hourly cost of
marketing FTE
Increase in marketing team
productivity from implementing
CEM solution
12
Total Benefits
Table 4 shows the total of all benefits across the three areas listed above, as well as present values (PVs) discounted at
10%. Over three years, Sprint experienced risk-adjusted total benefits to be a present value of about $3.2 million.
TABLE 4
Total Benefits (Risk-Adjusted)
Source: Forrester Research, Inc.
Ref. Initial Year 1 Year 2 Year 3 Total
Present
Value
Atr $0 $550,000 $840,000 $1,300,000 $2,690,000 $2,170,924
Btr $0 $129,094 $129,094 $129,094 $387,281 $321,037
Ctr $0 $287,280 $287,280 $287,280 $861,840 $714,423
$0 $966,374 $1,256,374 $1,716,374 $3,939,121 $3,206,384
Benefit Category
Direct Revenue from increase in customer
acquisition rate (Forrester Research &
Assumptions)
Reduction in Marketing Costs (Forrester Resarch
& Assumptions)
Total Benefits (Risk-Adjusted)
Increase in IT support productivity
13
COSTS
Sprint experienced the following two costs associated with the OpenText CEM Suite:
› Enterprise software license and annual maintenance costs.
› Initial professional service costs and ongoing direct and indirect labor costs.
These represent the costs experienced by Sprint for initial implementation and ongoing maintenance associated with the
solution.
Enterprise Software License And Annual Maintenance Costs
Sprint incurred $585,000 in fees to acquire software licenses to implement OpenText CEM Suite into its
environment. Additionally, Sprint spends about $117,000 in annual maintenance costs, which includes support
services, integration of other systems, and ongoing software updates. This resulted in about $936,000 in costs
over three years for Sprint (see Table 5).
Implementation and maintenance costs vary from organization to organization, considering different licensing
agreements, what other products may be licensed from the same vendor, and other discounts.
TABLE 5
Enterprise Software License And Annual Maintenance Costs
Source: Forrester Research, Inc.
Initial Professional Service Costs And Ongoing Direct And Indirect Labor Costs
Sprint incurred about $712,000 in professional service fees to implement OpenText’s CEM solution into its
environment. Sprint also incurs about $325,000 in both direct and indirect labor costs to support OpenText CEM
Suite each year. Sprint has 2.5 full-time support resources of the environment. It has one dedicated resource in
the US and another 1.5 offshore resources who support the OpenText CEM solution. Additionally, Sprint incurs
indirect labor costs from the support of other engineers, developers, DBAs, and architects. This amounts to about
an additional $150,000 in labor costs for the organization. For Sprint, this resulted in a three-year PV cost of
about $1.5 million (see Table 6).
Ref. Calculation Initial Year 1 Year 2 Year 3 Total
Present
Value
D1 $585,000
D2 $117,000 $117,000 $117,000 $351,000 $290,962
100%
Dtr $585,000 $117,000 $117,000 $117,000 $936,000 $875,962
Metric
Enterprise Software License
Annual Maintenance and
Support Costs
Risk Adjustment
Annual Maintenance and
Support Costs (Risk-
Adjusted)
14
Maintenance costs are more variable from organization to organization, considering some organizations
outsource and some manage this in-house, perhaps augmented with third-party consulting help.
TABLE 6
Initial Professional Service Costs And Ongoing Direct And Indirect Labor Costs
Source: Forrester Research, Inc.
Total Costs
Table 7 shows the total of all costs as well as associated present values, discounted at 10%. Over three years, the
interviewed organization expects total costs to total a net present value of about $2.4 million.
TABLE 7
Total Costs
Source: Forrester Research, Inc.
Ref. Calculation Initial Year 1 Year 2 Year 3 Total
Present
Value
E1 $100,000 $100,000 $100,000
E2 $75,000 $75,000 $75,000
E3 $150,000 $150,000 $150,000
E4 $712,600
Et $712,600 $325,000 $325,000 $325,000 $1,687,600 $1,520,827
100%
Etr $712,600 $325,000 $325,000 $325,000 $1,687,600 $1,520,827
Metric
Onshore FTEs to manage
CEM solution suite (1 FTE
@$100,000/Year)
Total Implementation and
Ongoing Labor Costs
Professional Service Fees
(Implementation)
Risk Adjustment
Total Implementation and
Ongoing Labor Costs (Risk-
Adjusted)
Offshore FTE to manage CEM
solution (2 FTE @
$50,000/year)
Indirect Labor - DBAs, System
Architects, Engineers
Ref. Initial Year 1 Year 2 Year 3 Total
Present
Value
Dtr ($585,000) ($117,000) ($117,000) ($117,000) ($936,000) ($875,962)
Etr ($712,600) ($325,000) ($325,000) ($325,000) ($1,687,600) ($1,520,827)
($1,297,600) ($442,000) ($442,000) ($442,000) ($2,623,600) ($2,396,789)
Cost Category
Enterprise software license and annual
maintenance costs
Total Costs (Risk-Adjusted)
Professional fees and onging direct and indirect
labor costs
15
FLEXIBILITY
Flexibility, as defined by TEI, represents an investment in additional capacity or capability that could be turned into business
benefit for some future additional investment. This flexibility provides an organization with the “right” or the ability to engage
in future initiatives but not the obligation to do so. There are multiple scenarios in which a customer might choose to
implement OpenText CEM Suite and later realize additional uses and business opportunities. Flexibility would also be
quantified when evaluated as part of a specific project (described in more detail in Appendix B).
OpenText CEM Suite instances at Sprint have the potential for more customization and functionality. Sprint has the
opportunity to use more-sophisticated features and functionality through customization that will allow Sprint to further
manage and share disparate amounts of content across its organization. Additionally, Sprint has the flexibility to scale up the
number of users who can both engage with the platform as well as benefit from its value additions, without increasing costs.
OpenText CEM Suite, including its Web Experience Management (WEM), is built for high-volume, transaction-oriented web
applications across all customer-centric touchpoints. It offers great scalability both to manage the company’s internal intranet
or outside-facing websites, extranets, and individual product or marketing-campaign specific microsites. The solution is
architected for the global enterprise, and its interface is designed for business users. Its simplified features and ease of
integration with other systems provides a lot of flexibility for the company in the way it engages with its prospects and
customers and delivers an overall experience that is unique and targeted to its customers.
RISK
Forrester defines two types of risk associated with this analysis: “implementation risk” and “impact risk.” Implementation risk
is the risk that a proposed investment in OpenText CEM Suite may deviate from the original or expected requirements,
resulting in higher costs than anticipated. Impact risk refers to the risk that the business or technology needs of the
organization may not be met by the investment in OpenText CEM Suite, resulting in lower overall total benefits. The greater
the uncertainty, the wider the potential range of outcomes for cost and benefit estimates.
TABLE 8
Benefit And Cost Risk Adjustments
Benefits Adjustment
Increase in customer acquisition rate N/A
Increase in IT productivity 10%
Reduction in marketing costs 10%
Source: Forrester Research, Inc.
Quantitatively capturing implementation risk and impact risk by directly adjusting the financial estimates results provides
more meaningful and accurate estimates and a more accurate projection of the ROI. In general, risks affect costs by raising
the original estimates, and they affect benefits by reducing the original estimates. The risk-adjusted numbers should be taken
as “realistic” expectations since they represent the expected values considering risk.
16
Financial Summary
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback
period for the interviewed organization’s investment in OpenText CEM Suite.
Figure 3 below shows the risk-adjusted ROI, NPV, and payback period values. These values are determined by applying the risk-adjustment values from Table 8 in the Risks section to the unadjusted results in each relevant cost and benefit section.
FIGURE 3
Cash Flow Chart (Risk-Adjusted)
Source: Forrester Research, Inc.
TABLE 9
Cash Flow (Risk-Adjusted)
Source: Forrester Research, Inc.
($1,500,000)
($1,000,000)
($500,000)
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
Initial Year 1 Year 2 Year 3
Cas
h F
low
s
Financial Analysis (risk-adjusted)
Total Costs Total Benefits Cumulative Total
Initial Year 1 Year 2 Year 3 Total
Present
Value
Total Costs ($1,297,600) ($442,000) ($442,000) ($442,000) ($2,623,600) ($2,396,789)
$0 $966,374 $1,256,374 $1,716,374 $3,939,121 $3,206,384
($1,297,600) $524,374 $814,374 $1,274,374 $1,315,521 $809,595
34%
23.4
ROI
Payback Period (months)
Summary
Total Benefits
Total
17
OpenText Experience Suite: Overview
Organizations are seeing a rise in customer-centric behavior and looking at digital transformation within their internal
departments and across their partner ecosystem. Technology and customer interactions have advanced to a height that
requires a rich and consistent digital presence across many channels for success in the global marketplace. The challenge is
to extract value from managed content and optimize and personalize information delivery to bridge the chaotic interactive
world with the secure data repositories behind the firewall.
OpenText is helping organizations orchestrate data, media, interactions, and transactions across a digital enterprise. The
complexity of managing a consistent brand presence across media, languages, cultural expectations, and governmental
regulations requires a platform built for pervasive connectivity and new ways of interacting that go beyond point-and-click.
The OpenText Experience Suite helps business leaders harmonize the technology applications with the customer
experience across every department in the organization. Whether the organization’s first priority is to get a handle on all of
the rich media (video, audio, print, imagery, etc.) or to streamline its communications, invoices, or web presence, the
OpenText Experience Suite platform offers market-leading digital asset management, web content management,
customer communications management, and social and portal capabilities to address them all in one solution.
The OpenText Experience Suite platform offers a media library to house digital assets from creation to distribution. It also
provides a web experience intelligence engine to keep track of where content has been shared and published to keep the
destination channels (mobile, web, social, apps) up to date with changing content. The platform also has access to an
application gateway, OpenText AppWorks, to build mobile, web, or print-based applications. Developers can augment the
base Experience Suite platform to deliver industry- or functional-specific business apps. As the platform is built on open
standards such as HTML5 and responsive design concepts, the end user can implement true omnichannel experiences.
18
Appendix A: Interviewed Organization Description
For this TEI study, Forrester interviewed the senior manager of CEM at Sprint, based in the United States. The financial
analysis and case study to illustrate the quantifiable benefits and costs of implementing OpenText CEM Suite are based on
this in-depth interview. The interviewed organization has the following characteristics:
› Is the third-largest telecommunications and wireless network operator in the US.
› Has annual revenues of over $35 billion.
› Is headquartered in Overland, Kansas and has over 30,000 employees worldwide.
› Serves more than 55 million customers.
› Operates wireless and wireline networks to serve individual consumers and business customers.
› Is widely recognized for developing, engineering, and deploying innovative technologies, including the first wireless 4G
service from a national carrier in the United States.
› Continues to operate leading prepaid brands such as Virgin Mobile USA, Boost Mobile, and Assurance Wireless.
FRAMEWORK ASSUMPTIONS
Table 10 provides the model assumptions that Forrester used in this analysis.
The discount rate used in the PV and NPV calculations is 10%, and the time horizon used for the financial modeling is three
years. Organizations typically use discount rates between 8% and 16% based on their current environment. Readers are
urged to consult with their respective company’s finance department to determine the most appropriate discount rate to use
within their own organizations.
TABLE 10
Model Assumptions
Ref. Metric Calculation Value
C1 Hours per year 2,040
C2 Average hourly cost — knowledge worker
globally $75
C3 Average hourly cost — IT support FTE $75
C4 Average hourly cost — compliance $150
Source: Forrester Research, Inc.
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Appendix B: Total Economic Impact™ Overview
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-
making processes and assists vendors in communicating the value proposition of their products and services to clients. The
TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior
management and other key business stakeholders. TEI assists technology vendors in winning, serving, and retaining
customers.
The TEI methodology consists of four components to evaluate investment value: benefits, costs, flexibility, and risks.
BENEFITS
Benefits represent the value delivered to the user organization — IT and/or business units — by the proposed product or
project. Often, product or project justification exercises focus just on IT cost and cost reduction, leaving little room to analyze
the effect of the technology on the entire organization. The TEI methodology and the resulting financial model place equal
weight on the measure of benefits and the measure of costs, allowing for a full examination of the effect of the technology on
the entire organization. Calculation of benefit estimates involves a clear dialogue with the user organization to understand
the specific value that is created. In addition, Forrester also requires that there be a clear line of accountability established
between the measurement and justification of benefit estimates after the project has been completed. This ensures that
benefit estimates tie back directly to the bottom line.
COSTS
Costs represent the investment necessary to capture the value, or benefits, of the proposed project. IT or the business units
may incur costs in the form of fully burdened labor, subcontractors, or materials. Costs consider all the investments and
expenses necessary to deliver the proposed value. In addition, the cost category within TEI captures any incremental costs
over the existing environment for ongoing costs associated with the solution. All costs must be tied to the benefits that are
created.
FLEXIBILITY
Within the TEI methodology, direct benefits represent one part of the investment value. While direct benefits can typically be
the primary way to justify a project, Forrester believes that organizations should be able to measure the strategic value of an
investment. Flexibility represents the value that can be obtained for some future additional investment building on top of the
initial investment already made. For instance, an investment in an enterprisewide upgrade of an office productivity Suite can
potentially increase standardization (to increase efficiency) and reduce licensing costs. However, an embedded collaboration
feature may translate to greater worker productivity if activated. The collaboration can only be used with additional
investment in training at some future point. However, having the ability to capture that benefit has a PV that can be
estimated. The flexibility component of TEI captures that value.
RISKS
Risks measure the uncertainty of benefit and cost estimates contained within the investment. Uncertainty is measured in two
ways: 1) the likelihood that the cost and benefit estimates will meet the original projections and 2) the likelihood that the
estimates will be measured and tracked over time. TEI risk factors are based on a probability density function known as
“triangular distribution” to the values entered. At a minimum, three values are calculated to estimate the risk factor around
each cost and benefit.
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Appendix C: Forrester And The Age Of The Customer
Technology-empowered organizations now know more about products and services, pricing, and reputation. Your
competitors can copy or undermine the moves you take to compete. The only way to win, serve, and retain customers is to
become customer-obsessed.
A customer-obsessed enterprise focuses its strategy, energy, and budget on processes that enhance knowledge of and
engagement with customers and prioritizes these over maintaining traditional competitive barriers.
CMOs and CIOs must work together to create this companywide transformation.
Forrester has a four-part blueprint for strategy in the age of the customer, including the following imperatives to help
establish new competitive advantages:
Transform the customer experience to gain sustainable competitive advantage.
Accelerate your digital business with new technology strategies that fuel business growth.
Embrace the mobile mind shift by giving customers what they want, when they want it.
Turn big data into business insights through innovative analytics.
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Appendix D: Glossary
Discount rate: The interest rate used in cash flow analysis to take into account the time value of money. Companies set
their own discount rate based on their business and investment environment. Forrester assumes a yearly discount rate of
10% for this analysis. Organizations typically use discount rates between 8% and 16% based on their current environment.
Readers are urged to consult their respective organizations to determine the most appropriate discount rate to use in their
own environment.
Net present value (NPV): The present or current value of (discounted) future net cash flows given an interest rate (the
discount rate). A positive project NPV normally indicates that the investment should be made, unless other projects have
higher NPVs.
Present value (PV): The present or current value of (discounted) cost and benefit estimates given at an interest rate (the
discount rate). The PV of costs and benefits feed into the total NPV of cash flows.
Payback period: The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs)
equal initial investment or cost.
Return on investment (ROI): A measure of a project’s expected return in percentage terms. ROI is calculated by dividing
net benefits (benefits minus costs) by costs.
A NOTE ON CASH FLOW TABLES
The following is a note on the cash flow tables used in this study (see the example table below). The initial investment
column contains costs incurred at “time 0” or at the beginning of Year 1. Those costs are not discounted. All other cash flows
in years 1 through 3 are discounted using the discount rate (shown in the Framework Assumptions section) at the end of the
year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations are not calculated until the
summary tables are the sum of the initial investment and the discounted cash flows in each year.
Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as
some rounding may occur.
TABLE [EXAMPLE]
Example Table
Ref. Metric Calculation Year 1 Year 2 Year 3
Source: Forrester Research, Inc.
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Appendix E: Endnotes
1 Forrester risk-adjusts the summary financial metrics to take into account the potential uncertainty of the cost and benefit
estimates. For more information, see the section on Risks.