[PDF] The Total Economic Impact™ Of Microsoft Teams

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A Forrester Total Economic Impact

Study Commissioned By Microsoft

Key Findings 1

TEI Framework And Methodology 4

The Increasing Importance Of Communication And Collaboration 5

Interviewed And Surveyed Organizations 6

Key Challenges 7

Key Results 7

Composite Organization 9

Communicate 10

Collaborate 14

Customize And Extend 18

Work With Confidence 20

Flexibility 22

Internal Effort 24

Deployment And Migration Professional Services 25

Allocated Microsoft 365 Licenses 25

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, Forresters Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit forrester.com/consulting. © 2019, 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 forrester.com. 1 | Microsoft Teams (Teams) is a shared workspace that brings many of the collaboration and communication solutions within Microsoft 365 into a focused workspace. It integrates with other solutions from Microsoft, third- party vendors, and in-house development to facilitate faster and smarter working both within and outside of the organization. This is all delivered in a secure manner, which improves compliance, manageability, and system performance. Increasing adoption and usage of Teams helps companies improve access to information and free up workers both information and firstline to focus on higher-value activities, thus reducing operating costs, accelerating time-to-market, and fostering greater innovation. Microsoft commissioned Forrester Consulting to conduct a Total Economic study and examine the potential return on investment (ROI) enterprises may realize by adopting Microsoft Teams. The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Teams, as part of Microsoft 365, on their organizations. To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four customers and surveyed another

260 with experience using Teams. Forrester also incorporated findings

from other TEI studies (see Appendix B for a list of previous studies and methodological notes), which included multiple surveys and more than 45 additional interviews with organizations using various aspects of Teams.

Key Findings

Benefits Highlights

Having all solutions in one place

for improved collaboration and information sharing as well a more efficient meetings saved users time (varies based on role):

1.1 to 8.0 hours per

user per week

Three-year net present value per

user: $5,416

Percent of survey respondents

having all of our solutions in one place saves time 88%

2 | The

resources available online in Teams reduces downtime. Having resources available in one cloud-based location reduces user downtime. Across all information and firstline workers, the average reduction is 14.6%. Over three years, the time savings (which is a proxy for business damage or lost revenue) is worth $257,586.

IT and eDiscovery costs are reduced by 13.2%.

Companies reported reduced compliance and eDiscovery effort with Teams. The total three-year savings for the composite organization in relevant compliance costs attributed to Teams is $42,050. Costs. The interviewed organizations experienced the following risk- adjusted PV costs, modeled by the composite organization: efforts to implement and support Teams total $1.1 million. Teams is made available after the enterprise move to Microsoft 365. Therefore, only the incremental costs are included, which contributes ROI 832%

Benefits PV

$30.3 million NPV $27.1 million

Payback

< 6 months

Teams is very positive for

engendering a coworking environment. It gives you everything you want in one place to effectively collaborate.

You can contact each other

quickly and also understand what other people are working on.

VP, consumer products

3 | The

greatly to the high ROI and short payback period. The initial effort is mostly around migrating from Skype for Business to Teams, with ongoing years focused on change management and training. deployment professional services total $348,480. The included professional services are used for the migration from Skype for Business to Teams. Other costs, including managed services, would be included in the business case for a full Microsoft 365 deployment (see

Appendix B).

-five percent of the Microsoft 365 license costs are attributed to the Teams solution, totaling more than $1.8 million. Forrester estimates that 25% of the total value of Microsoft 365 E5 is associated with the solutions within Teams. At the composite organization, 3,500 knowledge workers are on the Microsoft 365 E5 license, which costs $57 per month. The 1,500 firstline workers use the Microsoft 365 F1 license at a cost of $10 per month. Forresters interviews with four existing customers, a survey of 260 other companies, integrated data points from more than 50 interviews from other TEI studies, and subsequent financial analysis found that an organization based on these customers experienced PV benefits of $30.3 million over three years versus PV costs of $3.2 million, adding up to a net present value (NPV) of $27.1 million and an ROI of 832%. 4 |

TEI Framework And Methodology

From the information provided in the interviews and survey, Forrester has con organizations considering including Teams in a Microsoft 365 implementation. The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Teams can have on an organization:

The TEI methodology

helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.

DISCLOSURES

Readers should be aware of the following:

This study is commissioned by Microsoft 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 Microsoft Teams. Microsoft 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 Forresters findings or obscure the meaning of the study. Microsoft provided the customer names for the interviews but did not participate in the interviews. 5 | The Increasing Importance Of Communication And Collaboration In interviews and surveys with companies using Teams, Forrester learned that improving communication and collaboration across organizations is a major component of digital business transformation initiatives. In a survey of 260 organizations for this study, the top three business objectives for implementing Teams were the same, regardless of company size:

1. Increase employee productivity.

2. Improve ability to collaborate across the organization.

3. Enable innovation.

This is consistent with the findings in a Forrester report from January

2019.1

information, coordinate projects, discuss best practices, and build communities within, across, and outside the enterprise. Improved customer experience and business agility result when linear and structured communication encoded in traditional business applications is enhanced by collaboration technology that facilitates how real work gets done. This section of the report includes an accompanying figure:

The report makes three recommendations:

1. Overcome organization structures that inhibit information flow.

2. Promote a stronger digital psychology.

3. Empower and elevate change agents.

Customer interviews and surveys for this TEI study revealed that Teams helps achieve these recommendations. By putting a wide range of information sources and collaboration/communication tools in one place

Top Business

Objectives

1. Increase productivity.

2. Improve collaboration.

3. Enable innovation.

6 | and by empowering users to form teams, organizations can break down information and communication silos. Furthermore, these solutions help transform the culture into one that is more digitally focused. Lastly, Teams empowers individuals to seek out other people and resources to create more value for the organization.

Interviewed And Surveyed Organizations

For this study, Forrester aggregated findings from approximately 45 customer interviews across many other TEI studies (see Appendix B) that looked at the value of various Teams solutions as part of Office 365 and Microsoft 365. We also interviewed four additional companies that are using Teams, bringing the total number of customer interviews to 50. Across the previous interviews, company size ranged from 1,500 to

230,000 employees; the most common ranged from 4,000 to 15,000

employees. More than 20 industries were represented; the most common ones were financial services, manufacturing, education, construction, and consumer products. The customers specifically interviewed for this study include the following: For this study, Forrester conducted a survey of 260 organizations currently using Teams, which covered multiple geographies and sizes (see charts below). The average number of users was 2,448 spread across 116 locations. While benefits did vary slightly by size and geography, there was a high degree of consistency. Where interesting, these differences are highlighted in the study. Base: 260 global IT and business decision makers who use Microsoft Teams Note: Percentages may not total 100 because of rounding. Source: A commissioned study conducted by Forrester Consulting on behalf of Microsoft, January 2019 These companies represent 12 industries. The top three industries were IT professional services, retail, and manufacturing and materials. Once

INDUSTRY REGION INTERVIEWEE NUMBER OF USERS

Telecoms Asia Pacific GM, workplace technology 15,000 Consumer products US HQ, global presence VP, employee experience 30,000 Electronics Asia HQ, global presence GM, IT services 20,000

Technology European HQ, global

presence

Manager, cloud

collaboration platform 45,000 7 | again, there was some variation in benefits by industry, but overall there was a high level of consistency.

Key Challenges

The interviewed and surveyed companies expressed several challenges with their previous collaboration and communication solutions, which are reflected in the composite organization. Below are examples shared by these companies.

Key Results

The interviews revealed several key results from the Teams investment:

Our previous, on-premises

Microsoft solutions were end

of life. We moved to Teams in the cloud to save money and create more flexible working.

GM, telecoms

e have a very strong digital transformation initiative underway. Moving everyone to

Manager, technology

l with the Office 365 suite, which is very important. Our CIO decided that Teams has superior functionality to the other solutions we were considering and integrates better. That will save us

GM, electronics

8 | 80%
in Teams have made my organization more 83%
organization improve In the survey, Forrester asked the extent to which respondents agreed with different benefit categories. The first set of questions was about better engagement and coworking. In all cases, a vast majority of respondents were realizing these benefits from Teams.

The second set of questions asked more specifically about improved communication and collaboration. Here

too, the vast majority of respondents were realizing many benefits from layering Teams on top of their Office

365 or Microsoft 365 implementations.

On a scale of 1 to 5, please rate how much you agree with the following statements regarding improved worker engagement and satisfaction due to

Base: 128 global IT and business decision makers who use Microsoft Teams who experienced improved employee

engagement Note: Percentages may not total 100 because of rounding. Source: A commissioned study conducted by Forrester Consulting on behalf of Microsoft, January 2019 16% 14% 9% 9% 8% 38%
41%
41%
35%
39%
41%
41%
45%
52%
51%

Teams has created better cross-cultural working

Teams has enabled our organization to create more unique, tailored expressions of self Teams has created better on-premises/office-based worker engagement Teams has helped our organization create more inclusion and support a multigenerational workforce

Teams has created better remote worker engagement

1 - Do not agree at all23 - Neutral45 - Completely agree

9 |

Composite Organization

Based on the interviews and surveys, Forrester constructed a TEI framework, a composite company, and an associated ROI analysis that illustrates the areas financially affected. The composite organization is representative of the four companies that Forrester interviewed and the

260 surveyed companies, as well as interviews and surveys from past

studies, and it is used to present the aggregate financial analysis in the next section. The composite organization that Forrester synthesized from the customer interviews has the following characteristics: Description of composite. The composite organization is a global organization that manufactures, distributes, and sells consumer products. Most of its operations are in North America and Europe with some offices in Asia Pacific and South America. In total, there are 7,000 employees, 5,000 of whom are on Microsoft 365 and using Teams. In this group, there are 3,500 information workers and 1,500 firstline workers (in logistics, distribution, and customer-facing roles). The remaining 2,000 employees do not need daily use of teamwork solutions and currently have basic access to email and information via kiosks. Deployment characteristics. The Teams solution is deployed subsequent to a Microsoft 365 implementation. Information workers are on Microsoft 365 E5 licenses, and the firstline workers are on F1 licenses. Teams is integrated with the other Microsoft 365 solutions, including SharePoint, Exchange, Office Apps, and OneDrive. Skype for

Business is migrated into Teams.

Key assumptions of

composite organization

3,500 information workers

1,500 firstline workers

On a scale of 1 to 5, please rate how much you agree with the following statements regarding Team's collaboration and communication features.

Base: 260 global IT and business decision makers who use Microsoft Teams who experienced improved employee

engagement Note: Percentages may not total 100 because of rounding. Source: A commissioned study conducted by Forrester Consulting on behalf of Microsoft, January 2019 1% 1% 0% 0% 0% 16% 13% 16% 10% 10% 42%
46%
52%
50%
49%
38%
37%
31%
38%
39%
Teams has enabled our organization to make better, smarter, more informed decisions Teams has created more clarity and removed confusion from collaboration and communication Persistent/open chat has made it easier to understand conversation context Teams has improved the efficiency and effectiveness of our meetings Teams has helped us create time savings by having all of our solutions in one place

1 - Do not agree at all23 - Neutral45 - Completely agree

10 | QUANTIFIED BENEFIT DATA AS APPLIED TO THE COMPOSITE ORGANIZATION

Communicate

Team ling solutions have been integrated into Teams. This makes it easier for users to leverage the right solution at the right time to communicate with people inside and outside the organization, which can save time. The solutions within Teams can also replace other technologies, which can save an organization money.

More Effective And Efficient Meetings

Interviewed and surveyed organizations all reported significant time savings in conducting meetings. Possibly more importantly, organizations required fewer meetings with Teams in general. These meetings are more effective and efficient because solutions are intuitive and offer better audio/video integration.

In interviews, Forrester heard:

Total Benefits

REF. BENEFIT

YEAR 1 YEAR 2 YEAR 3 TOTAL

PRESENT

VALUE

Atr More effective and efficient

meetings

Communic

ate $1,694,151 $3,388,301 $3,388,301 $8,470,753 $6,886,067

Btr Reduced communication and

collaboration solution costs $323,000 $213,750 $237,500 $774,250 $648,727 Ctr Reduction in overnight trips $63,000 $90,000 $135,000 $288,000 $233,080

Dtr Information worker collaboration

time savings

Collaborate

$3,547,128 $7,058,961 $7,058,961 $17,665,050 $14,362,016

Etr Firstline worker collaboration

time savings $124,584 $245,890 $245,890 $616,365 $501,214 Ftr Faster time-to-decision $84,085 $237,573 $237,573 $559,230 $451,273

Gtr Reduced employee turnover

and onboarding costs $350,361 $700,722 $700,722 $1,751,805 $1,424,082

Htr Application switching time

savings

Extend

$1,180,636 $2,343,624 $2,343,624 $5,867,883 $4,770,983

Itr Working with outside

organizations time savings $186,855 $373,710 $373,710 $934,274 $759,493

Jtr Reduced user downtime

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