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Transcript of The Total Economic Impact™ Of Microsoft Lync 2013 Unified Communications Platform Forrester...
Jonathan Lipsitz, Forrester ConsultingAnthony Vitnell, Dimension DataJeff Salvidar, Microsoft
Understanding the Total Economic Impact of Lync 2013 on your Business
BVAL201
Moderator
Panel
Paul Cannon, Microsoft
Session at a Glance
TEI STUDY FOR LYNC 2013Understanding the results with Jonathan Lipsitz
BUSINESS VALUE OF LYNCA partner’s perspective with Anthony Vitnell
PANEL - Q&AYour chance to question the experts
Where does this work fit in?
EARLYWhy Lync? Why UC?
LYNC 2013 TEI STUDY
Forrester consulting
LYNC 2013 TCO WORK
Marty Parker / Brent Kelly
BVA TOOL
MIDWho?
LATERCan you map this to my business?
TCO TOOL
The Total Economic Impact™ OfMicrosoft Lync 2013Unified Communications Platform
Forrester Consulting
Jonathan LipsitzTEI Consulting Practice
© 2014 Forrester Research, Inc. Reproduction Prohibited 6
Agenda
› What is TEI?
› Analysiso Composite Organization
o Benefits
o Costs
o Flexibility
o Risk
› Financial Summary
Please note: this presentation is an abridged version of the full case study.
For a full explanation of methodology and details on model calculations, please
refer to the full case study that will be available on the Microsoft Downloads center.
© 2014 Forrester Research, Inc. Reproduction Prohibited 7
What is TEI?
© 2014 Forrester Research, Inc. Reproduction Prohibited 8
TEI Framework and Components
The TEI framework centers on quantifying benefits, capturing costs, evaluating flexibility, and adjusting risk.
Total Economic
ImpactRISK
Benefits(Impact on Business)
Costs(Impact on Budget)
Flexibility(Options)
TEI Approach and Methodology
Perform due diligence
Conduct interviews &
survey
Create composite
organization
Construct financial model
Develop case study
© 2014 Forrester Research, Inc. Reproduction Prohibited 9
Analysis
› Composite Organization – companies surveyed and interviewed
› Benefits – looked at those incremental to previous solutions
› Costs
› Flexibility
› Risk
© 2014 Forrester Research, Inc. Reproduction Prohibited 10
7 Companies* Completed A Survey
Why were you looking for a new web conferencing/unified communications solution?**
*One from each of the following industries: electronics, manufacturing, telecommunication services, financial services, insurance, education/non-profit, and sales & distribution
**Select all that apply. Total number of responses.
© 2014 Forrester Research, Inc. Reproduction Prohibited 11
7 Companies Completed A Survey
Why were you looking for a new web conferencing/unified communications solution?
Which of the following benefit areas have you seen or expect to realize?**
**Select all that apply. Total number of responses.
© 2014 Forrester Research, Inc. Reproduction Prohibited 12
5 Companies Interviewed For The Composite Organization
Global Transportation Translation
Special Needs SchoolOil & Gas
Architecture
© 2014 Forrester Research, Inc. Reproduction Prohibited 13
Defined Composite Organization As A Mining Company
› HQ in Singapore
› Ops in Asia, USA & Europe
› 5,000 total users
› Project goals
• Collaboration
• TCO
• Complexity
© 2014 Forrester Research, Inc. Reproduction Prohibited 14
Replaced Existing Solutions With Microsoft Lync 2013
› On premise solution
› Primary deployment in Singapore
› SBAs at US and Europe HQs
› Lync 2013 Plus CALs
› Four virtualized physical servers
› PSTN gateways
› IP phones and headsets
© 2014 Forrester Research, Inc. Reproduction Prohibited 15
Three Incremental Benefits Were Quantified (1 of 3)
1. Eliminated PBX & web conferencing costs• Existing, replacement and new PBX installations
• Multiple web conferencing solutions
• Risk adjustment 10%
• Three year risk adjusted benefits:
› $1.3 Million
© 2014 Forrester Research, Inc. Reproduction Prohibited 16
Three Incremental Benefits Were Quantified (2 of 3)
2. Reduced telephony• Long distance
• Conference calling
• International roaming
• Risk adjustment 10%
• Three year risk adjusted benefits:
› $1.7 Million
© 2014 Forrester Research, Inc. Reproduction Prohibited 17
Three Incremental Benefits Were Quantified (3 of 3)
3. Staffing Optimization• PBX/communication system administrators
• IT (general) support desk
• Drilling specialists
• Risk adjustment 10%
• Three year risk adjusted benefits:
› $3.9 Million
© 2014 Forrester Research, Inc. Reproduction Prohibited 18
Total Three-Year Risk Adjusted Incremental Benefits
Total benefits: $6,862,500
© 2014 Forrester Research, Inc. Reproduction Prohibited 19
There Was Also A General Increase In User Productivity
What specific areas have seen an increase in team efficiency?
© 2014 Forrester Research, Inc. Reproduction Prohibited 20
Total Three-Year Risk Adjusted Costs
Total costs: $3,577,400
© 2014 Forrester Research, Inc. Reproduction Prohibited 21
Risk And Flexibility ConsiderationsRisk
› Used by Forrester to relate more likely outcomes to readers
› Adjust original cost/benefit estimates
Flexibility
› An “option” for creating future value based on previous investments
› Flexibility calculations were not included in the ROI calculations
› Flexibility benefits included:› Better real-time collaboration
› Improved mobile working
› Future opportunities
› Lync for telepresence rooms
› Tighter Skype integration
› Better SharePoint integration
Benefits Adjustment
Eliminated PBX and web conferencing costs 10%
Reduced telephony costs 10%
Reduced headcount 10%
Costs Adjustment
Internal implementation labor 10%
Professional services 5%
Hardware costs 5%
Software licenses 0%
Additional bandwidth 5%
© 2014 Forrester Research, Inc. Reproduction Prohibited 22
Financial Summary ROI / IRRPayback period
NPV---------
(per user)
79% / 113% 14 months $2.5 million---------$493
Thank youJonathan [email protected]
A Partner’s PerspectiveAnthony VitnellMicrosoft Unified Communications LeadDimension Data [email protected]
Who is Dimension Data
• 10+ Year partnership history
• Global Alliance Partner to Microsoft – one of only 32 SIs managed by Corporate
• Microsoft is one of only 2 global strategic partners to Dimension Data
• Global strategic agreement with Microsoft around Unified Communications
• Global strategic agreement with Polycom around Unified Communications
Relationship
• More Lync Certified Masters than any organizations (excluding Microsoft)
• True global delivery procurement, support and delivery capabilities
• Deployed in excess of 1.5 million Lync seats globally• Gold certified in 21 countries on 5 continents• 1,400 Microsoft certifications and 300 MCSEs• Only partner in history to win 11 Global Partner of the Year
awards in 5 years• Global Managed and Support services for Lync Server 2013
Skills and Expertise
• Gather current cost drivers• Support contracts• 3rd party solutions such as conferencing, collaboration tools.• Carrier PSTN connections
• Determine Lync 2013 complete solution cost• Support Contracts• Deployment Costs• Infrastructure/hardware costs
Dimension Data Approach to TEI
Example TEI AssessmentFinancial Results
Lync PlanReturn on Investment (ROI) 35%Payback Period (in months) 10Overall Savings/Expense $ 1,729,820 Operating Savings/Expense N/A Operating Cost Reduction/Increase N/A
Total Cost Comparisons
Year 1 Year 2 Year 3 TOTALCurrent Plan Spending $ 1,927,000 $ 1,047,000 $ 1,191,000 $ 4,165,000 Lync Plan Spending $ 1,538,495 $ 434,078 $ 462,607 $ 2,435,180
Total Savings or Expenses by Plan
Year 1 Year 2 Year 3 TOTALLync Plan $ 388,505 $ 612,922 $ 728,393 $ 1,729,820
Total Three-Year Savings or Expenses by Plan
PanelJonathan Lipsitz, Forrester Consulting
Anthony Vitnell, Dimension DataJeff Salvidar, Microsoft
Moderator
Panel
Paul Cannon, Microsoft
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Wednesday, February 198:30am – 9:45am10:15am – 11:30am1:00pm – 2:15pm2:45pm – 4:00pm4:30pm – 5:45pm
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Birds of a FeatherBirds of a Feather flock together! Join daily breakfast discussions of relevant topics by sitting in the separately designated areas of the Meal Hall. Seating will be sorted in a different way for each Birds of a Feather breakfast:Wednesday, February 19:Where are you from? Asia/Pacific, Eastern & Central Europe, Latin America, Middle East & Africa, US (West, Central & East) and Canada, Western Europe
Thursday, February 20:What is your interest?Best Practices, Business Value, Clients & Mobility, Lync Meetings and Video, Lync Online, Networking, Platform, Server & Manageability, Voice
© 2014 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.
Appendix
© 2014 Forrester Research, Inc. Reproduction Prohibited 38
Financial Term GlossaryPV (Present Value) – value of a stream of cash flows over several years
NPV (Net Present Value) – PV of benefits – PV of costs = NPV
Payback period - the length of time required for an investment to recover its initial outlay in terms of profits or savings
ROI (return on investment) –
gain from investment – cost of investment
cost of investment
IRR (internal rate of return) – IRR is the interest rate that will bring a series of cash flows (positive and negative) to a NPV of zero.
Risk adjusted ROI – a more conservative view of ROI, with risk adjustments for costs and benefits
© 2014 Forrester Research, Inc. Reproduction Prohibited 39
Photo Credits›All photos used under Creative Commons license.
• http://creativecommons.org/licenses/by/2.0/
›Credits› Slide 8
• Rental car http://www.flickr.com/photos/53371251@N08/6243477453/ - Tom Wolf
• Translation http://www.flickr.com/photos/87775696@N00/2636807547/ - WordShore
• School http://www.flickr.com/photos/80384851@N00/3176885291/ - loop_oh
• Oil http://www.flickr.com/photos/40775084@N05/6969282139/ - katsrcool
• Drafting http://www.flickr.com/photos/26026745@N00/5378467111/ - tecrekka
› Slide 19: http://www.flickr.com/photos/29057345@N04/3772032956/ - Duncan
› Slide 11: http://www.flickr.com/photos/57413424@N00/320310144/ - dannyman
› Slide 13: http://www.flickr.com/photos/47833064@N03/6088115196/ - a fairfaxcounty