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This tool is a comprehensive general-purpose business value model (ROI calculator) to support the development of business
cases for enterprise-scale information technology-based projects. It provides a robust structure to help organizations assess
the business value (costs, benefits, TCO, and ROI) of technology projects/initiatives.
This workbook can be used as a standard corporate business case template for technology-based initiatives. It can also be
used by consultants and technology vendors to articulate the business value of their products and solutions.
On This Worksheet
Workbook Table of Contents
Key Features
Model Components / Flowchart
Instructions
Disclaimer
Terms of Use / Use Rights / End-User License Agreement (EULA)
Support
Estimates user time/labor savings enabled by the solution. First estimates the amount of
time users spend conducting common business activities then estimates how much the
Productivity User Productivity Benefits
solution is expected to increase the efficiency of conducting key activities. The time savings
is discounted using a "Productivity Conversion Factor", then converted into $ value.
Estimates how and how much the solution is expected to increase revenue. The benefit is
Revenue Revenue Impact
the profit on the incremental revenue.
Key Performance Indicator Assessment Assessment of how the solution may impact a variety of business KPIs. In this model, these
KPIs
(Optional) KPI changes are not converted into financial benefits.
Summary of costs & benefits by type; Cash flow analysis; calculation of ROI, payback period,
ROI Financial Analysis
NPV, and IRR; and graphs
Key Features
Supports most types of enterprise-scale technology initiatives. Includes sample cost and benefit data for 18 common initiative types
Comprehensive assessment of initiative costs and benefits
Costs: hardware; software; IT labor, training, and services; and user labor and training
Benefits: IT labor TCO savings, other direct cost savings, user productivity benefits, revenue growth, and non-financial key performance
indicators
Calculates annual on-going IT Labor TCO (total cost of ownership)
Comprehensive financial analysis. Calculates project cash flow, cost-benefit analysis, ROI, NPV, IRR, and payback period
Supports rapid (30 minute) or detailed (3+ day) assessments. This model was designed to provide either a rapid assessment (by just
entering/selecting basic organizational profile and initiative information) or a very detailed (3+ day) assessment by modifying hundreds of
detailed inputs.
Protected, yet customizable: Essentially all values can be modified. Many custom cost and benefit items can be added. Formulas and other
areas of the model that should not be modified are protected (locked) to maintain intended functionality. HCR can provide additional fee-based
customization, if desired.
Based on industry-standard calculations and industry-leading methodologies. It is as transparent as possible so the user is able to
understand how the costs and benefits are calculated.
Provides research-based default values. Default values (labor costs, user type mix, financial information, etc.) are provided based on your
industry, geography, organization size and initiative type to enable more rapid assessments. Extensive research was conducted to find highly
reputation sources for these. Data/estimate sources are listed. You may overwrite any of the pre-populated defaults.
User-friendly. The workbook contains instructions, descriptions, and references. Results are updated real-time and are displayed graphically
throughout the model. Although the model is user-friendly, we recommend users have at least a moderately-advanced understanding of
business value concepts to develop a credible business case.
Free download. No registration required.
Instructions
- Read the "Terms of Use" and "Disclaimer".
- Before making any changes to the workbook, save the workbook under a different name. This will preserve the original default values and formulas
so you may return to them at a later time.
- Navigate the workbook using the worksheet tabs at the bottom. Start with the "Profile" tab. This worksheet contains the most important cost and
benefit drivers. You will also see a summary view of the costs and benefits of the scenario modeled. Enter/edit data in the "input" (light yellow) cells.
Edit (overwrite) the default values to customize results for your particular organization/initiative.
- Review the ROI worksheet to pre-view costs and benefits.
- Review the detailed default metrics and calculations in the "Costs" (red tab) and Benefit (green tabs) worksheets. Although not required, we
recommend completing the Costs worksheet first to more clearly define the initiative. Not all benefit worksheets are appropriate for all initiative types
(for example, some infrastructure initiatives may not have any revenue impacts).
- The "Financial Analysis" report (or any other worksheet) can be printed or saved as PDF/XPS. Portions of the model may be incorporated (e.g.
Paste Special As Picture) into a more comprehensive business case-type report.
- Additional instructions are provided in the model
- If fee-based consultative guidance and/or customizations are desired, contact HCR.
This information is provided to you as a tool as is with the understanding that there are no representations or warranties of any kind either express or
implied.
In no event shall HCR or suppliers be liable for any damages, including those arising as a result of HCR or supplier negligence, whether those
damages are direct, consequential, incidental, or special, flowing from your use of or inability to use the tool, or information provided herewith, or
results of the tool's use, even if HCR or suppliers has been advised of the possibility of such damages.
Support
HCR does not provide free support for free downloads. However, we do welcome any comments, suggestions, and feedback.
HCR can provide fee-based services, including telephonic support, workbook customizations, and comprehensive consulting engagements to assist
with business case development and validation.
Copyright, 2006-2008, Hall Consulting & Research LLC, All Rights Reserved. www.hallcr.com
Total Number of PCs in Scope 5,000 IRR (Internal Rate of Return) 124%
Number of PC Users in Scope 5,000 Payback Period 9 Months
C o st s & Be n efi t s ($ / P C )
This typically is approximately the same as the number of PCs. It is used to scale most costs and benefits. Number of PCs 5000
% of PC # of PC
Users Users
Portion of PC Users that are Information
44% 2,223
Workers (IWs)
Total Costs Vs Benefits (per PC)
Portion of PC Users that are Data-entry or
56% 2,777 $6,000
Structured-Task Workers
$5,000
Total PC-Users (# of Employees that use PCs
100% 5,000
on a regular basis) $4,000
Information Workers (Knowledge Workers) perform non-routine, cognitive, or creative work that often requires both structured and
unstructured information inputs from multiple sources -- and that is not repeated throughout the course of the work day or work week. $3,000
$5,339
Examples include a product manager, analyst, accountant, engineer, sales executive, CFO, or CIO.
Data-entry and Structured Task Workers perform routine, structured tasks typically in a repeated manner. Examples include a customer $2,000
service representative, insurance claims processor, or inside sales representative.
$1,000 $1,743
$-
Initiative Type - Select the project type from the Costs (3-Yr) Benefits (3-Yr)
drop-down box that most closely matches the PC Hardware & Operating System Upgrades
initiative to be modeled
This pre-populates all costs and benefits with sample data based on the initiative type. The sample data is only provided at a moderate
level of detail. If you want to start with a blank slate (all zeros), select "No Sample Data - Zero-out all costs/benefits". Sample data should
Costs ($ per PC)
not be used for making investment decisions. Sample data is not meant to represent average/typical project results and is not based on
research. It should only be used as a starting point for assessing the business value of your project. Initiative costs and benefits will differ Cost Summary (per PC)
substantially from one organization to another.
$2,000
$1,800
End-User Labor &
$1,600 $343 Training
$1,400
Financial Information $1,200 $268
IT Labor, Services, &
Default values are provided based on inputs above. Defaults may be adequate for rapid/ballpark assessments, but $1,000 $253 Training
otherwise should be reviewed/modified. $800
Organization Revenue ($ Millions) $ 3,925 $600 Software
Source of defaults is based on analysis of data from Fortune 500, Fortune Magazine and is industry-dependent (varies depending on $400 $879
industry selected above) Hardware
$200
Margin % of Revenue (Net profit margin of new $-
10.3%
revenue enabled by the initiative) 3-Year Total
Default value is based on industry average. This margin rate is used to calculate the business value of incremental revenue enabled by the
Benefits ($ per PC)
initiative
Discount Rate / Cost of Capital (WACC) 10% Benefit Summary (per PC)
Used in Net Present Value calculations
$6,000
Duration of analysis (years) - Select from drop- Revenue Growth
3 $5,000
down box. $1,070
A 3-year life-expectancy is standard for many IT projects. Some major initiatives may be 5 years. User Productivity
$4,000
Benefits
$1,616
$3,000
Labor Costs $400 Other Direct Cost
$2,000 Savings
Default values are provided based on inputs above. Defaults may be adequate for rapid/ballpark assessments, but
otherwise should be reviewed/modified. $2,253
$1,000 IT Labor/Services
Burden rate (labor overhead as a % of cash TCO Savings
25%
compensation)* $-
Standard Work Hours per Year 1,824 3-Year Total
* Non-cash compensation, such as benefits and Social Security
Average Burdened Burdened
Ann'l Cash Annual Weekly Burdened Costs & Benefits ($ per PC)
Comp- Burden Labor Labor Hourly Annual On- 3-Year
ensation** Rate Cost Rate rate One-Time Going Total
IT Staff Labor Costs Initiative Costs
Systems/Network Administrator/Engineer $ 93,190 25% $ 116,488 $ 2,240 $ 63.86 Hardware $ 606 $ 91 $ 879
Software Developer/Engineer $ 96,675 25% $ 120,844 $ 2,324 $ 66.25 Software $ 150 $ 34 $ 253
Help Desk / Technical Support $ 62,781 25% $ 78,477 $ 1,509 $ 43.02 IT Labor, Services, & Training $ 213 $ 18 $ 268
Source of salary data: based on HCR analysis of Bureau of Labor Statistics data and various 2007 Salary Surveys. Salary data is scaled End-User Labor & Training $ 273 $ 24 $ 343
based on industry, geography, and organization size.
Total $ 1,242 $ 167 $ 1,743
PC User Labor Costs Initiative Benefits
IWs (Information Workers) $ 74,937 25% $ 93,672 $ 1,801 $ 51.36 IT Labor/Services TCO Savings $ - $ 751 $ 2,253
Data-entry or Structured Task Workers $ 58,937 25% $ 73,672 $ 1,417 $ 40.39 Other Direct Cost Savings $ 75 $ 108 $ 400
Average (weighted) $ 66,050 $ 82,563 $ 1,811 $ 45.26 User Productivity Benefits $ - $ 539 $ 1,616
** Base compensation plus bonuses Revenue Growth $ - $ 357 $ 1,070
Source of salary data: based on HCR analysis of U.S. Department of Labor, Bureau of Labor Statistics data; The World Bank, World Total $ 75 $ 1,755 $ 5,339
Development Indicators Database; and Organisation for Economic Co-operation and Development. Salary data is scaled based on industry,
geography, and organization size.
Copyright, 2006-2008, Hall Consulting & Research LLC, All Rights Reserved. www.hallcr.com
374293471.xls Profile 4 of 30
Description of Sample Initiatives (for reference only)
Sample data should not be used for making investment decisions. Sample data is not meant to represent average/typical project
results, is not based on research, and is not provided at the lowest level of detail. It should only be used as a starting point for
assessing the business value of your project. Initiative costs and benefits will differ substantially from one organization to another.
Methods and software to ease compliance with regulations BearingPoint, Deloitte, Ernst & Young, IBM, KPMG,
ITIL, COBIT, Six Sigma, CMM, ISO 17799/9000, PMBOK PricewaterhouseCoopers
Compliance, Maturity models (Microsofts Infrastructure Optimization
Governance, Maturity Model)
Risk Portfolio management, IT-business alignment, balanced
Business continuity disaster planning / recovery
IT governance, policies, internal audit, monitoring
Outsource IT and business processes, applications, Accenture, Capgemini, Cognizant, CSC, EDS, IBM, HP, Siemens,
infrastructure, or initiatives to reduce costs and improve results CompuCom, Infosys, Keane, Perot Systems, Satyam, TCS, Wipro,
Getronics, Unisys
Outsourcing Infrastructure management: helpdesk, on-site support, AT&T, IBM, MCI-Digex, Qwest, Rackspace, Verio
desktop management, data center services
BPO business process outsourcing
Offshore services
Application outsourcing, web hosting
Wireless e-mail, mobile access to line-of-business applications, Microsoft Windows Mobile, Palm, Symbian
VPN, mobile remote access, telecommuting RIM BlackBerry, Nokia, Apple iPhone, Sharp, Motorola/Symbol,
Wireless/ Fujitsu,
Mobility
Handheld devices, smartphone, PDAs 3Com, Cisco Systems, Nortel Networks, Siemens
Wireless LAN/WAN, 802.11n, WiMAX, CDMA, UMTS, GPRS, Equant, AT&T, MCI, BT, Sprint, Verizon
EDGE
374293471.xls Initiatives 5 of 30
Description of Sample Initiatives (for reference only)
Business Technology Initiatives
Initiative Type Key Features, Capabilities, Benefits Sample Vendors And Products
Word processing, spreadsheets, personal databases, Microsoft Office 2007
Office
OpenOffice.org
Productivity
Software Sun StarOffice
Google Apps
E-mail, calendaring/scheduling, task management, unified Microsoft SharePoint, Exchange, Live Meeting
Real-time collaboration, presence, instant messaging, web IBM Domino / Lotus Notes
Messaging/ Social computing, blogs, wikis Oracle Collaboration Suite
Collaboration Team workspaces, project management, discussion threads, Sun Java Enterprise System
Novell GroupWise
WebEx Communications
Document management, web content management, Microsoft SharePoint
Knowledge management, information management EMC Documentum, FileNet, Hummingbird, IBM Content
Content Management, Interwoven, Mobius Management Systems, Open Text,
Management Oracle Content Services, Stellent, and Vignette
374293471.xls Initiatives 6 of 30
Implementation Costs
This worksheet estimates all costs needed to implement the initiative, including hardware, software, IT labor/services, and
user labor costs.
Hardware
Cost per Unit
Annual
Unit Label Unit Quantity One-Time* Recurring* 3-Year Total Comments
Client Hardware
PCs PCs 2,500 $ 1,000 $ 150 $ 3,625,000
PC Upgrades PCs 2,500 $ 200 $ 30 $ 725,000
Mobile Devices - $ 200 $ 30 $ -
Other - $ 200 $ 30 $ -
Sub Total $ 3,000,000 $ 450,000 $ 4,350,000
Server Hardware
Servers Servers 1.7 $ 15,000 $ 2,250 $ 36,250
Storage (including backups,
redundancy, power supplies, Terabytes 0.5 $ 10,000 $ 1,500 $ 7,250
etc.)
Network Equipment - $ - $ -
Other - $ - $ -
Sub Total $ 30,000 $ 4,500 $ 43,500
Total $ 3,030,000 $ 454,500 $ 4,393,500
* One-Time costs are typically incurred at the beginning of the project. Annual Recurring costs are on-going costs necessary throughout the life of the project.
Software
The software license is typically a one-time cost. Software maintenance (Software Assurance) is an optional annual recurring cost
Annual
Recurring
License One-Time (Main-
Quantity (License) tenance) 3-Year Total Comments
Client Software
Application A 1,500 $ 300 $ 69 $ 760,500
Application B - $ 100 $ 23 $ -
Desktop Operating System 2,500 $ 100 $ 23 $ 422,500
Client Access Licenses (CALs) 1,500 $ 10 $ 2 $ 25,350
Other $ -
Sub Total $ 715,000 $ 164,450 $ 1,208,350
Server Software
Server Operating System 1.7 $ 2,000 $ 460 $ 5,633
Database 2 $ 8,000 $ 1,840 $ 22,533
Server Application 2 $ 10,000 $ 2,300 $ 28,167
Utilities - $ - $ -
Other $ -
Sub Total $ 33,333 $ 7,667 $ 56,333
Total $ 748,333 $ 172,117 $ 1,264,683
374293471.xls Costs 7 of 30
Implementation Costs
Annual On-Going
This worksheet Labor/Services
estimates all costs needed to implement the initiative, including hardware, software, IT labor/services, and
user labor costs. Unit Quantity
Annual
Unit* One-Time Recurring Cost per Unit 3-Year Total Comments
Maintenance Full Time Equivalents 0.20 $ 116,488 $ 69,893
Support FTEs 0.20 $ 116,488 $ 69,893
Customization FTEs 0.10 $ 116,488 $ 34,946
Development FTEs 0.20 $ 116,488 $ 69,893
Upgrades FTEs 0.04 $ 116,488 $ 13,979
Performance Tuning FTEs 0.04 $ 116,488 $ 13,979
External Services FTEs - $ 174,731 $ -
Bandwidth - $ -
Other - $ -
Total $ - $ 90,860 272,581
*FTE (Full Time Equivalent): 1 full time employee is equivalent to 2 employees each dedicating 50% of their work time to the task
IT Training
Independent
Formal (Classroom) Internal Learning (Self-
Training Training Study) 3-Year Total Comments
374293471.xls Costs 8 of 30
Implementation Costs
End-User Training
This worksheet estimates all costs needed to implement the initiative, including hardware, software, IT labor/services, and
user labor costs. Independent
External Classroom Internal Learning (Self-
Training Training Study) Total Comments
% of Employees trained 10% 20% 40%
Employees trained 500 1,000 2,000
Hours of training per employee 4 3 8
Labor Cost per Hour $ 45 $ 45 $ 45
Training time (labor cost) $ 181 $ 136 $ 362
Class and Additional Fee Cost per
$ 100 $ 60 $ 3
trainee
Cost per Employee Trained $ 281 $ 196 $ 365
Total Cost $ 140,530 $ 195,795 $ 729,238 $ 1,065,562
374293471.xls Costs 9 of 30
Implementation Costs
Annual including hardware, software, IT labor/services, and
This worksheet estimates all costs needed to implement the initiative,
user labor costs. One Time Recurring 3-Year Total One Time Annual Recurring 3-Year Total
Hardware $ 3,030,000 $ 454,500 $ 4,393,500 $ 606 $ 91 $ 879
Software $ 748,333 $ 172,117 $ 1,264,683 $ 150 $ 34 $ 253
IT Labor, Services, & Training $ 1,067,435 $ 90,860 $ 1,340,016 $ 213 $ 18 $ 268
End-User Labor & Training $ 1,364,310 $ 117,689 $ 1,717,376 $ 273 $ 24 $ 343
Total $ 6,210,079 $ 835,166 $ 8,715,576 $ 1,242 $ 167 $ 1,743
$1,800
$8,000,000 $1,717,376 End-User Labor End-User Labor &
& Training $1,600 $343 Training
$7,000,000
$1,400
$1,340,016
$6,000,000 IT Labor, $268
$1,200 IT Labor, Services, &
Services, & Training
$5,000,000 $1,264,683 Training $1,000 $253
$4,000,000 $800
Software Software
$3,000,000 $600
$2,000,000 $4,393,500 $879
Hardware $400 Hardware
$1,000,000 $200
$- $-
3-Year Total 3-Year Total
Total Implementation Costs Total Costs ($ per PC) Total Implementation Costs
(Per PC)
$10,000,000 End-User Training $2,000
Copyright, 2006-2008, Hall Consulting & Research LLC, All Rights Reserved. www.hallcr.com
374293471.xls Costs 10 of 30
IT Labor TCO and TCO Savings
This worksheet estimates IT Labor TCO by estimating/allocating labor effort across common IT staff activities (as a % of total by category). The number of FTEs (full-time equivalents) the calculated. Then the likely % reduction in
effort (for existing activities only) enabled by the solution is estimated. All increases in labor (required to implement/support the new solution) should be included in the "Costs" worksheet. As-is (current) and To-be (after the solution
is fully implemented) TCO is calculated on displayed in bar charts to the right. The benefit (summarized at the bottom) is any annual on-going TCO savings enabled by the initiative.
Average
% of Burdened As-Is Total IT Labor TCO /
Total* FTEs* Cost** TCO / PC Year Comments
PC/User administration, security, sw/hw
PC Management Services deployment, data backup 17% 27 $116,488 $ 625 $ 3,124,482
Directory services, group policy objects, sw Data Mgmt, Ba ckup & Restore
Tools/GPO Management distribution, & other tools 13% 3.5 36.0% $ 82 $ 53 $ 29.60
Tools /GPO Ma na gement
Advanced diagnostics/troubleshooting -
3rd Level Support escalated from help desk 19% 5.2 36.0% $ 120 $ 77 $ 43.33 3rd Level Support
374293471.xls IT Labor 11 of 30
IT Labor TCO and TCO Savings
Help Desk (Tech Support)
As-Is TCO Help Desk TCO
Proprietary Applications Custom developed application support 30% 7.5 40.0% $ 118 $ 71 $ 47.04 To-Be TCO
$- $20 $40 $60 $80 $100 $120 $140
Standard Desktop Software Commercial off-the-shelf applications 15% 3.8 40.0% $ 59 $ 35 $ 23.66
Proprietary Applications TCO ($/PC)
Operating Systems Operating system-related issues 15% 3.7 40.0% $ 58 $ 35 $ 23.14
Hardware (except printers) Hardware troubleshooting/repair 12% 3.1 30.0% $ 49 $ 34 $ 14.68 Standard Desktop Software
Operating Systems
Data Comm./Network Networking 10% 2.5 30.0% $ 39 $ 27 $ 11.57
Hardware (except printers)
Password Resets Reset user passwords 5% 1.2 70.0% $ 19 $ 6 $ 13.65
Data Comm./Network
Databases Database troubleshooting 5% 1.1 20.0% $ 18 $ 14 $ 3.60
Password Resets
Service Requests Forward requests for other services 4% 1.1 20.0% $ 17 $ 13 $ 3.31 Databases
Voice Communications Telecommunications 3% 0.7 20.0% $ 10 $ 8 $ 2.07 Service Requests
Printers Printer troubleshooting/repair 2% 0.6 30.0% $ 10 $ 7 $ 2.93 Voice Communications
Others 0% - 30.0% $ - $ - $ - Printers
Total ($ per PC) 25 $ 146 $ 396 $ 251 $ 145.64 Others
Total (% of Total TCO) 100% 36.8%
Server & Network Mgmt Services As-Is TCO Server & Network Mgmt TCO
Manage network communication
Network management infrastructure 12% 4.0 15.0% $ 93 $ 79 $ 13.89 To-Be TCO
0 0 0 0 0 0 0 0 0
Deployment, configuration, administration, $- $2 $4 $6 80 $10 $12 $14 $16 $18 $20
$TCO
Hardware management support 11% 3.6 15.0% $ 85 $ 72 $ 12.74 ($/PC)
Finance Budgeting and chargeback tasks 18% 4.5 28.0% $ 101 $ 73 $ 28.20 Purchasing
Training IT and end-user training 16% 4.0 7.0% $ 90 $ 83 $ 6.27 Finance
Senior management Senior IT management overhead 28% 7.1 7.0% $ 157 $ 146 $ 10.96
Training
Other Administration and other 5% 1.3 7.0% $ 28 $ 26 $ 1.96
Senior management
Total ($ per PC) 25 $ 71 $ 559 $ 488 $ 71.27
Total (% of Total TCO) 100% 12.7% Other
374293471.xls IT Labor 12 of 30
IT Labor TCO and TCO Savings
Summary
IT Labor TCO / PC / Year Full-Time Equivalents
As-Is To-Be Savings To-Be
TCO TCO Savings % As-Is FTEs FTEs Savings
PC Management Services $ 625 $ 392 $ 232.87 37% 26.8 19.5 7.3
Help Desk (Tech Support) $ 396 $ 251 $ 145.64 37% 25.2 18.5 6.8
Server & Network Mgmt Services $ 774 $ 601 $ 173.46 22% 33.2 27.1 6.1
Application Development $1,144 $ 1,016 $ 127.67 11% 47.3 42.6 4.8
Administration & Other $ 559 $ 488 $ 71.27 13% 25.2 22.4 2.9
Total $3,499 $ 2,748 $ 751 21% 157.9 130.1 27.8
Copyright, 2006-2008, Hall Consulting & Research LLC, All Rights Reserved. www.hallcr.com
374293471.xls IT Labor 13 of 30
Direct Cost Savings
This workbook estimates various direct IT and business cost savings enabled by the solution.
60 10
Average Watts per monitor (CRT/LCD mix)
Total 200 810
kW-hours per day 3.36 19.20
Electricity cost per kW-hour $ 0.09 $ 0.09
Electricity cost per PC/Server per year $ 110 $ 631
Number of PCs/Servers 5,000 100
% PCs/Servers likely to be impacted by
50% 100%
power saving measures
Summary
Organization Total Per PC
Annual
IT Savings One Time Recurring 3-Year Total One Time Annual Recurring 3-Year Total
Software - Clients $ 300,000 $ 205,000 $ 915,000 $ 60 $ 41 $ 183
Software - Servers $ 39,800 $ 5,970 $ 57,710 $ 8 $ 1 $ 12
Hardware $ 36,000 $ 5,400 $ 52,200 $ 7 $ 1 $ 10
IT Services $ - $ 24,000 $ 72,000 $ - $ 5 $ 14
Power/Electricity Usage $ 224,037 $ 672,111 $ - $ 45 $ 134
Other IT Costs $ - $ 3,900 $ 11,700 $ - $ 1 $ 2
Total $ 375,800 $ 468,307 $ 1,780,721 $ 75 $ 94 $ 356
Business Savings
Travel Expenses $ 73,355 $ 220,066 $ - $ 15 $ 44
Business Services $ - $ - $ - $ - $ - $ -
Other Business Expenses $ - $ - $ - $ - $ - $ -
Total $ - $ 73,355 $ 220,066 $ - $ 15 $ 44
$450
$400 $-
Other Business Expenses
$44
$350 $2
Business Services
$-
3-Year Total
Copyright, 2006-2008, Hall Consulting & Research LLC, All Rights Reserved. www.hallcr.com
On This Worksheet:
Allocation of Time Across Business Activity Categories
Allocation of Time Across Detailed Activities and Efficiency Improvements
Summary of Productivity Improvements (Time Saved)
Business Value of Time Saved
40.0 12.0
Hours per Week
374293471.xls Productivity 17 of 30
User Productivity Benefits Assessment
Time by Business Activity - Collaborative Computing Time by Business Activity - PC Systems Management
8.0 1.6
eek
eek
Availability &
Hoursper W
Hoursper W
7.0 0.7 1.4 0.1 Reliability
Other
0.1
6.0 1.2 1.2 System UI
0.2
Coordination / Navigation
5.0 1.1 Project Mgmt 1.0 0.2
Security & Privacy
4.0 0.8
Workflow 0.4 0.0 Mobility & Remote
3.0 0.6 0.1 Connectivity
(routing) 0.1
4.4 0.0
2.0 0.4 0.2 Performance
Document 0.5 Support, Self-Help,
1.0 0.1
0.2 Collaboration 0.2
0.3 0.3 & Learning
0.5
0.0 0.0
Info Wrkr Task Wrkr Info Wrkr Task Wrkr
374293471.xls Productivity 18 of 30
User Productivity Benefits Assessment
Collaborative Computing Time % Hours / Week Efficiency Time Saved
Task Info Task Improve- Info Task
Activity Info Wrkr Wrkr Wrkr Wrkr ment Wrkr Wrkr Comments
Document Collaboration
Document collaboration (collaborative authoring,
sharing, reviewing, debating, mark-up, change 60% 60% 2.65 0.30 0% 0.00 0.00
consolidation)
Meetings (document-collaboration-focused) 35% 35% 1.55 0.17 0% 0.00 0.00
Document management 5% 5% 0.22 0.02 0% 0.00 0.00
Total (Time % must sum to 100%) 100% 100% 4.42 0.49 0% 0.00 0.00
Workflow (routing)
Workflow activities paper-based (review,
50% 50% 0.55 0.15 0% 0.00 0.00
approval, routing, signature collection)
Workflow activities - electronic 50% 50% 0.55 0.15 0% 0.00 0.00
Total (Time % must sum to 100%) 100% 100% 1.10 0.29 0% 0.00 0.00
Coordination / Project Mgmt
Document-creation-intensive project
coordination/management (issue tracking, task 70% 70% 0.83 0.11 0% 0.00 0.00
management, document status)
Coordination of other business activities 30% 30% 0.35 0.05 0% 0.00 0.00
Total (Time % must sum to 100%) 100% 100% 1.18 0.16 0% 0.00 0.00
Other
Reporting - Disseminating and managing
70% 90% 0.46 0.09 0% 0.00 0.00
documentation/reports
Social networking (connecting people, sharing
30% 10% 0.20 0.01 0% 0.00 0.00
re-usable knowledge)
Other 0% 0% 0.00 0.00 0% 0.00 0.00
Total (Time % must sum to 100%) 100% 100% 0.66 0.11 0% 0.00 0.00
Total 7.37 1.05 0% 0.00 0.00
Time Saved
PC Systems Management Time % Mins / Week Efficiency (Mins)
Task Info Task Improve- Info Task
Activity Info Wrkr Wrkr Wrkr Wrkr ment Wrkr Wrkr Comments
Support, Self-Help, & Learning
Support time (helpdesk) 20% 20% 5.9 3.4 15% 0.9 0.5
Unproductive resolution lag time (downtime) 15% 15% 4.4 2.5 15% 0.7 0.4
PC upgrade; OS re-install 5% 5% 1.5 0.8 23% 0.3 0.2
Install SW, patches, peripherals, drivers 20% 20% 5.9 3.4 25% 1.5 0.8
Self-help - system "how-to" questions; Peer
40% 40% 11.8 6.7 6% 0.7 0.4
support
Total (Time % must sum to 100%) 100% 100% 29.46 16.84 14% 4.06 2.32
Performance
Processor/HDD response time 30% 30% 6.3 3.2 50% 3.2 1.6
Network/Server response time 30% 30% 6.3 3.2 50% 3.2 1.6
PC start-up, shut-down, resume 40% 40% 8.4 4.2 20% 1.7 0.8
Total (Time % must sum to 100%) 100% 100% 21.05 10.52 38% 8.00 4.00
Mobility & Remote Connectivity
Remote & wireless connectivity, Network issues 20% 20% 2.9 0.5 10% 0.3 0.1
Lost productivity due to dead laptop battery 15% 15% 2.1 0.4 12% 0.3 0.0
Laptop shut-down, start-up, wake/resume 45% 45% 6.4 1.1 12% 0.8 0.1
Time managing/accessing files for off-line use 20% 20% 2.9 0.5 9% 0.3 0.0
Total (Time % must sum to 100%) 100% 100% 14.31 2.53 11% 1.57 0.28
Security & Privacy
Security pre-cautions 90% 90% 9.8 5.7 18% 1.7 1.0
Virus, adware and other security issues 5% 5% 0.5 0.3 25% 0.1 0.1
Intrusion, unauthorized use, data loss 5% 5% 0.5 0.3 25% 0.1 0.1
Total (Time % must sum to 100%) 100% 100% 10.94 6.31 18% 1.99 1.15
System UI Navigation
User Interface navigation 75% 75% 3.8 2.5 18% 0.7 0.4
Change system settings, preferences 25% 25% 1.3 0.8 18% 0.2 0.1
Total (Time % must sum to 100%) 100% 100% 5.05 3.37 18% 0.88 0.59
Availability & Reliability
Recovering from crashes/conflicts 70% 70% 2.4 1.8 35% 0.8 0.6
Rework due to lost work 30% 30% 1.0 0.8 35% 0.4 0.3
Total (Time % must sum to 100%) 100% 100% 3.37 2.53 35% 1.18 0.88
Total (Hours per Week) 1.40 0.70 21% 0.29 0.15
Non-Computing-Related Activities 15.08 22.80 0% 0.00 0.00
Total 35.1 35.1 1% 0.5 0.4
374293471.xls Productivity 19 of 30
User Productivity Benefits Assessment
Summary of Productivity Improvements (Time Saved)
The table below summarizes time saved by business activity category.
Summary
Individual Computing 11.2 11.0 0.18 2% 10.5 10.2 0.29 3% 10.8 10.6 0.2 2%
Collaborative Computing 7.4 7.4 0.00 0% 1.1 1.1 0.00 0% 3.9 3.9 0.0 0%
PC Systems Management 1.4 1.1 0.29 21% 0.7 0.5 0.15 22% 1.0 0.8 0.2 21%
Non-Computing-Related Activities 15.1 15.1 0.00 0% 22.8 22.8 0.00 0% 19.4 19.4 0.0 0%
Total 35.1 34.6 0.5 1.4% 35.1 34.6 0.4 1.3% 35.1 34.6 0.5 1.3%
374293471.xls Productivity 20 of 30
User Productivity Benefits Assessment
Business Value of Time Saved
The table below calculates the value of time saved. Annual value is calculated by multiplying the hours saved per year times fully burdened hourly rate. The adjusted
value is discounted by the "Productivity Conversion Factor". The adjusted value is the productivity benefit value used elsewhere in the workbook.
Summary
Individual Computing $ 484 $ 600 $ 549 $ 274 $ 274
Collaborative Computing $ - $ - $ - $ - $ -
PC Systems Management $ 787 $ 323 $ 529 $ 265 $ 265
Non-Computing-Related Activities $ - $ - $ - $ - $ -
Total $ 1,271 $ 923 $ 1,078 $ 539 $ 539
Copyright, 2006-2008, Hall Consulting & Research LLC, All Rights Reserved. www.hallcr.com
374293471.xls Productivity 21 of 30
Revenue Increase Enabled by the Solution
This worksheet estimates incremental revenue enabled by the solution. Not all projects will have credibly quantifiable revenue impacts. Revenue impacts can be difficult to accurately assess.
Research, analysis, and supplemental modeling is likely needed to credibly estimate true revenue impacts. One key is to target (at a detailed level) precisely what portion of revenue is likely to be
impacted (the segment) and how the solution is enabling the revenue increase (the driver). This model assumes the initiative will enable a one-time revenue increase (the same annual revenue
benefit throughout the life of the solution).
Note that the benefit is the marginal profit on the incremental revenue, not the revenue itself. We recommend using net operating profit, not gross margin: in the long run, on average, fixed costs
tend to increase at the same rate as revenue growth.
Channels/Geograph
Customer Service
Products/Services
Improved Product
Improved Sales
New/Expanded
New/Enhanced
Availability (fill
rate, up-time)
Efectiveness
Efectiveness
Marketing
Improved
Improved
Profit
Addressed Segments (products, Revenue Margin
Other
channels, geographies, business (% of (% of Annual
ies
unit, and/or markets) Total) Revenue ($000) Sales) Benefit ($000) Comments
Segment A1 3.0% $ 117,744 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 243
Segment A2 3.0% $ 117,744 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 243
Segment A3 3.0% $ 117,744 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 243
Segment A4 2.0% $ 78,496 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 162
Segment B1 2.0% $ 78,496 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 162
Segment B2 2.0% $ 78,496 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 162
Segment B3 2.0% $ 78,496 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 162
Segment B4 1.0% $ 39,248 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 81
Segment C1 1.0% $ 39,248 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 81
Segment C2 1.0% $ 39,248 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 81
Segment C3 1.0% $ 39,248 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 81
Segment C4 1.0% $ 39,248 10.3% 1.5% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% $ 81
All Other (Not Impacted) 78.0% $ 3,061,348 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% $ -
Total 100% $ 3,924,805 2.3% $ 1,784
Summary
The table and graph below summarize the annual revenue gain and margin on the revenue gain (the benefit).
Copyright, 2006-2008, Hall Consulting & Research LLC, All Rights Reserved. www.hallcr.com
374293471.xls Revenue 22 of 30
Key Performance Indicator (KPI) Assessment (Optional)
Not all benefits can credibly be translated into financial ($) benefit terms. These are sometimes referred to as intangible benefits. This worksheet provides a structure (one of many)
to estimate how the initiative may impact non-financial KPIs.
The percentiles shown are how the organization's KPI performance compares to others in the industry. 0% represents worst performance in the industry (laggard); 50% is average
performance; 100% is best in the industry (world class performance). For example, being at the 20th percentile implies that 80% of the other organizations in the industry perform
better. The "Improvement" indicates how much the organization is expected to improve KPI performance due to the solution. The model assumes a linear relationship between KPI
performance and industry percentile -- a simplifying assumption.
Select "Business Objectives" and KPIs that are important to your business and are expected to be significantly impacted by the solution. Estimate "Laggard" and "World Class" KPI
values in your industry. Next determine what percentile your organization is currently performing at (the as-is KPI value is calculated). Next determine to what percentile you expect
the initiative will take you to. The to-be KPI value (and % improvement) are calculated.
374293471.xls KPIs 23 of 30
Key Performance Indicator (KPI) Assessment (Optional)
Summary
The category as-is, to-be, and improvement average percentiles are summarized below. Note: the improvement (Imp.) is not the KPI value % improvement, it shows the percentile
point improvement.
Percentile
As-Is To-Be Imp.
Sales/Marketing Performance 33% 33% 0%
Business Management Effectiveness 33% 33% 0%
Supply/Operations Performance 33% 33% 0%
Technology Effectiveness 41% 69% 27%
Average 35% 42% 7%
Performance Percentile
As-Is
KPI Performance Comparison
World Class To-Be
100%
90%
80% 69%
70%
60%
50% 33% 33% 33% 33%
41%
40% 33% 33%
30%
20%
10%
0%
Sales/Marketing Performance
Business Management Supply/Operations
Effectiveness Performance
Technology Effectiveness
Laggard
Copyright, 2006-2008, Hall Consulting & Research LLC, All Rights Reserved. www.hallcr.com
374293471.xls KPIs 24 of 30
Financial Analysis
This model simulates the costs and benefits of the initiative. The tables and charts below summarize the tool results.
Summary of Results
The tables and graphs summarize the costs and benefits and calculates ROI, NPV, IRR, and payback period. The results are shown average per PC
C o st s & B e n efi t s ($ / P C )
and the total for the organization.
Organization Total
Per PC ($000)
Costs (3-Yr) $ 1,743 $ 8,716
Benefits (3-Yr) $ 5,339 $ 26,697 Total Costs Vs Benefits
Net Benefits $ 3,596 $ 17,982 $6,000
NPV (Net Present Value) $ 2,782 $ 13,908 $5,000
ROI (Return on Investment) - [Total Net
206% $4,000
Benefits / Total Costs]
$3,000
IRR (Internal Rate of Return) 124% $5,339
Payback Period 9 Months $2,000
Number of PCs 5000 $1,000 $1,743
$-
Costs (3-Yr) Benefits (3-Yr)
Cost Summary
Below are the initial design/development/deployment and added annual on-going costs required to fully deploy, adopt and support the initiative.
Additional details can be found below and on the "Cost" worksheet.
374293471.xls ROI 25 of 30
Financial Analysis
Benefits Summary
Below are the benefits enabled by the initiative. The detailed calculations are below and on the green benefit tabs.
Benefit Sub-Categories
IT Labor/Services TCO Savings $ - $ 751 $ 2,253 $ - $ 3,755 $ 11,264
Other Direct Cost Savings
IT Savings $ 75 $ 94 $ 356 $ 376 $ 468 $ 1,781
Business Savings $ - $ 15 $ 44 $ - $ 73 $ 220
Total $ 75 $ 108 $ 400 $ 376 $ 542 $ 2,001
User Productivity Benefits
Individual Computing $ - $ 274 $ 823 $ - $ 1,372 $ 4,115
Collaborative Computing $ - $ - $ - $ - $ - $ -
PC Systems Management $ - $ 265 $ 794 $ - $ 1,323 $ 3,968
Total $ - $ 539 $ 1,616 $ - $ 2,694 $ 8,082
Revenue Growth $ - $ 357 $ 1,070 $ - $ 1,784 $ 5,351
Total $ 75 $ 1,755 $ 5,339 $ 376 $ 8,774 $ 26,697
Cash Flow
Shown below are the costs and benefits by year, the net benefits (benefits-costs), and the cumulative cash flow. This is used to calculate payback
period, IRR, and NPV.
$3,000
$2,000
$1,000
$-
$(1,000)
$(2,000)
0 1 2 Year 3 4 5
374293471.xls ROI 26 of 30
Financial Analysis
Cost Details
The table/chart below provide additional cost details.
Costs ($ per PC) Costs ($000)
Annual On- 3-Year Annual On-
Cost / Benefit Category One-Time Going Total One-Time Going 3-Year Total
Hardware
Client Hardware $ 600 $ 90 $ 870 $ 3,000 $ 450 $ 4,350
Server Hardware $ 6 $ 1 $ 9 $ 30 $ 5 $ 44
Total $ 606 $ 91 $ 879 $ 3,030 $ 455 $ 4,394
Software
Client Software $ 143 $ 33 $ 242 $ 715 $ 164 $ 1,208
Server Software $ 7 $ 2 $ 11 $ 33 $ 8 $ 56
Total $ 150 $ 34 $ 253 $ 748 $ 172 $ 1,265
IT Labor, Services, & Training
One-time Implementation Labor/Services $ 151 $ - $ 151 $ 753 $ - $ 753
Annual On-Going Labor/Services $ - $ 18 $ 55 $ - $ 91 $ 273
Incremental Help Desk Calls $ 11 $ - $ 11 $ 54 $ - $ 54
IT Training $ 52 $ - $ 52 $ 261 $ - $ 261
Total $ 213 $ 18 $ 268 $ 1,067 $ 91 $ 1,340
End-User Labor & Training
End-User Labor $ 60 $ 24 $ 130 $ 299 $ 118 $ 652
End-User Training $ 213 $ - $ 213 $ 1,066 $ - $ 1,066
Total $ 273 $ 24 $ 343 $ 1,364 $ 118 $ 1,717
(Per PC)
$2,000
End-User Training
$1,800
End-User Labor
$1,600 $213
IT Training
$130
$1,400 $52
$11
$55 Incremental Help Desk
$151 Calls
$1,200
$11 Annual On-Going
$1,000 $242 Labor/Services
$9
$800 One-time Implementation
Labor/Services
$600
Server Software
$400 $870
Client Software
$200 Server Hardware
$- Client Hardware
3-Year Total
374293471.xls ROI 27 of 30
Financial Analysis
Benefit Details
The tables/charts below provide additional details regarding each of the four quantified benefit types.
IT Labor Comparison
TCO p er PC p er Year
$4,000
Total Other Direct Cost Savings $ 75 $ 108 $ 400 $ 376 $ 542 $ 2,001
374293471.xls ROI 28 of 30
Financial Analysis
$400 $-
Other Business Expenses
$44
$350 $2
Business Services
$-
3-Year Total
Collaborative
1.0 $300 Computing
PC Systems Management $-
0.8
$200
Individual
19.4 $274 Computing
Non-Computing-Related Activities $100
19.4
$-
374293471.xls ROI 29 of 30
Financial Analysis
Revenue Growth
Benefits ($ per PC) Benefits ($000)
Annual On- 3-Year Annual On-
One-Time Going Total One-Time Going 3-Year Total
Improved Sales Effectiveness $ 268 $ 803 $ - $ 1,338 $ 4,013
Improved Marketing Effectiveness $ - $ - $ - $ - $ -
Improved Customer Service $ 89 $ 268 $ - $ 446 $ 1,338
New/Expanded Channels/Geographies $ - $ - $ - $ - $ -
New/Enhanced Products/Services $ - $ - $ - $ - $ -
Improved Product Availability (fill rate, up-
$ - $ - $ - $ - $ -
time)
Other $ - $ - $ - $ - $ -
Total $ - $ 357 $ 1,070 $ - $ 1,784 $ 5,351
Annual Benefit per PC
$350 $- Other
Percentile
Improve-
As-Is To-Be ment
Sales/Marketing Performance 32.5% 32.5% 0.0%
Business Management Effectiveness 32.9% 32.9% 0.0%
Supply/Operations Performance 33.3% 33.3% 0.0%
Technology Effectiveness 41.4% 68.6% 27.1%
Average 35.0% 41.8% 6.8%
Perform ance Percentile
As-Is
World Class KPI Performance Comparison To-Be
100%
90%
80% 69%
70%
60%
50% 33% 33% 33% 33%
41%
40% 33% 33%
30%
20%
10%
0%
Sales/Marketing Performance
Business Management Effectiveness
Supply/Operations Performance
Technology Effectiveness
Laggard
Copyright, 2006-2008, Hall Consulting & Research LLC, All Rights Reserved. www.hallcr.com
374293471.xls ROI 30 of 30