How Office 365 can lower operating costs and increase ROI.

A survey conducted by Gartner reports, “IT Infrastructure & Operations (I&O) represents approximately 60 percent of total IT spending worldwide, so with IT budgets remaining tight, it’s no wonder that I&O cost-cutting pressure continues to be intense” 

Client’s Biggest Challenges

• Ensure IT competitiveness in the industry 
• Identify opportunities to improve performance 
• Create a foundation for a continual change/improvement 
• Find Opportunities to increase Return on Investment (ROI) 
• Support rapidly changing business needs while managing costs and performance 
• Establish the foundation for a continuous improvement 

Microsoft commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Office 365. The purpose of this study was to provide readers at large organizations (more than 1,000 users) with a framework to evaluate the potential financial impact of Office 365 on their organizations.

To better understand the benefits, costs, and risks associated with an Office 365 implementation, Forrester interviewed three existing customers with multiple years of experience using Office 365 and conducted an online survey with 60 large organizations also using Office 365. Office 365 is the software-as-a-service (SaaS) version of Microsoft business products including Office Professional Plus, Exchange, Lync, SharePoint, Yammer, and OneDrive.

Office 365 Benefits

1. Technology :

Forrester’s survey reported that organization had benefited significantly in terms of IT costs. Here is some of the findings :

The total savings to purchase, maintain, and host the hardware amounted to $672,791. 

Server licenses for various Microsoft solutions were no longer needed. An on-premises solution comparable to Office 365 would have required 163 Windows Server licenses, 12 Exchange Server licenses, two Lync Server licenses, and seven SharePoint licenses. The avoided purchase cost plus annual maintenance totaled $60,060. 

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The implementation effort was 40% less than a comparable on-premises solution. The Office 365 implementation consisted of three phases (see the Costs section for more detail). Had a traditional on-premises deployment of Microsoft 2013 solutions been implemented, the internal effort and professional services fees would have been 40% greater. This savings across all phases equaled $272,000.

The manpower required to support the solution is reduced by more than half. The total number of resources required to maintain and grow the Microsoft solutions — Office Professional Plus, Exchange, Lync, SharePoint, Yammer, and OneDrive — was reduced by Year 3 of the study from nine down to four full-time employees (FTEs). Much of this is in the form of avoiding additional hires as well as redeploying two existing system administrators who could focus on other, higher-value activities. The three-year associated savings was $1.42 million.

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2. Mobility:

Three hundred highly mobile “road warrior” employees save 1 hour per day by Year 3. Out of the knowledge workers using Office 365, 300 salespeople and engineering consultants are on the road the vast majority of their time. They save a lot of time from not having to use VPNs to access systems and having better collaboration tools and access to information. This increased productivity grows from a quarter hour per day in Year 1 up to 1 hour per day in Year 3 as more Office 365 solutions are rolled out, e.g., Lync and SharePoint, and as the users become more comfortable using them. The total productivity savings, discounted 50% since not all productivity gains result in more work accomplished, was $2.81 million.

3. Control & Compliance :

Using Office 365 eliminated the need to undertake four projects that would have otherwise been required. Office 365 had all of the required features and security that eliminated the need for additional projects to deploy encrypted email, data leakage, eDiscovery, and rights management capabilities. In total, 9.5 man-months were saved with a corresponding cost avoidance of $90,250. 

4. Business Intelligence:

Six hundred users make faster, better decisions because of more timely access to information. A subset of users — analysts, managers, and salespeople — see a reduction in time required to hunt for information or waiting for information in order to make the best decisions possible. The benefit begins to be realized in Year 2 of the study, and the daily savings is 30 minutes per day by Year 3. The productivity opportunity, discounted 50% since not all productivity gains result in more work accomplished, totaled $3.25 million. 

5. Enterprise Social

Third-party social/collaboration tools are eliminated since they come standard within Office 365. In addition to the productivity gains that social and collaboration tools deliver, there are hard cost savings by discontinuing the use of other tools and by moving communications from traditional telephones to Internet based solutions. Combined, the composite organization saved $247,000 over three years. 

Kiefer Consulting is a Microsoft partner with experience in helping clients maximize their investment in Office 365. If you need help with deployment or implementation of Office 365, don’t hesitate to contact us.

Sources:
http://www.slideshare.net/whymsft/roi-of-office-365-forrestroioffice365forrestertotaleconomicimpact
http://www.gartner.com/technology/consulting/benchmarking/it-business-effectiveness.jsp 
http://www.gartner.com/imagesrv/consulting/pdf/BenchmarkAnalyticsScorecardITBudgetNATransportCaseStudyMar2011R.pdf 
http://www.gartner.com/technology/consulting/benchmarking/benchmarking-case-studies.jsp 
http://www.gartner.com/newsroom/id/1807615

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