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.


What is TEI?


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


Analysis

› Composite Organization – companies surveyed and interviewed

› Benefits – looked at those incremental to previous solutions

› Costs

› Flexibility

› Risk


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.


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.


5 Companies Interviewed For The Composite Organization

Global Transportation Translation

Special Needs SchoolOil & Gas

Architecture


Defined Composite Organization As A Mining Company

› HQ in Singapore

› Ops in Asia, USA & Europe

› 5,000 total users

› Project goals

• Collaboration

• TCO

• Complexity


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


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



2. Reduced telephony• Long distance

• Conference calling

• International roaming



› $1.7 Million



3. Staffing Optimization• PBX/communication system administrators

• IT (general) support desk

• Drilling specialists



› $3.9 Million


Total Three-Year Risk Adjusted Incremental Benefits

Total benefits: $6,862,500


There Was Also A General Increase In User Productivity

What specific areas have seen an increase in team efficiency?


Total Three-Year Risk Adjusted Costs

Total costs: $3,577,400


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%


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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ATTENDEE PARTYWednesday, February 19th

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3:00pm – 9:00pm10:30am – 9:00pm7:30am – 9:00pm8:00am –1:30pm

LOCATIONPinyon 3

Monday, February 17Tuesday, February 18Wednesday, February 19 Thursday, February 20

LRS

LOCATIONCopperleaf 12

Wednesday, February 198:30am – 9:45am10:15am – 11:30am1:00pm – 2:15pm2:45pm – 4:00pm4:30pm – 5:45pm

Thursday, February 209:00am – 10:15am10:45am – 12:15pm12:45pm – 2:00pm

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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


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


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

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