A Forrester Total Economic Impact™ Study Commissioned By Camunda, February 2024
Strategic, scaled investments in process automation with Camunda can: 1) improve customer experiences, 2) increase employee productivity, 3) enhance business agility, and 4) reduce business risks. Leaders who center process orchestration within their businesses do more than increase efficiencies, they transform their organizations.
Camunda is a digital process automation (DPA) platform that helps organizations automate processes end to end. Its software coordinates automation endpoints which can be humans, robotic process automation (RPA) bots, or application programming interfaces (APIs) to internal and external systems. Camunda uses open standards such as Business Process Model and Notation (BPMN) and Decision Model and Notation (DMN), and Camunda’s visual modeling and low-code solutions enable stakeholders other than professional developers (e.g., nonprofessional or citizen developers) to participate in process development and maintenance.
Camunda commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Camunda strategically and at scale.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Camunda on their organizations.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed five representatives of four organizations with experience using Camunda. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that generates $25 billion in revenue and has 55 million customers and 60,000 employees.
generates $0 in revenue and has 0 customers and 0 employees. Custom results are based on these inputs and the TEI case study.
Before using Camunda, the interviewees’ organizations had limited solutions for process automation, and those solutions often used proprietary standards rather than open standards. The interviewees found that their organizations’ prior solutions could not support the scale and complexity of the processes they wanted to orchestrate, and they said that process development using the prior solutions was too slow to meet business needs.
The interviewees’ organizations invested in Camunda strategically: Instead of simply automating processes one by one, they created teams responsible for enabling decentralized process development and fostered cultures that empowered employees to leverage Camunda for all kinds of process orchestration.
Strategic investment in Camunda yielded several benefits. First, by automating processes their customers interact with regularly, the interviewees’ organizations provided better, faster customer service and improved their customers’ experiences. Second, by automating back-office processes across multiple departments and business units, the organizations increased their overall operational efficiency. Third, the organizations developed and changed processes faster with Camunda, thereby reducing development timelines and increasing business agility. And, finally, widespread process automation reduced the risk of errors and improved regulatory compliance for organizations with complex, global operations.
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
For , increased customer satisfaction might yield in profits. An increase in customer retention might translate into happier customers.
For , improvements in operations efficiency might be worth , and the total time savings over three years might equate to 0 FTEs.
For , process development efficiencies might be worth , and in total, might save 0 hours of development.
For , improvements in process quality might save .
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
For , Camunda licensing costs might be over three years.
For , process development costs might be over three years. By Year 3, might have 0 orchestrated processes, and process development efforts might involve 0 FTEs.
For , training costs for new Camunda users might be over three years.
For , platform administration costs might be over three years.
For , employee and end-user retraining costs might be over three years.
The representative interviews and financial analysis found that a composite organization experiences benefits of $139.5 million over three years versus costs of $27.5 million, adding up to a net present value (NPV) of $112.1 million and an ROI of 408%.
might experience benefits of over three years versus costs of , adding up to an NPV of and an ROI of 0%.
Return on investment (ROI)
Benefits PV
Net present value (NPV)
Payback
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment Camunda.
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 Camunda can have on an organization.
Interviewed Camunda stakeholders and Forrester analysts to gather data relative to Camunda.
Interviewed five representatives at four organizations using Camunda to obtain data about costs, benefits, and risks.
Designed a composite organization based on characteristics of the interviewees’ organizations.
Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Readers should be aware of the following:
This study is commissioned by Camunda 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 study to determine the appropriateness of an investment in Camunda.
Camunda 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 Forrester’s findings or obscure the meaning of the study.
Camunda provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Jeffrey Yozwiak
Zahra Azzaoui
Role | Industry | Region | Revenue | Employees |
---|---|---|---|---|
Senior manager | Finance | Global | $36B | 90,000 |
IT manager | Real estate | EMEA | $7B | 2,000 |
Enterprise architect | Technology | Global | $4B | 10,000 |
Head of IT standards |
Insurance | EMEA | $7B | 12,000 |
Role | Industry | Time Implemented | Use Examples |
---|---|---|---|
Senior manager | Finance | 5 years | Payment processing (e.g., compliance and approval), Document processing (e.g., for loan applications) |
IT manager | Real estate | 2 years | Customer service (e.g., managing documents, customer records, and customer communications), Operations management (e.g., managing processes for service provision) |
Enterprise architect | Technology | 3 years | Finance (e.g., customer billing, compliance and auditing, etc.), Customer service (e.g., chatbot) |
Head of IT standards |
Insurance | 10 years | Operations management (e.g., processes for service provision), Document input processing and document generation, Fraud detection, Customer service (e.g., customer signup and account management) |
Before investing in Camunda, the interviewees’ organizations had limited experience with process orchestration. The interviewees described “pockets” of automation: Some individual processes were partially automated, but processes were not orchestrated end-to-end, and the processes had been automated in ways that would not scale. The IT manager at a real estate organization and interviewees from an insurance organization said this was especially the case for their companies. They explained that before using Camunda, their organizations had no centralized solutions for process orchestration. While the senior manager at a finance organization and the enterprise architect at a technology organization said their companies did have legacy tools for process automation, they reported that process development with the legacy tools was so slow that their organizations decided to seek out alternatives.
The interviewees noted how their organizations struggled with common challenges, including:
Process development using tools with proprietary standards was too slow to meet business needs. The senior manager in the finance industry said their organization’s prior process automation platform — which used proprietary standards — had created a bottleneck because a limited number of resources had the requisite skills to use it. Similarly, the enterprise architect in the technology industry reported their organization’s legacy process automation solution made changing existing processes cumbersome. It could take up to six months to change logic, which they said is an unacceptable delay for a fast-growing company.
An IT manager in the real estate industry pointed out an additional problem: Proprietary standards impeded communication between business stakeholders and IT, and the poor collaboration delayed deliveries and led to subpar solutions.
The interviewees’ organizations searched for a solution that could:
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the five interviewees, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The composite organization is a global, $25 billion-dollar organization with 60,000 employees and 55 million customers. The organization operates in an industry with strict regulatory requirements that vary across the multiple regions in which it operates.
To model the composite organization, Forrester assumes:
has 0 total business processes defined.
At , 0 business processes might be external.
At , 0 business processes might be internal.
For , the average number of instances per process per year might be 0.
is assumed to have an operating margin of 0%.
Deployment characteristics. Initially, the composite organization has low levels of process orchestration maturity and Camunda usage. It uses Camunda, but it does so only for scattered projects siloed across the organization.
Starting in Year 1, the composite organization strategically invests in process orchestration with Camunda. A central team in IT supports wider adoption of Camunda throughout the organization (e.g., by creating templates and documentation, organizing internal meetups, and otherwise enabling disparate groups interested in process orchestration). Because of the composite organization’s efforts, the number of business processes orchestrated with Camunda increases by 75% per year — from 25 processes or 5% of processes initially to 140 processes or 28% of processes in Year 3.
At , 0% of processes might be orchestrated with Camunda in Year 1, 0% orchestrated in Year 2, and 0% orchestrated in Year 3.
The composite organization also improves its processes over time. This is reflected by how much an orchestrated process is automated. Forrester assumes that initially, most of the processes the composite orchestrates with Camunda are only 60% automated, which means 40% of the steps are still performed manually. Thanks to the composite organization’s efforts, the percentage of automation increases by 10% each year. By Year 3, processes orchestrated with Camunda are 80% automated. Because these processes are so complex, it is impossible to automate them completely. However, increasing the level of automation can still save time and reduce errors.
The table below further details Forrester’s assumptions for the composite organization.
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|---|
R1 | Revenue before using Camunda | CompositeComposite | $25,000,000,000$25,000,000,000 | $25,000,000,000$25,000,000,000 | $25,000,000,000$25,000,000,000 | $25,000,000,000$25,000,000,000 |
R2 | Operating margin | CompositeComposite | 12%12% | 12%12% | 12%12% | 12%12% |
R3 | Customers | CompositeComposite | 55,000,00055,000,000 | 55,000,00055,000,000 | 55,000,00055,000,000 | 55,000,00055,000,000 |
R4 | Average revenue per customer | R1/R3 | $455$455 | $455$455 | $455$455 | $455$455 |
R5 | Employees | CompositeComposite | 60,00060,000 | 60,00060,000 | 60,00060,000 | 60,00060,000 |
R6 | Average employee salary (fully burdened) | Composite | $96,000$96,000 | $96,000$96,000 | $96,000$96,000 | $96,000$96,000 |
R7 | Average employee hourly wage (fully burdened) | R6/2,080 | $46$46 | $46$46 | $46$46 | $46$46 |
R8 | Business processes | CompositeComposite | 500500 | 500500 | 500500 | 500500 |
R9 | Average instances per process | CompositeComposite | 328,000328,000 | 328,000328,000 | 328,000328,000 | 328,000328,000 |
R10 | Percentage of orchestrated processes that are automated | Composite; R10PY*(100%+R11) | 60%60% | 60%60% | 60%60% | 60%60% |
R11 | Increase in percentage of orchestrated processes that are automated | Composite | 0%0% | 0%0% | 0%0% | 0%0% |
R12 | Percentage of processes that are external/customer-facing | CompositeComposite | 40%40% | 40%40% | 40%40% | 40%40% |
R13 | External business processes | R8*R12 | 200200 | 200200 | 200200 | 200200 |
R14 | Internal business processes | R8*(100%-R12) | 300300 | 300300 | 300300 | 300300 |
R15 | Percentage of processes orchestrated with Camunda | CompositeComposite | 5%5% | 9%9% | 16%16% | 28%28% |
R16 | External processes orchestrated with Camunda | R8*R12*R15 | 1010 | 1818 | 3232 | 5656 |
R17 | External processes not orchestrated with Camunda | R13-R16 | 190190 | 182182 | 168168 | 144144 |
R18 | Internal processes orchestrated with Camunda | R8*(100%-R12)*R15 | 1515 | 2727 | 4848 | 8484 |
R29 | Internal processes not orchestrated with Camunda | R14-R18 | 285285 | 273273 | 252252 | 216216 |
Ref. | Benefit | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|---|
Atr | Customer satisfaction | $0$0 | $7,872,077$7,872,077 | $18,892,858$18,892,858 | $46,602,317$46,602,317 | $73,367,251$73,367,251 | $57,783,376$57,783,376 |
Btr | Operations efficiencies | $0$0 | $7,966,464$7,966,464 | $24,116,659$24,116,659 | $52,506,240$52,506,240 | $84,589,363$84,589,363 | $66,622,079$66,622,079 |
Ctr | Development efficiencies | $0$0 | $61,051 $61,051 | $200,796 $200,796 | $523,306 $523,306 | $785,152 $785,152 | $614,615 $614,615 |
Dtr | Process quality | $0$0 | $1,773,698$1,773,698 | $5,132,138$5,132,138 | $11,526,255$11,526,255 | $18,432,090$18,432,090 | $14,513,734$14,513,734 |
Total benefits (risk-adjusted) | $0$0 | $17,673,289$17,673,289 | $48,342,450$48,342,450 | $111,158,117$111,158,117 | $177,173,857$177,173,857 | $139,533,804$139,533,804 |
Evidence and data. Interviewees said that by using Camunda to orchestrate and automate external processes (i.e., processes that directly serve customers) their organizations improved their customers’ experiences. Completing common tasks including everything from customer support (e.g., account changes) to business services (e.g., loan application or claims processing) became faster and higher quality. Ultimately, improving services impacted the organizations’ top-line revenues.
The head of IT standards explained: “If you have the happy path, and [the process] runs through, then the [reduction in time to complete] is very high — from days to hours or even minutes if everything is fine. It’s pretty impressive.”
The head of IT standards concluded: “We have a more customer-centric perspective on processes. ‘Where does [the process] start and end? How long is the time between? How convenient is [the process for] the customer? … What kind of feedback does the customer want? … When do we send them an email with information?’ … We save a lot of work and time with Camunda, but we also keep in mind what is necessary for the customer.”
The IT manager at the real estate organization said their company deployed Camunda to orchestrate all processes related to tenant experience — from pricing (e.g., determining rents) and customer support (e.g., maintenance requests) to customer onboarding (e.g., generating rental agreements).
After orchestrating such processes with Camunda, the interviewees said their organization reduced vacancies by 30% and discovered that the prices of 30% of its properties needed to be increased. Automation enabled the organization to serve an increasing number of customers as the business grew.
The IT manager described how using Camunda to support services improved customer experience: “The people who take advantage of what we have to offer in the digital space tend to be very satisfied. They get help faster. … Services like this [orchestrated with Camunda] not only increase customer satisfaction, but they are also unique to our industry and our business.”
The same interviewee also explained how orchestrating processes with Camunda enabled scale: “We were growing quickly and trying to cope with volume. When we launched the process [for pricing], we identified a lot of apartments that should have had a rent increase before but hadn’t had one. Whether or not that was an oversight is hard to say, but when you put things into a system and a process, that’s when you capture all the opportunities. … Doing it this way [with Camunda] enables us to do it at scale. Whereas, before, when the process was manual, we lost out on opportunities because we just couldn’t cope with the volume.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
might have 0 external business processes, and each process might average 0 instances per year.
At , on average, there are 0 external process instances per customer.
At , non-orchestrated processes might have a customer retention rate of 0%.
The composite organization’s orchestrated processes initially have an 84% customer retention rate, and its customer retention rate for orchestrated processes increases to 86% in Year 3 as the organization increasingly automates and improves its processes.
At , orchestrated processes initially might have a customer retention rate of 0%. The customer retention rate for orchestrated processes might increase to 0% in Year 3 as increasingly automates and improves its processes.
For , the aggregate customer retention rate might increase from 0% initially to 0% in Year 3. As orchestrates more processes with Camunda, it might retain more customers.
For , the average revenue per year per customer retained might be $0. For as a whole, the average revenue per customer per year might be $0. However, the incremental customers retained through orchestration and automation might be slightly higher value.
Risks. There are multiple ways in which this benefit will vary from organization to organization. Overall, the model is moderately sensitive to changes to any of the assumptions about the composite organization (e.g., number of processes, percentage of processes orchestrated with Camunda, average instances per process, operating margin, etc.)
In addition, this particular benefit is sensitive to changes to any of the following variables:
Small changes to these variables can have large impacts on the results.
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $57.8 million.
For , this benefit might have a three-year, risk-adjusted PV of .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
A1 | External business processes | R13 | 200200 | 200200 | 200200 | 200200 | |
A2 | Average instances per process | R9 | 328,000328,000 | 328,000328,000 | 328,000328,000 | 328,000328,000 | |
A3 | Percentage of processes orchestrated with Camunda | R15 | 5%5% | 9%9% | 16%16% | 28%28% | |
A4 | Average instances per external process per customer | CompositeComposite | 1.21.2 | 1.21.2 | 1.21.2 | 1.21.2 | |
A5 | Customers served by non-orchestrated processes | A1*A2*(100%-A3)/A4 | 51,933,33351,933,333 | 49,746,66749,746,667 | 45,920,00045,920,000 | 39,360,00039,360,000 | |
A6 | Customers served by orchestrated processes | A1*A2*A3/A4 | 2,733,3332,733,333 | 4,920,0004,920,000 | 8,746,6678,746,667 | 15,306,66715,306,667 | |
A7 | Average retention rate for non-orchestrated processes | CompositeComposite | 80%80% | 80%80% | 80%80% | 80%80% | |
A8 | For an orchestrated process: Percentage of process that is automated | R10 | 60%60% | 66%66% | 73%73% | 80%80% | |
A9 | Percentage of lost customers who can be retained by customer experiences improved with orchestration and automation | A9Y0/A8Y0*A8 | 5%5% | 6%6% | 6%6% | 7%7% | |
A10 | Average retention rate for orchestrated processes | A7*(100%+A9) | 84%84% | 85%85% | 85%85% | 86%86% | |
A11 | Customers retained from non-orchestrated processes | A5*A7 | 41,546,66641,546,666 | 39,797,33439,797,334 | 36,736,00036,736,000 | 31,488,00031,488,000 | |
A12 | Customers retained from orchestrated processes | A6*A10 | 2,296,0002,296,000 | 4,182,0004,182,000 | 7,434,6677,434,667 | 13,163,73413,163,734 | |
A13 | Aggregate customers retained | A11+A12 | 43,842,66643,842,666 | 43,979,33443,979,334 | 44,170,66744,170,667 | 44,651,73444,651,734 | |
A14 | Aggregate customer retention rate | A13/(A5+A6) | 80%80% | 80%80% | 81%81% | 82%82% | |
A15 | Incremental customers retained due to orchestration and automation with Camunda | A13-A13Y0 | 00 | 136,668136,668 | 328,001328,001 | 809,068809,068 | |
A16 | Average revenue per customer retained | CompositeComposite | $600$600 | $600$600 | $600$600 | $600$600 | |
A17 | Operating margin | R2 | 12%12% | 12%12% | 12%12% | 12%12% | |
At | Customer satisfaction | A15*A16*A17 | $0$0 | $9,840,096$9,840,096 | $23,616,072$23,616,072 | $58,252,896$58,252,896 | |
Risk adjustment | ↓20% | ||||||
Atr | Customer satisfaction (risk-adjusted) | $0$0 | $7,872,077$7,872,077 | $18,892,858$18,892,858 | $46,602,317$46,602,317 | ||
Three-year total: $73,367,251$73,367,251 | Three-year present value: $57,783,376$57,783,376 |
Evidence and data. By using Camunda to orchestrate and automate internal processes, the interviewees’ organizations made their operations drastically more efficient, and they also used it to orchestrate their most complex processes. Interviewees said automation not only saved employees countless hours of manual work, but it also supported business growth. For example, the interviewees from the real estate and the insurance organizations said process volumes grew even as staffing levels remained constant and process orchestration made employees more productive.
The IT manager in the real estate industry explained: “In regulated markets, being able to know and work within the regulations of the local country is extremely important. … Especially when you have so many different edge cases and so many different things that can happen in a process, being able to orchestrate that at scale is insanely impactful.”
For example, the interviewee said their organization used to have 80 employees who just oversaw rent increases. By orchestrating and automating the process, the organization kept up with increased volume with only a quarter of the employees required before. Automating the process freed employees to perform higher-value tasks like providing better customer service.
The IT manager described another example of time savings: “The [rental] termination process is a pretty complicated process. … It used to take us almost two months to facilitate a termination. Now, we’re down to maybe a month.”
The IT manager added that their organization had cobbled together a varied IT landscape as it acquired subsidiaries, and they said one strength of Camunda was that it integrated with all these legacy IT systems and orchestrated complex processes that spanned multiple systems.
The interviewee concluded: “In terms of our future state, we plan to continue expanding our Camunda use and roll it out [globally]. We plan to expand to up to 100 million [process instances].”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
might have 0 internal business processes, and each process might average 0 instances per year.
For , the average time to manually complete non-orchestrated process instances might be 0 hours.
The average time to complete orchestrated process instances is proportional to the level of automation.
For , the average time to complete orchestrated process instances might be 0 hours initially. This might fall to 0 hours in Year 3 as increasingly automates its orchestrated processes.
For , the employee time saved might be 0 hours in Year 1, 0 hours in Year 2, and 0 hours in Year 3.
Risks. Overall, the model is moderately sensitive to changes to any of the assumptions about the composite organization (e.g., number of processes, percentage of processes orchestrated with Camunda, average instances per process, average employee fully burdened annual salary, etc.).
In addition, this particular benefit is sensitive to changes to the following variables:
Small changes to these variables can have large impacts on the results.
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $66.6 million.
For , this benefit might have a three-year, risk-adjusted PV of .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
B1 | Internal business processes | R14 | 300300 | 300300 | 300300 | 300300 | |
B2 | Average instances per process | R9 | 328,000328,000 | 328,000328,000 | 328,000328,000 | 328,000328,000 | |
B3 | Aggregate internal process instances | B1*B2 | 98,400,00098,400,000 | 98,400,00098,400,000 | 98,400,00098,400,000 | 98,400,00098,400,000 | |
B4 | Percentage of processes orchestrated with Camunda | R15 | 5%5% | 9%9% | 16%16% | 28%28% | |
B5 | Non-orchestrated internal process instances | B1*(100%-B4)*B2 | 93,480,00093,480,000 | 89,544,00089,544,000 | 82,656,00082,656,000 | 70,848,00070,848,000 | |
B6 | Orchestrated internal process instances | B1*B4*B2 | 4,920,0004,920,000 | 8,856,0008,856,000 | 15,744,00015,744,000 | 27,552,00027,552,000 | |
B7 | Average time per non-orchestrated process instance (hours) | CompositeComposite | 0.400.40 | 0.400.40 | 0.400.40 | 0.400.40 | |
B8 | Percentage of orchestrated process that is automated | R10 | 60%60% | 66%66% | 73%73% | 80%80% | |
B9 | Average time per orchestrated process instance (hours) | B7*(100%-B8*95%) | 0.170.17 | 0.150.15 | 0.120.12 | 0.100.10 | |
B10 | Employee time to perform non-orchestrated internal processes (hours) | B5*B7 | 37,392,00037,392,000 | 35,817,60035,817,600 | 33,062,40033,062,400 | 28,339,20028,339,200 | |
B11 | Employee time to perform orchestrated internal processes (hours) | B6*B9 | 836,400836,400 | 1,328,4001,328,400 | 1,889,2801,889,280 | 2,755,2002,755,200 | |
B12 | Total employee time to perform internal processes | B10+B11 | 38,228,40038,228,400 | 37,146,00037,146,000 | 34,951,68034,951,680 | 31,094,40031,094,400 | |
B13 | Employee time saved on internal processes due to orchestration and automation with Camunda (hours) | B12Y0-B12 | 00 | 1,082,4001,082,400 | 3,276,7203,276,720 | 7,134,0007,134,000 | |
B14 | Average employee hourly wage (fully burdened) | R7 | $46$46 | $46$46 | $46$46 | $46$46 | |
B15 | Productivity recapture | TEI standard | 20%20% | 20%20% | 20%20% | 20%20% | |
Bt | Operations efficiencies | B13*B14*B15 | $0$0 | $9,958,080$9,958,080 | $30,145,824$30,145,824 | $65,632,800$65,632,800 | |
Risk adjustment | ↓20% | ||||||
Btr | Operations efficiencies (risk-adjusted) | $0$0 | $7,966,464$7,966,464 | $24,116,659$24,116,659 | $52,506,240$52,506,240 | ||
Three-year total: $84,589,363$84,589,363 | Three-year present value: $66,622,079$66,622,079 |
Evidence and data. Interviewees reported that their organizations developed new processes and changed existing processes up to twice as quickly with Camunda compared to their previous solutions, due to the following reasons:
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
At , processes might change 0 time(s) per year.
At , changing a process not orchestrated with Camunda might take 0 hours of development time.
For , changing a process orchestrated with Camunda might take 0% less time initially and up to 0% less time by Year 3. Process development times might decrease as increases its investment in Camunda.
might avoid 0 hours of development time in Year 1, 0 hours in Year 2, and 0 hours in Year 3.
Risks. Overall, the model is moderately sensitive to changes to any of the assumptions about the composite organization (e.g., number of processes, percentage of processes orchestrated with Camunda, etc.).
In addition, this particular benefit is somewhat sensitive to changes to the following variables:
Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $615,000.
For , this benefit might have a three-year, risk-adjusted PV of .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
C1 | Non-orchestrated processes | R8-(R17+R19) | 475475 | 455455 | 420420 | 360360 | |
C2 | Orchestrated processes | R17+R19 | 2525 | 4545 | 8080 | 140140 | |
C3 | Average changes per process | CompositeComposite | 11 | 11 | 11 | 11 | |
C4 | Average development timeline per non-orchestrated process change (weeks) | InterviewsInterviews | 88 | 88 | 88 | 88 | |
C5 | Average development time per non-orchestrated process change (hours) | C4*40*75% | 240240 | 240240 | 240240 | 240240 | |
C6 | Percent reduction in development time per orchestrated process change | InterviewsInterviews | 13%13% | 20%20% | 30%30% | 45%45% | |
C7 | Average development time per orchestrated process change (hours) | C5*(100%-C6) | 209209 | 192192 | 168168 | 132132 | |
C8 | Aggregate development time spent on process changes (hours) | C1*C3*C5+C2*C3* C7 | 119,225119,225 | 117,840117,840 | 114,240114,240 | 104,880104,880 | |
C9 | Development time avoided (hours) | C8Y0-C8 | 00 | 1,3851,385 | 4,9854,985 | 14,34514,345 | |
C10 | Aggregate average hourly wage of developers and business analysts (fully burdened) | Composite | $58$58 | $58$58 | $53$53 | $48$48 | |
C11 | Productivity recapture | TEI standard | 80%80% | 80%80% | 80%80% | 80%80% | |
Ct | Development efficiencies | C9*C10*C11 | $0$0 | $64,264$64,264 | $211,364$211,364 | $550,848$550,848 | |
Risk adjustment | ↓5% | ||||||
Ctr | Development efficiencies (risk-adjusted) | $0$0 | $61,051$61,051 | $200,796$200,796 | $523,306$523,306 | ||
Three-year total: $785,152$785,152 | Three-year present value: $614,615$614,615 |
Evidence and data. Interviewees said that by orchestrating processes with Camunda, their organizations improved the quality of their processes in three ways:
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
At , non-orchestrated processes might have an error rate of 0%.
For , orchestrated processes might have an error rate of 0% in Year 1, 0% in Year 2, and 0% in Year 3. The error rate might fall as orchestrated processes are increasingly automated.
At , the average cost per error might be $0.
Risks. Overall, the model is moderately sensitive to changes to any of the assumptions about the composite organization (e.g., number of processes, percentage of processes orchestrated with Camunda, etc.)
In addition, this particular benefit is sensitive to changes to any of the following variables:
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $14.5 million.
For , this benefit might have a three-year, risk-adjusted PV of .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
D1 | Non-orchestrated processes | R8-(R17+R19) | 475475 | 455455 | 420420 | 360360 | |
D2 | Orchestrated processes | R17+R19 | 2525 | 4545 | 8080 | 140140 | |
D3 | Average instances per process | R9 | 328,000328,000 | 328,000328,000 | 328,000328,000 | 328,000328,000 | |
D4 | Average error rate for non-orchestrated processes | CompositeComposite | 0.084%0.084% | 0.084%0.084% | 0.084%0.084% | 0.084%0.084% | |
D5 | Errors in non-orchestrated processes | D1*D3*D4 | 130,872130,872 | 125,362125,362 | 115,718115,718 | 99,18799,187 | |
D6 | Percentage of orchestrated process that is automated | R10 | 60%60% | 66%66% | 73%73% | 80%80% | |
D7 | Average error rate for orchestrated processes | D4*(100%-D6)*95% | 0.032%0.032% | 0.027%0.027% | 0.022%0.022% | 0.016%0.016% | |
D8 | Errors in orchestrated processes | D2*D3*D7 | 2,6242,624 | 3,9853,985 | 5,7735,773 | 7,3477,347 | |
D9 | Aggregate process errors | D5+D8 | 133,496133,496 | 129,347129,347 | 121,491121,491 | 106,534106,534 | |
D10 | Incremental errors avoided with orchestration and automation | D9Y0-D9 | 00 | 4,1494,149 | 12,00512,005 | 26,96226,962 | |
D11 | Average cost per process error | CompositeComposite | $475$475 | $475$475 | $475$475 | $475$475 | |
Dt | Process quality | D10*D11 | $0$0 | $1,970,775$1,970,775 | $5,702,375$5,702,375 | $12,806,950$12,806,950 | |
Risk adjustment | ↓10% | ||||||
Dtr | Process quality (risk-adjusted) | $0$0 | $1,773,698$1,773,698 | $5,132,138$5,132,138 | $11,526,255$11,526,255 | ||
Three-year total: $18,432,090$18,432,090 | Three-year present value: $14,513,734$14,513,734 |
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
Improved collaboration between business and IT. Interviewees said more seamless collaboration between business stakeholders and IT led to faster development timelines. The organizations were able to leverage Camunda’s process mapping capabilities, such as BPMN, to reduce barriers to communication between technical and non-technical users. The visual modeling language allowed for more standardized communication across departments, which, in turn, eliminated bottlenecks to deliver value to customers more quickly.
Improved visibility into processes. Through improved visibility into end-to-end processes, organizations gained a better understanding of their processes and identified areas for improvement. The ability to monitor and assess current practices at a high level enabled more informed decision-making, optimized workflows, and ultimately enhanced overall organizational efficiency.
They continued: “We want to have visibility of all our processes. Having a single tool that provides insight into the process our teams are involved in helps us determine capacity more easily. Once team members are done with one process, having improved visibility allows us to identify their completion and assign them to a new task.”
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Camunda and later realize additional uses and business opportunities, including:
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|---|
Etr | Camunda costs | $240,000$240,000 | $480,000$480,000 | $960,000$960,000 | $1,680,000$1,680,000 | $3,360,000$3,360,000 | $2,731,961$2,731,961 |
Ftr | Process development | $6,328,380$6,328,380 | $4,984,752$4,984,752 | $6,987,414$6,987,414 | $8,546,688$8,546,688 | $26,847,234$26,847,234 | $23,055,948$23,055,948 |
Gtr | Training for new Camunda users | $27,562$27,562 | $18,374$18,374 | $27,984$27,984 | $32,947$32,947 | $106,867$106,867 | $92,147$92,147 |
Htr | Platform administration | $238,867$238,867 | $286,653$286,653 | $338,315$338,315 | $425,040$425,040 | $1,288,876$1,288,876 | $1,098,399$1,098,399 |
Itr | Employee retraining/change management | $169,763$169,763 | $99,682$99,682 | $113,597$113,597 | $175,582$175,582 | $558,624$558,624 | $486,182$486,182 |
Total costs (risk-adjusted) | $7,004,572$7,004,572 | $5,869,462$5,869,462 | $8,427,310$8,427,310 | $10,860,257$10,860,257 | $32,161,601$32,161,601 | $27,464,637$27,464,637 |
Evidence and data. The interviewees reported that Camunda is cost-effective compared to alternative platforms, and they said they appreciate the high level of enterprise support Camunda provided. Because Camunda licensing costs are based on platform usage, Camunda remained cost-effective both during the organizations’ initial deployments and as they expanded and scaled.
Modeling and assumptions. Forrester assumes the following about the composite organization:
Each of the project scopes at might entail Camunda platform usage costing $0 per year.
Pricing for may vary based on a variety of factors. For more information, contact Camunda.
Risks. Overall, the model is moderately sensitive to changes to any of the assumptions about the composite organization (e.g., number of processes, percentage of processes orchestrated with Camunda, etc.).
In addition, this particular cost is sensitive to changes to the following variables:
Both variables are highly dependent on the specifics of each use case.
Results. To account for these risks, Forrester adjusted this cost upward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2.7 million.
For , this cost might have a three-year, risk-adjusted PV of .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
E1 | Orchestrated processes | C2 | 2525 | 4545 | 8080 | 140140 | |
E2 | Project scopes | E1/20 | 11 | 22 | 44 | 77 | |
E3 | Cost per project scope | CompositeComposite | $200,000$200,000 | $200,000$200,000 | $200,000$200,000 | $200,000$200,000 | |
Et | Camunda costs | E2*E3 | $200,000$200,000 | $400,000$400,000 | $800,000$800,000 | $1,400,000$1,400,000 | |
Risk adjustment | ↑20% | ||||||
Etr | Camunda costs (risk-adjusted) | $240,000$240,000 | $480,000$480,000 | $960,000$960,000 | $1,680,000$1,680,000 | ||
Three-year total: $3,360,000$3,360,000 | Three-year present value: $2,731,961$2,731,961 |
Evidence and data. The biggest cost for the interviewees’ organizations was the effort they devoted to developing and automating processes. According to the interviewees, it took between three and 12 months to build processes of varying complexity or their organization’s specific use cases.
Each of the interviewees’ organizations developed processes incrementally: They started by automating a select number of core processes and then eventually ramped up to add more complex processes that required heavier Camunda usage. Organizations with more sophisticated development teams were able to achieve faster process development timelines and tackle more complex use cases with high business impact.
In addition to developing new processes, the interviewees’ organizations invested additional time to process changes by fine-tuning their initial development efforts to optimize business outcomes.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Process development at might involve 0 FTEs in Year 1, 0 FTEs in Year 2, and 0 FTEs in Year 3.
Risks. Overall, the model is moderately sensitive to changes to any of the assumptions about the composite organization (e.g., number of processes, percentage of processes orchestrated with Camunda, etc.).
In addition, this particular cost is sensitive to changes to the following variables:
Results. To account for these risks, Forrester adjusted this cost upward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $23 million.
For , this cost might have a three-year, risk-adjusted PV of .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
F1 | Orchestrated processes | C2 | 2525 | 4545 | 8080 | 140140 | |
F2 | Incremental orchestrated processes | F1-F1PY | 2525 | 2020 | 3535 | 6060 | |
F3 | Average time to develop a new process (hours) | CompositeComposite | 3,4283,428 | 3,1493,149 | 2,7552,755 | 2,1652,165 | |
F4 | New process development time (hours) | F2*F3 | 85,70085,700 | 62,98062,980 | 96,42596,425 | 129,900129,900 | |
F5 | Development time spent on process changes for orchestrated processes (hours) | C2*C3*C7C2*C3*C7 | 5,2255,225 | 8,6408,640 | 13,44013,440 | 18,48018,480 | |
F6 | Aggregate average hourly wage for developers and business analysts (fully burdened) | C10 | $58$58 | $58$58 | $53$53 | $48$48 | |
Ft | Process development | (F4+F5)*F6 | $5,273,650$5,273,650 | $4,153,960$4,153,960 | $5,822,845$5,822,845 | $7,122,240$7,122,240 | |
Risk adjustment | ↑20% | ||||||
Ftr | Process development (risk-adjusted) | $6,328,380$6,328,380 | $4,984,752$4,984,752 | $6,987,414$6,987,414 | $8,546,688$8,546,688 | ||
Three-year total: $26,847,234$26,847,234 | Three-year present value: $23,055,948$23,055,948 |
Evidence and data. Interviewees reported that new Camunda users required between two weeks’ and two months’ worth of training to achieve full proficiency. They said that while developers and more tech-savvy business analysts experienced a flatter learning curve, Camunda has a user-friendly interface that integrated with users’ existing interfaces to enable smooth onboarding experiences, even for those with less experience with new technologies.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
At , 0 developers and business analysts might undergo formal training on Camunda initially. Then 0 developers and business analysts might undergo training in Year 1, 0 in Year 2, and Year 3.
Risks. Overall, the model is moderately sensitive to changes to any of the assumptions about the composite organization (e.g., number of processes, percentage of processes orchestrated with Camunda, etc.). In addition, this cost is sensitive to changes to the percentage of developers and business analysts who undergo training. This value could vary from organization to organization for a variety of reasons.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $92,000.
For , this cost might have a three-year, risk-adjusted PV of .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
G1 | New process development time (hours) | F4 | 85,70085,700 | 62,98062,980 | 96,42596,425 | 129,900129,900 | |
G2 | Developers and business analysts who develop new processes | G1/2,080 | 4141 | 3030 | 4646 | 6262 | |
G3 | Percentage of developers and business analysts who undergo training | InterviewsInterviews | 20%20% | 20%20% | 20%20% | 20%20% | |
G4 | Developers and business analysts who undergo training | G3*G4 | 99 | 66 | 1010 | 1313 | |
G5 | Training time for a new Camunda user (weeks) | InterviewsInterviews | 44 | 44 | 44 | 44 | |
G6 | Percentage of time spent on Camunda training | InterviewsInterviews | 30%30% | 30%30% | 30%30% | 30%30% | |
G7 | Training time for a new Camunda user (hours) | G5*40*G6 | 4848 | 4848 | 4848 | 4848 | |
G8 | Aggregate average hourly wage for developers and business analysts (fully burdened) | C10 | $58$58 | $58$58 | $53$53 | $48$48 | |
Gt | Training for new Camunda users | G4*G7*G8 | $25,056$25,056 | $16,704$16,704 | $25,440$25,440 | $29,952$29,952 | |
Risk adjustment | ↑10% | ||||||
Gtr | Training for new Camunda users (risk-adjusted) | $27,562$27,562 | $18,374$18,374 | $27,984$27,984 | $32,947$32,947 | ||
Three-year total: $106,867$106,867 | Three-year present value: $92,147$92,147 |
Evidence and data. Each interviewee said their organization created a central team (e.g., center of excellence) to coordinate and support Camunda usage. These teams had multiple responsibilities: enablement and support (i.e., making it easier for other departments and business units to adopt Camunda for process automation), platform maintenance and oversight (e.g., updating the organization’s Camunda instances as needed), and performing other tasks unrelated to Camunda.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
At , the central team to support process orchestration across the organization might have 0 IT employees.
At , team members spend 0 hours on platform administration initially, 0 hours in Year 1, 0 hours in Year 2, and 0 hours in Year 3.
Risks. Overall, the model is moderately sensitive to changes to any of the assumptions about the composite organization (e.g., number of processes, percentage of processes orchestrated with Camunda, etc.).
In addition, this particular cost is sensitive to changes to the following variables:
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.1 million.
For , this cost might have a three-year, risk-adjusted PV of .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
H1 | Team members | G2Y0*20% | 99 | 99 | 99 | 99 | |
H2 | Percentage of time spent on user enablement and support | InterviewsInterviews | 15%15% | 15%15% | 15%15% | 15%15% | |
H3 | Percentage of time spent on platform management | H3Y0/R15Y0*H3H3Y0/R15Y0*H3 | 5%5% | 9%9% | 16%16% | 28%28% | |
H4 | Total administration time (hours) | H1*2,080*(H2+H3) | 3,7443,744 | 4,4934,493 | 5,8035,803 | 8,0508,050 | |
H5 | Aggregate average hourly wage for developers and business analysts (fully burdened) | C10 | $58$58 | $58$58 | $53$53 | $48$48 | |
Ht | Platform administration | H4*H5 | $217,152$217,152 | $260,594$260,594 | $307,559$307,559 | $386,400$386,400 | |
Risk adjustment | ↑10% | ||||||
Htr | Platform administration (risk-adjusted) | $238,867$238,867 | $286,653$286,653 | $338,315$338,315 | $425,040$425,040 | ||
Three-year total: $1,288,876$1,288,876 | Three-year present value: $1,098,399$1,098,399 |
Evidence and data. The interviewees’ organizations incurred light costs to retrain employees when processes changed. As processes went from being manual to orchestrated with Camunda, end-user employees had to learn new workflows and tools. The interviewees viewed these costs as relatively minor.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
At , 0 might require retraining initially. Then 0 employees might require retraining in Year 1, 0 in Year 2, and 0 in Year 3.
Risks. Overall, the model is moderately sensitive to changes to any of the assumptions about the composite organization (e.g., number of processes, percentage of processes orchestrated with Camunda, average process instances, average employee salary, etc.).
In addition, this cost is slightly sensitive to changes to retraining time per employee.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $486,000.
For , this cost might have a three-year, risk-adjusted PV of .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
I1 | Orchestrated processes | C2 | 2525 | 4545 | 8080 | 140140 | |
I2 | Average instances per process | R9 | 328,000328,000 | 328,000328,000 | 328,000328,000 | 328,000328,000 | |
I3 | Employee time to perform orchestrated processes (hours) | I1*I2*B9 | 1,394,0001,394,000 | 2,214,0002,214,000 | 3,148,8003,148,800 | 4,592,0004,592,000 | |
I4 | Employees who perform orchestrated processes | I3/2,080 | 671671 | 1,0651,065 | 1,5141,514 | 2,2082,208 | |
I5 | Employees who require retraining | I4-I4PY | 671671 | 394394 | 449449 | 694694 | |
I6 | Retraining time per employee (hours) | G7*10% | 55 | 55 | 55 | 55 | |
I7 | Average employee hourly wage (fully burdened) | R7 | $46$46 | $46$46 | $46$46 | $46$46 | |
It | Employee retraining/change management | I5*I6*I7 | $154,330$154,330 | $90,620$90,620 | $103,270$103,270 | $159,620$159,620 | |
Risk adjustment | ↑10% | ||||||
Itr | Employee retraining/change management (risk-adjusted) | $169,763$169,763 | $99,682$99,682 | $113,597$113,597 | $175,582$175,582 | ||
Three-year total: $558,624$558,624 | Three-year present value: $486,182$486,182 |
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
---|---|---|---|---|---|---|
Total costs | ($7,004,572)($7,004,572) | ($5,869,462)($5,869,462) | ($8,427,310)($8,427,310) | ($10,860,257)($10,860,257) | ($32,161,601)($32,161,601) | ($27,464,637)($27,464,637) |
Total benefits | $0$0 | $17,673,289$17,673,289 | $48,342,450$48,342,450 | $111,158,117$111,158,117 | $177,173,857$177,173,857 | $139,533,804$139,533,804 |
Net benefits | ($7,004,572)($7,004,572) | $11,803,827$11,803,827 | $39,915,140$39,915,140 | $100,297,860$100,297,860 | $145,012,256$145,012,256 | $112,069,167$112,069,167 |
ROI | 408%408% | |||||
Payback | 8 months8 months |
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
Benefits represent the value delivered to the business by the product. The TEI methodology places equal weight on the measure of benefits and the measure of costs, allowing for a full examination of the effect of the technology on the entire organization.
Costs consider all expenses necessary to deliver the proposed value, or benefits, of the product. The cost category within TEI captures incremental costs over the existing environment for ongoing costs associated with the solution.
Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. Having the ability to capture that benefit has a PV that can be estimated.
Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”
The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.
Related Forrester Research
“Design A Future-Proof Process Automation Technology Fabric,” Forrester Research, Inc., January 23, 2023.
“Use 10 Criteria To Choose Your Process Automation Platform,” Forrester Research, Inc., June 2, 2023.
1 Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
2 Forrester assumes process instances follow a normal distribution: 68% of processes (340 processes) occur 100,000 times per year, 27% of processes (135 processes) occur 500,000 times per year, and 5% of processes (25 processes) occur 2,500,000 times per year. In total, the composite organization sees 164 million process instances per year, and the weighted average number of instances per process per year is 328,000.
3 Source: “Margins by Sector (US),” New York University Stern School of Business, January 2023.
4 Forrester assumes external process instances per customer follows a normal distribution: One external process instance serves one customer 68% of the time, two external process instances serve one customer 27% of the time, and four external process instances serve one customer 5% of the time. According to this distribution, 82% of customers interact with external processes once per year, 16% of customers interact with external processes twice per year, and 2% of customers interact with external processes four times per year. In total, the composite organization has around 66 million instances of external processes per year and 55 million customers served. This yields an average of 1.2 external process instances per customer.
5 Forrester assumes revenues per customer are approximately normally distributed and Pareto efficient: 95% of customers account for 20% of revenues (these customers have an average revenue per customer of $96) and 5% of customers account for 80% of revenues. These customers have an average revenue per customer of $7,273. The composite organization’s average revenue per customer is $455. However, the processes orchestrated with Camunda retain slightly more higher-value customers (e.g., customers who are upsold, purchase additional services, etc.). Forrester assumes 93% of the composite’s retained incremental customers are lower-value customers and 7% are higher-value customers. Because the incremental customers retained includes more higher-value customers than customer base as a whole, they have a slightly higher average revenue per customer of $600.
6 Forrester assumes manual process instance completion times follow a normal distribution: 68% of process instances take 0.08 hours or 5 minutes to complete manually, 27% take 0.4 hours or 24 minutes to complete manually, 3% take two hours to complete manually; and 2% take 10 hours to complete manually. The composite needs nearly 20,000 employees to complete all internal process instances manually. Each spends 38% of their time on processes that take less than 1 hour to complete and 62% of their time on process instances that take 2 hours or more. Thus, the majority of employee time is spent on time-consuming processes even though they are the minority of total process instances. With this distribution, the weighted average time for the composite organization to manually complete a process instance is 0.4 hours.
7 The average fully burdened employee salary at the composite organization is $96,000 per year. Forrester assumes salaries at the composite organization follow a normal distribution: 68% of employees earn fully burdened annual salaries of $80,000 or less, 27% earn salaries of around $120,000, and 5% earn salaries of $180,000 or more. This distribution is in line with average salary data for private sector workers in industries such as insurance, finance, etc. Total payroll at the composite organization is $5.748 billion. Source: “Employer Costs for Employees Compensation Summary,” U.S. Bureau of Labor Statistics press release, December 15, 2023.
8 Forrester assumes the composite organization’s distribution of process changes is approximately normal: 68% of its processes change once every two years and 32% change twice per year.
9 Forrester assumes developers earn an annual fully burdened salary of $120,000 and business analysts earn an annual fully burdened salary of $80,000. Forrester also assumes developers handle all process development work in Year 1, developers perform 75% of this work in Year 2 while business analysts handle 25%, and developers perform 50% of this work in Year 3 while business analysts handle 50%. Thus, as business analysts do more process development work, the aggregate average hourly rate of team members who develop and change processes falls from $58 in Year 1 (when the team is comprised entirely by developers) to $48 in Year 3 (when the team is comprised half by developers and half by business analysts).
10 Forrester assumes that the costs of process errors follow a normal distribution: 68% of process errors cost $18 (calculated by multiplying the average time to perform a non-orchestrated process instance with the average employee hourly wage), 27% of process errors cost $180 (e.g., when employees spend additional time troubleshooting and fixing issues that are trickier than usual); 3% of errors cost $1,800, and 2% of errors cost $18,000 due to fines for violating regulations. With this distribution, process errors cost the composite organization more than $63.3 million annually. Even though 95% of the process errors entail rework only, more than 87% of the composite’s costs come from regulatory violations. This distribution yields a weighted average cost per error of $475 for the composite organization.
11 Forrester assumes the average time for the composite organization to change processes is typically 20% of the average time to develop new processes. For example, when changing a process takes 209 hours, it requires 1,045 hours to develop most new processes. Forrester also assumes that in each year, new process development times are normally distributed. For example, during the initial period, 68% of processes take 1,045 hours to develop, 27% take 5,225 hours, and 5% take 26,125 hours. This is how Forrester determined the values for F3.
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