The Total Economic Impact™ Of Cisco Spaces
Cost Savings And Business Benefits Enabled By Cisco Spaces
A Forrester Total Economic Impact ™ Study Commissioned By Cisco, December 2024
Smart spaces are increasingly critical to firms’ ability to win, serve, and retain their customers.1 Buildings are strategic assets with a complex array of structures and systems (e.g., lighting, security, heating, ventilation) that facilities teams and technology managers must proactively manage. As companies bring employees back to the office and seek out ways to enhance the experience of workers and accelerate sustainability and performance of employees in buildings, smart office technologies are gaining significant traction. The diverse array of technologies and use cases differentiate and personalize employee and visitor experiences in the building. There are a range of technologies that contribute to creating smart spaces, including Cisco Spaces.
Cisco Spaces is a software layer on top of Cisco hardware (e.g., access points, switches, collaboration devices, and sensors) that make the hardware more valuable by being a central aggregation point for data created by the hardware. Both IT users and line-of-business users can leverage the information for a variety of use cases.
Cisco commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Cisco Spaces.2 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Cisco Spaces on their organizations.
Return on investment (ROI)
172%
Net present value (NPV)
$6.84M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed eight representatives from six organizations with experience using Cisco Spaces. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a global organization with 100 office buildings, 95,000 employees, and $88 billion in annual revenue. The composite organization deploys Cisco Spaces across a small percentage of its buildings to power an occupancy and optimization use case.
Interviewees said that prior to using Cisco Spaces, their organizations either used on-premises-based suites of mobile software solutions to detect, connect, and engage the mobile devices within a venue or lacked a software solution for location services. However, interviewees struggled with manual inefficiencies, a lack of data, poor experiences, and challenges with maintaining the legacy software.
After the investment in Cisco Spaces, the interviewees experienced many use case-specific benefits, including insights, improvements to customer experience, additional revenues created by location-based marketing campaigns, improved asset tracking, employee efficiency, real estate optimizations, and IT savings from improved productivity and retiring the legacy on prem solution.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- Improved employee productivity by avoiding 12 minutes of navigation time per in-person meeting. In the post-pandemic era, the composite organization uses insights enabled by Cisco Spaces to help understand utilization and occupancy in its workspaces. As a result, the organization improves productivity and the return-to-office (RTO) experience by making meeting rooms available, adapting workspaces in response to capacity constraints, and improving productivity by helping employees navigate meeting spaces. Over three years, six in-person meetings per week and a cumulative total of 171,000 productive hours are recaptured, providing a productivity lift worth $8.9 million to the composite organization.
- Avoided cost of prior environment’s licensing, maintenance, and server upgrades. Moving to Cisco Spaces enables the composite organization to reduce effort spent on troubleshooting the legacy environment, drives cost savings related to the legacy environment’s licensing and maintenance, and helps the composite organization avoid the cost of upgrading the legacy server infrastructure. Over three years, the decommissioned legacy solution is worth $1.9 million to the composite organization.
Unquantified benefits. Benefits that provide value for the interviewees’ organization but are not quantified for this study include:
- Helped avoid downtime and costly downstream consequences. With the move to Cisco Spaces, interviewees reduced system downtime, helping avoid negative impacts like spoiled medications for the healthcare organizations or spoiled groceries for the retail organization.
- Informed technology buying purchases and response to hardware issues. The interviewees noted that Cisco Spaces was used to measure how quickly IT addressed hardware issues or component failures and used the data to help make decisions about how to move meeting reservations or incur the cost of bringing in a temporary unit.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Cisco Spaces licensing totals $3.8 million over three years. The composite licenses Cisco Spaces based on its number of Act and Extend software licenses.
- Internal implementation efforts total $106,000 over three years. The composite organization has an implementation team of four resources that dedicate a small portion of their time to the initial implementation of Cisco Spaces and its ongoing expansion. The composite also trains a group of line-of-business users on how to use the Cisco Spaces data.
- Ongoing management totals $39,000 over three years. Four internal resources dedicate an hour each week to the ongoing management of Cisco Spaces.
The representative interviews and financial analysis found that a composite organization experiences benefits of $10.80 million over three years versus costs of $3.97 million, adding up to a net present value (NPV) of $6.83 million and an ROI of 172%.
Key Statistics
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Return on investment (ROI)
172%
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Benefits PV
$10.80M
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Net present value (NPV)
$6.84M
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Payback
<6 months
Benefits (Three-Year)
Employee productivity savings Prior environment savingsTEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Cisco Spaces.
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 Cisco Spaces can have on an organization.
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Due Diligence
Interviewed Cisco stakeholders and Forrester analysts to gather data relative to Cisco Spaces.
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Interviews
Interviewed eight representatives at six organizations using Cisco Spaces to obtain data about costs, benefits, and risks.
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Composite Organization
Designed a composite organization based on characteristics of the interviewees’ organizations.
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Financial Model Framework
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.
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Case Study
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.
Disclosures
Readers should be aware of the following:
This study is commissioned by Cisco 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 Cisco Spaces.
Cisco 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.
Cisco provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Veronica Iles
Drivers leading to the Cisco Spaces investment
Interviews
| Role | Industry | Cisco Spaces Use Case | Employees | Revenue |
|---|---|---|---|---|
|
Head of technology
IT product owner |
Retail | Wi-Fi connectivity | 414,000 | $24 billion |
| Senior network core engineer | Healthcare | Asset tracking | 30,000 | Private — multibillion in revenue |
|
Program manager
Senior analyst, workplace intelligence |
Financial services | Occupancy and utilization | 75,000 |
$61 billion
|
| IT consultant | Real estate | Wi-Fi connectivity | 500 | Private, $11 billion assets under management |
| Wireless network engineer | Healthcare | Asset tracking and Wi-Fi connectivity | 8,000 | Government entity |
| Product manager of enterprise technology | Automotive | Asset tracking and occupancy and utilization | 177,000 | $180 billion |
Key Challenges
Before adopting Cisco Spaces, half of the interviewees noted their organizations used Cisco CMX, an on-premises predecessor to Cisco Spaces. Of the remaining interviewees, one said their organization used security camera feeds to manually count people coming in and out of locations, one relied on irregular manual counting of people in conference rooms by facilities staff, and one relied on badge data. All the organizations had large investments in Cisco infrastructure.
The interviewees noted how their organizations struggled with common challenges, including:
- Existing data that wasn’t robust or trusted enough to inform decision-making. Regardless of their organizations’ prior environments, interviewees shared that the data available to them was lacking. The IT consultant at a real estate organization shared, “They were using cameras to count people coming in and out of the locations, but unfortunately that was not giving them the information that they needed because those cameras were looking at bodies and not Wi-Fi.” A more mature approach incorporated the utilization of Cisco devices to estimate occupancy; however, this method still did not provide the desired data depth. The program manager at a financial services organization shared, “We were looking strictly at if a device was utilized, but we weren’t able to report on how many people were in the room or what time of day or for what durations.”
- Complaints about finding available conference rooms. The interviewees from the financial services and automotive organizations both noted they had workplace use cases that measure occupancy of office spaces. These interviewees shared that before Cisco Spaces, employees frequently complained about a lack of available conference rooms, damaging return-to-office efforts and creating a poor experience for employees. The program manager at the financial services organization shared: “We had a tremendous number of complaints saying, ‘I can never find a room because they’re all booked.’ But if they walked to the specific space, the rooms weren’t occupied. They were booked in the system, but not occupied. We are telling employees, ‘You need to be in the office three days a week,’ so we need to be able to prove to colleagues that we do, in fact, have meeting space available.”
- Poor experience or a lack of connectivity for customers. The interviewees from the retail and real estate organizations noted that their organizations’ pain points were primarily related to poor Wi-Fi access options for their customers.
- Legacy on-premises solution maintenance. Interviewees whose organizations used Cisco CMX struggled with maintaining the on-premises infrastructure and spent significant time troubleshooting the environment. The senior network core engineer at a healthcare organization described the situation at their organization: “Before we embarked with Cisco Spaces, we had CMX, which was physical hardware servers in our data center. And we had two different clusters on multiple hardware servers. It wasn’t cheap, and it was very problematic for us.”
Investment Objectives
Decision-makers at interviewees’ organizations searched for a solution that could:
- Provide customers with Wi-Fi connectivity.
- Use data insights for employee capacity and space planning.
- Enable migration of their legacy on-premises solution to a cloud-based solution.
Interviewees noted that they did not conduct in-depth RFPs or evaluate other vendors because the existing investment in Cisco infrastructure meant that they did not need to purchase any additional hardware or add a new vendor to manage.
Composite Organization
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 eight 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 generates $88 billion in global revenues and has 95,000 employees. The organization has 100 workplace buildings encompassing millions of square feet of office spaces. The organization has a strong brand and global recognition.
Deployment characteristics. The composite organization has a large investment in Cisco infrastructure, including infrastructure for networking, security, collaboration, computing, and supporting software. It begins using Cisco Spaces in a portion of its office space and expands its coverage each year.
Quantified benefit data as applied to the composite
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Employee productivity savings | $2,731,725 | $3,642,300 | $4,552,875 | $10,926,900 | $8,914,194 |
| Btr | Prior environment savings | $783,147 | $747,147 | $747,147 | $2,277,440 | $1,890,771 |
| Total benefits (risk-adjusted) | $3,514,872 | $4,389,447 | $5,300,022 | $13,204,340 | $10,804,965 | |
Employee Productivity Savings
Evidence and data. As the interviewees’ organizations implemented return-to-work policies for their employees following the COVID-19 pandemic, many tech managers and facility stakeholders looked to smart spaces technologies and IoT solutions to facilitate a collaborative, comfortable, and productive office environment. The two interviewees with occupancy and utilization use cases measured improvements to their employee productivity as a result of their Cisco Spaces deployment. Additionally, employees found meeting rooms more efficiently, improving their productivity and reducing frustrations around finding in-person meeting spaces.
Interviewees from the financial services and automotive companies provided the following examples of the impact of Cisco Spaces:
- Improved productivity and RTO experience by making meeting rooms available. Before deploying Cisco Spaces, interviewees noted their employees complained about their inability to find appropriate meeting rooms while in the office. These complaints had a negative impact on return-to-office efforts and employee experience. The perception that there were no available meeting rooms was due to “zombie meetings,” or meeting rooms that were booked but did not have any physical occupants. The senior analyst of workplace intelligence at the financial services organization discovered that 25% of their meetings were zombie meetings with insights provided by Cisco Spaces. They shared: “There were continual complaints about there not being enough meeting rooms. So, we went through and looked at how many meetings were scheduled and how many people actually showed up. We were able to take off 25% of the meetings for that series of rooms.”
- Improved productivity and RTO experience by adapting workspaces in response to capacity constraints. Another hurdle interviewees noted that employees faced when returning to the office was adapting to desk hoteling, or a lack of assigned seating. This frustration was exacerbated by the inconsistent days spent in the office and an influx of employees on certain days that exceeded desk capacity. The product manager of enterprise technology at the automotive company shared: “[RTO expectations are] dependent upon the team, but across the board, the answer is one day a week minimum. The big [Cisco Spaces] component is understanding what the busiest days of the week are to identify capacity constraints. So, Monday and Tuesday, everyone’s happy because they can find seats, but Wednesday, everyone’s annoyed because that’s the one day we are at 110% capacity at all six of the collaboration centers.”
- Improved productivity by helping employees navigate meeting spaces. Interviewees shared that before the pandemic, employees used to have a dedicated seat which has now been changed to open seating. Employees struggled to navigate large buildings with poor conference room naming conventions. Searching for a meeting room resulted in lost productivity. Insights enabled by Cisco Spaces helped employees quickly navigate to their meeting space. The product manager of enterprise technology at the automotive company shared: “Productivity is the big [benefit]. Imagine a new building, a new meeting, and you don’t know where to go. You end up being 10 minutes late for the meeting. Now, think of the 12 to 15 people sitting in that room, they have to either start over or they waited for you to get there.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization deploys Cisco Spaces across 3% of its office footprints and employees in Year 1, 4% in Year 2, and 5% in Year 3. Therefore, a total of 2,850 employees in Year 1, 3,800 in Year 2, and 4,750 in Year 3 are impacted by the Cisco Spaces adoption.
- The composite organization’s return-to-office efforts requires employees to be in the office three days per week. On average, during these in-office days, employees have two collaborative meetings that take place in a conference or meeting room that is Cisco Spaces enabled.
- The Cisco Spaces data enables the composite organization to appropriately flag when meeting rooms are available and where they are located in a particular building or floor. As a result, employees save 12 minutes on average per in-person meeting, including finding and booking a meeting space, navigating to the appropriate room, and reducing the time spent waiting for colleagues.
- Of the time savings generated by this productivity lift, 25% of it is recaptured as business value by the composite organization.
- The fully burdened hourly rate for workplace knowledge workers is $71.
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this benefit will vary depending on the following:
- This benefit applies to the occupancy and utilization for workspace use case. Organizations with other use cases may or may not realize productivity lifts for employees.
- The deployment of Cisco Spaces and the size, scale, and complexity of the organization.
- The number of employees impacted by the Cisco Spaces data.
- The fully burdened cost of workplace employees. The size and type of company, location of the employees, and employee seniority will all factor in their burdened costs.
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 $8.9 million.
Employee Productivity Savings
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| A1 | Number of employees engaging in workplace locations using Cisco Spaces | Composite | 2,850 | 3,800 | 4,750 |
| A2 | Average number of in-person meetings per week | Composite | 6 | 6 | 6 |
| A3 | Minutes saved with Cisco Spaces per meeting | Interviews | 12 | 12 | 12 |
| A4 | Productivity recapture | Assumption | 25% | 25% | 25% |
| A5 | Hours saved by employees in workplace locations using Cisco Spaces | A1*A2*50 weeks *A3/60 minutes *A4 | 42,750 | 57,000 | 71,250 |
| A6 | Fully burdened hourly rate for workplace knowledge workers | Composite | $71 | $71 | $71 |
| At | Employee productivity savings | A5*A6 | $3,035,250 | $4,047,000 | $5,058,750 |
| Risk adjustment | ↓10% | ||||
| Atr | Employee productivity savings (risk-adjusted) | $2,731,725 | $3,642,300 | $4,552,875 | |
| Three-year total: $10,926,900 | Three-year present value: $8,914,194 | ||||
Prior Environment Savings
Evidence and data. A significant benefit the interviewees shared was the decommissioning of legacy on-premises CMX solutions. Interviewees shared three categories of savings related to their legacy environment:
- Reduced effort spent on troubleshooting. Interviewees shared that they had to dedicate time and resources to responding to issues with their on-premises CMX deployment. One interviewee noted that they had 25% of an FTE, another described dealing with six to eight problems per month, each requiring 2 to 7 hours of effort to resolve. A third interviewee noted that they had approximately 50 issues with CMX annually that affected availability. With Cisco Spaces, interviewees said it was much easier to support, and they could resolve an issue ten times faster than in their previous environment. Interviewees also noted that the number of issues decreased. The wireless network engineer at a healthcare organization shared: “I was the one managing CMX and the big pain was the troubleshooting. Since moving to Cisco Spaces, troubleshooting for the infant protection system is so much easier. As opposed to before, we had to rely on multiple pieces [of infrastructure] and call people to check their part. At this point, it’s 5 to 10 minutes and I can drill down where the problem is. Then from there, I can engage the support needed. The ease of use and what I can do with [Cisco Spaces] has cut down on my stress.”
- Cost savings related to licensing and maintenance from retiring their on-premises solution. Decommissioning the legacy environment hardware offset licensing costs and ongoing maintenance efforts. The wireless network engineer at a healthcare organization shared: “We went live in March and about a week later we decommissioned the on-premises equipment. [Now] there’s no upkeep on those physical appliances or any licensing associated with them.”
- Avoided cost of upgrading legacy environment. Interviewees shared that if they had chosen to stay with their legacy environment, they would have needed to invest between $30,000 to $50,000 to refresh the existing server infrastructure. The senior network core engineer at a healthcare company shared: “We would have had to replace the servers with more robust hardware. And not only that, but the time to plan it out, the time to upgrade, the time to work with all the other teams through issues, installing software, patching, scanning, and security vulnerability.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization’s prior environment is an on-premises deployment of Cisco CMX. The IT team troubleshot 51 issues annually with the tool.
- On average, an issue took 75 minutes to resolve.
- After the deployment of Cisco Spaces, issues were resolved in just over 7 minutes, on average.
- The fully burdened hourly rate for IT employees is $78.
- The composite organization paid $529,000 in licensing costs for CMX and incurred $32,448 in maintenance costs. These costs are eliminated with the deployment of Cisco Spaces.
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this benefit will vary depending on the following:
- This benefit applies to the occupancy and utilization for workspaces use case. Organizations with other use cases may or may not realize similar benefits for removing manual occupancy tasks.
- The deployment of Cisco Spaces and the size, scale, and complexity of the organization.
- An organization without any prior tools or solutions for location services will not receive the same prior environment savings as an organization that is able to retire and decommission legacy hardware and software.
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 $1.9 million.
Prior Environment Savings
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| B1 | Number of issues requiring troubleshooting | Composite | 51 | 51 | 51 |
| B2 | Minutes to resolve an issue in prior environment | Interviews | 75 | 75 | 75 |
| B3 | Minutes to resolve an issue with Cisco Spaces | Interviews | 7.5 | 7.5 | 7.5 |
| B4 | Fully burdened hourly rate for an IT employee | Composite | $78 | $78 | $78 |
| B5 | Subtotal: Troubleshooting savings | B1*(B2-B3)*B4 | $268,515 | $268,515 | $268,515 |
| B6 | Avoided licensing for CMX | Composite | $529,200 | $529,200 | $529,200 |
| B7 | Avoided maintenance for CMX | Interviews | $32,448 | $32,448 | $32,448 |
| B8 | Cost to upgrade CMX hardware | Interviews | $40,000 | $0 | $0 |
| B9 | Subtotal: CMX decommissioning savings | B6+B7+B8 | $601,648 | $561,648 | $561,648 |
| Bt | Prior environment savings | B5+B9 | $870,163 | $830,163 | $830,163 |
| Risk adjustment | ↓10% | ||||
| Btr | Prior environment savings (risk-adjusted) | $783,147 | $747,147 | $747,147 | |
| Three-year total: $2,277,440 | Three-year present value: $1,890,771 | ||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- Helped avoid downtime and costly downstream consequences. Compared to the prior environment, interviewees noted that when their organizations retired their legacy on-premise solutions, they were able to avoid losses caused by system downtime. The downstream impact of downtime was difficult to measure. The senior network core engineer at a healthcare organization shared: “I’m not sure how to quantify the downtime, but let’s say that in six months we had 50 issues with CMX that affected availability. In the last two years, we’ve had two problems with Cisco Spaces that required us to restart the connectors. [Downtime] lends itself to a lot of damage; for example, refrigeration is a big thing for us because we have medicine that we have to be very careful around. If we lose visibility into the temperature tags, it can lead to bad medicine. Compared to before, I think that [Cisco Spaces is] paying for itself. It’s really night and day compared to the old environment. I don’t have a number for you in terms of return, but it clearly is a big difference.”
- Informed technology buying purchases and response to hardware issues. Interviewees noted that they use Cisco Spaces data to better understand how to build their digital and physical infrastructure to meet employee needs. They used Cisco Spaces to measure how quickly IT addressed hardware issues or component failures and used the data to help make decisions about how to move meeting reservations or incur the cost of bringing in a temporary unit.
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Cisco Spaces and later realize additional uses and business opportunities, including:
- Adopting additional use cases. Cisco Spaces lends itself to many use cases, including occupancy and utilization, asset location tracking, Wi-Fi onboarding for visitors, and more. Interviewees noted that they will work together with their Cisco counterparts and their executives to explore new ways to utilize the Cisco Spaces data. See use case spotlights below.
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A ).
Quantified cost data as applied to the composite
Total Costs
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Ctr | Cisco Spaces licensing | $0 | $1,387,911 | $1,542,123 | $1,713,470 | $4,643,504 | $3,823,574 |
| Dtr | Implementation | $54,538 | $19,913 | $20,810 | $21,707 | $116,969 | $106,148 |
| Etr | Ongoing management | $0 | $15,620 | $15,620 | $15,620 | $46,860 | $38,845 |
| Total costs (risk-adjusted) | $54,538 | $1,423,444 | $1,578,553 | $1,750,797 | $4,807,333 | $3,968,567 | |
Cisco Spaces Licensing
Evidence and data. The subscription for Cisco Spaces is calculated either per device (access point for example) or per building square footage. The interviewees shared that their organizations’ subscriptions were calculated per device and varied between $14,000 and $3.5 million, depending on size of the organization and the number of Cisco hardware devices.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
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The composite’s Cisco Spaces contract is based on per device pricing:
- The composite organization has 11,907 EXT devices in Year 1, 13,230 in Year 2, and 14,700 in Year 3.
- The composite organization has 2,025 ACT devices in Year 1, 2,250 in Year 2, and 2,500 in Year 3.
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this cost will vary depending on the following:
- The number of ACT and EXT devices in use at the organization.
- The terms of the contract.
- Any discounts negotiated.
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 $3.8 million.
Cisco Spaces Licensing
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| C1 | Number of EXT devices | Composite | 11,907 | 13,230 | 14,700 | ||
| C2 | Number of ACT devices | Composite | 2,025 | 2,250 | 2,500 | ||
| C3 | Cisco Spaces licensing cost per EXT endpoint | Composite | $66 | $66 | $66 | ||
| C4 | Cisco Spaces licensing cost per ACT endpoint | Composite | $235 | $235 | $235 | ||
| Ct | Cisco Spaces licensing | C1*C3+C2*C4 | $0 | $1,261,737 | $1,401,930 | $1,557,700 | |
| Risk adjustment | ↑10% | ||||||
| Ctr | Cisco Spaces licensing (risk-adjusted) | $0 | $1,387,911 | $1,542,123 | $1,713,470 | ||
| Three-year total: $4,643,504 | Three-year present value: $3,823,574 | ||||||
Implementation
Evidence and data. Interviewees shared internal costs related to the initial and ongoing implementations for Cisco Spaces and change management efforts.
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Implementation process.
The first step of the implementation for interviewees was to spend several months planning, researching, working with virtualization teams for virtual machine (VM) spin-up, and working with partners. The next phase of the implementation of Cisco Spaces was comprised of uploading floor and building plans and validating endpoints against the mapping. Interviewees also noted that they did not consider themselves finished with the implementation of Cisco Spaces and plan to make continuous efforts to expand their visibility with the software.
When describing tasks associated with the implementation, the program manager at a financial services organization described: “We upload the floor plans for either a building or a floor plan. We thought initially that PDFs would be better, but now we’re going with the CAD files, the DWGs. And then once it’s loaded, I go in and do manual linking to make video endpoints and rooms match. It was fully expected, but it’s just a process we have to do.” - Implementation team. Interviewees shared descriptions of their implementation teams, which ranged from a single IT resource with a high level of dedication to a team of four with minimal levels of dedication.
- Training. Interviewees offered a small level of training and information sharing sessions for their Cisco Spaces users, including facilities managers and IT teams. The senior network core engineer at a healthcare company shared: “We had a couple of sessions internally to cover Cisco Spaces with the team. I’ve also had sessions with our manager and some of our leadership to get them acquainted and to sell them on opportunities with Cisco Spaces.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization has an initial 10-month implementation for Cisco Spaces. Each year following, an additional three months are spent on implementation tasks as the composite organization expands to additional buildings and floors.
- The implementation team is a consistent four-person team that only spends a couple hours per week on the Cisco Spaces implementation. One person is responsible for reporting, including cleaning data, while loads floor plans into Cisco Spaces. Another person validates data, while one plays the role of program manager.
- On average, the implementation individuals dedicate 16 hours per month to Cisco Spaces-related tasks.
- The composite organization trains the facilities management team on how to use Cisco Spaces data and brings awareness to the solution’s features and functions. On average, each person receives 2 hours of training each year.
- The fully burdened hourly rate for IT employees is $78.
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this cost will vary depending on the following:
- The time and effort dedicated to the uploading of floor plans into Cisco Spaces.
- The number and type of resources trained.
- The deployment of Cisco Spaces and the size, scale, and complexity of the organization.
Results. To account for these risks, Forrester adjusted this cost upward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $106,000.
Implementation
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| D1 | Months of implementation | Composite | 10 | 3 | 3 | 3 | |
| D2 | Implementation team | Composite | 4 | 4 | 4 | 4 | |
| D3 | Hours spent each month on implementation | Composite | 16 | 16 | 16 | 16 | |
| D4 | Subtotal: Implementation labor costs | D1*D2*D3*D8 | $47,424 | $14,976 | $14,976 | $14,976 | |
| D5 | Facilities management team size | Composite | 15 | 20 | 25 | ||
| D6 | Hours of training on Cisco Spaces | Composite | 2 | 2 | 2 | ||
| D7 | Subtotal: Training costs | D5*D8*D6 | $0 | $2,340 | $3,120 | $3,900 | |
| D8 | Fully burdened hourly rate for an IT employee | Composite | $78 | $78 | $78 | $78 | |
| Dt | Implementation | D4+D7 | $47,424 | $17,316 | $18,096 | $18,876 | |
| Risk adjustment | ↑15% | ||||||
| Dtr | Implementation (risk-adjusted) | $54,538 | $19,913 | $20,810 | $21,707 | ||
| Three-year total: $116,969 | Three-year present value: $106,148 | ||||||
Ongoing Management
Evidence and data. Interviewees’ organizations incurred labor costs for the ongoing management and operation of the Cisco Spaces environment above and beyond the implementation efforts quantified in the previous cost section. Interviewees shared the following examples of internal labor efforts:
- Insight creation. To create insights from the Cisco Spaces data, interviewees shared that they exported data into visualization and reporting software like Tableau. The program manager at a financial services organizations shared, “Because the [Cisco Spaces] reporting dashboard isn’t complete, we are taking the data from Cisco into Tableau and the real estate team built their reporting and dashboards there.”
- Ongoing management and maintenance. Interviewees noted that changes to floor plans, end points, and other routine changes required maintenance to the Cisco Spaces environment. The program manager at a financial services shared: “There’s always going to be a four-person team that’s managing Cisco Spaces. I’m going to have an engineer that is intimate with Cisco Spaces, a facilities manager that is intimate with floor plans of all the buildings, a facilities manager that is intimate with how the data needs to be represented, and then a project manager.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization has four internal resources involved with managing Cisco Spaces and related integrations.
- They each dedicated approximately 1 hour a week to Cisco Spaces-related tasks.
- The fully burdened hourly rate for a workplace knowledge worker is $71.
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this cost will vary depending on the following:
- The burdened cost of workplace employees. The size and type of company, location of the employees, and employee seniority will all factor into their burdened costs.
- Time and effort dedicated to the uploading of floor plans into Cisco Spaces.
- The deployment of Cisco Spaces and the size, scale, and complexity of the organization.
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 $39,000.
Ongoing Management
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| E1 | Resources involved with managing Cisco Spaces and related integrations | Composite | 4 | 4 | 4 | |
| E2 | Hours dedicated weekly to managing Cisco Spaces by each resource | Composite | 1 | 1 | 1 | |
| E3 | Fully burdened rate for a workplace knowledge worker | Composite | $71 | $71 | $71 | |
| Et | Ongoing management | E1*E2*50 weeks *E3 | $0 | $14,200 | $14,200 | $14,200 |
| Risk adjustment | ↑10% | |||||
| Etr | Ongoing management (risk-adjusted) | $0 | $15,620 | $15,620 | $15,620 | |
| Three-year total: $46,860 | Three-year present value: $38,845 | |||||
Consolidated Three-Year, Risk-Adjusted Metrics
Cash Flow Chart (Risk-Adjusted)
Total costs Total benefits Cumulative net benefits Initial Year 1 Year 2 Year 3-
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.
Cash Flow Analysis (Risk-Adjusted Estimates)
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($54,538) | ($1,423,444) | ($1,578,553) | ($1,750,797) | ($4,807,333) | ($3,968,567) |
| Total benefits | $0 | $3,514,872 | $4,389,447 | $5,300,022 | $13,204,340 | $10,804,965 |
| Net benefits | ($54,538) | $2,091,428 | $2,810,893 | $3,549,224 | $8,397,008 | $6,836,398 |
| ROI | 172% | |||||
| Payback | <6 months | |||||
Appendix A: Total Economic Impact
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.
Total Economic Impact Approach
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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.
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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.
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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.
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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.
Appendix B: Endnotes
1 Source: The Forrester Tech Tide™: Smart Buildings, Q2 2024, Forrester Research, Inc., May 15, 2024.
2 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.
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