The Total Economic Impact™ Of Cutover Recover
Cost Savings And Business Benefits Enabled By Cutover Recover
A Forrester Total Economic Impact™ Study Commissioned By Cutover, October 2024
Disaster recovery, including cyber recovery, has become a strategic priority across enterprises due to the increasing frequency and severity of disruptions. However, many businesses lag in preparedness, with less than 40% feeling well prepared for a disaster.1 Automating and streamlining disaster recovery processes to recover applications is key to ensuring business continuity in the face of disruption and enhancing overall resiliency.
Cutover Recover, an IT disaster recovery (DR) solution, automates and streamlines disaster recovery processes with dynamic runbooks while keeping people in the process for decision-making. It enhances resilience by integrating recovery plans across cloud-native, hybrid, on-premises, and multicloud environments, ensuring regulatory compliance and minimizing downtime. Cutover also provides real-time visibility and coordination, enabling teams to execute recovery plans efficiently and effectively.
Cutover commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Cutover Recover.2 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Cutover Recover on their organizations.
Return on investment (ROI)
313%
Net present value (NPV)
$2.40M
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To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four representatives with experience using Cutover Recover. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a retail organization with 2 million customers and revenues of $1 billion per year.
Interviewees said that prior to using Cutover Recover, their organizations were unable to do large-scale failover tests; were limited in how many single-application IT DR tests they could run; were struggling to meet customers’ and regulators’ requirements; and had little confidence in their ability to execute during a live recovery. However, prior attempts to improve DR processes yielded limited success, leaving them with manual processes that were time-consuming to run, highly error-prone, and not repeatable. They lacked visibility into the progress and ownership of test execution and a clear audit trail. These limitations led to DR tests either not being run successfully or only addressing portions of the technology stack — or longer outages that affected their services.
After the investment in Cutover Recover, the interviewees were able to run more, larger-scale tests, have better visibility into and oversight of the tests, and execute them at lower risk, which built up their confidence to execute successfully. Key results from the investment included a reduction in planning and execution time for IT DR tests and an increase in audit and post-test analysis efficiency.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- A reduction in planning time for IT DR tests. The use of Cutover Recover reduces the planning time for IT DR tests by allowing employees involved in a disaster recovery effort to directly add their steps to the tool, enabling them to work simultaneously on the same runbook. This eliminates the need for excessive communication with the key IT DR team, as they can review everything in one place. The increased visibility that Cutover runbooks provide results in fewer preparation and planning meetings. Overall, this leads to recaptured productivity amounting to $188,000 over three years.
- A reduction in execution time of 50%. The use of Cutover Recover reduces the execution time of a DR effort by increasing visibility and enabling all employees involved to react more quickly. Communication time also decreases significantly, as users can easily share screenshots or grant access to the Cutover platform to senior stakeholders. With the process clearly outlined in the runbook and real-time updates, employees can accurately predict their task execution time, reducing their overall involvement. The time and cost savings amount to $3 million for the composite organization over three years.
- A reduction in audit and post-test analysis time of 80%. The use of Cutover Recover increases the efficiency of audit and post-test analysis for IT DR. The ability to pull a detailed read-only log of all activities during a test or event eliminates the need to collect data from multiple sources and increases trust and credibility with regulators. The availability of a chat log for each task within Cutover allows users to more easily review the notes related to any issues they encounter. Over three years, the composite organization recognizes savings of $31,000.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- Improved employee experience. The accuracy that Cutover Recover runbooks provide increases the predictability of when each employee needs to join and execute a task, reducing the time each employee needs to be involved during a test; this has a positive impact on their work/life balance.
- Increased credibility and trust. The improved execution of DR events and the transparent official reporting creates more credibility and trust in the DR team.
- Reduced complexity. The Cutover Recover platform is easy and intuitive to use, requiring only minimal training. The increased visibility increases accountability for tasks and improves collaboration.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Software subscription fees. Cutover Recover is priced per monthly active user. Users in this case are mainly technology professionals involved in IT disaster recovery. License fees for 400 users at the composite organization total $619,000 distributed over three years.
- Integration and license costs. Cutover integrates its solution with multiple different systems, including single-sign on (SSO), collaboration, IT service management (ITSM), and automation. The integration with SSO and the yearly license fees for the composite organization amount to $23,000 over three years.
- Implementation, onboarding, and ongoing management costs. The implementation of Cutover Recover requires efforts mostly in change management and creating runbooks in the platform; this takes three months. Ongoing management is minimal, as the platform is very user-friendly and intuitive to use. Implementation, onboarding, and ongoing management costs for the composite organization amount to $127,000 over three years.
The representative interviews and financial analysis found that a composite organization experiences benefits of $3.17 million over three years versus costs of $769,000, adding up to a net present value (NPV) of $2.4 million and an ROI of 313%.
Key Statistics
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Return on investment (ROI)
313%
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Benefits PV
$3.17M
-
Net present value (NPV)
$2.40M
-
Payback
<6 months
Benefits (Three-Year)
Reduction in planning time for IT DR test Improved IT DR test execution efficiency Increase in audit post-test analysis efficiency for IT DR tests
TEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Cutover Recover.
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 Cutover Recover can have on an organization.
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Due Diligence
Interviewed Cutover stakeholders and Forrester analysts to gather data relative to Cutover Recover.
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Interviews
Interviewed four representatives at organizations using Cutover Recover 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 Cutover 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 Cutover Recover.
Cutover 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.
Cutover provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Antonie Bassi
Elina Bauwens
Drivers leading to the Cutover Recover investment
Interviews
| Role | Industry | Region | Number of employees |
|---|---|---|---|
| Senior manager, infrastructure services — disaster recovery | Financial services | United States | 10,000 |
| Senior manager, BC and crisis management | Financial services | United Kingdom | 24,000 |
| Executive director, DR testing | Financial services | Global, United States headquarters | 80,000 |
| Head of IT service assurance | Financial services | United Kingdom | 18,000 |
Key Challenges
Before using Cutover Recover, the interviewees’ organizations faced significant challenges in their DR processes, including the inability to conduct comprehensive tests, meet regulatory requirements, and maintain confidence in their recovery capabilities. Manual, error-prone processes and a lack of visibility and accountability compounded these issues.
The interviewees noted how their organizations struggled with common challenges, including:
- The inability to conduct comprehensive DR tests. The interviewees’ organizations struggled to perform large-scale failover tests, which are crucial for ensuring that all systems can be effectively switched over during a disaster. Additionally, the number of single-application IT DR tests that they could run was restricted, hindering their ability to validate the recovery of individual applications. These limitations left them uncertain about their overall DR readiness and prevented thorough testing of each application’s recovery process.
- A lack of confidence in live recovery execution. The interviewees’ organizations had little confidence in their ability to execute DR plans during a live recovery scenario. This lack of confidence stemmed from the absence of comprehensive testing and reliable processes, increasing the risk of prolonged downtime and data loss.
- Manual, error-prone processes. Previous attempts to improve DR processes relied heavily on manual interventions, which were time-consuming and prone to error. These manual processes were difficult to replicate consistently, reducing the reliability of the DR plan.
- A lack of visibility, ownership, and audit trails. The interviewees’ organizations lacked visibility into the progress of their DR tests and clear ownership of the execution process, making it challenging to track the status of recovery efforts and identify issues in real time. The absence of a clear audit trail also meant there was no comprehensive record of actions they took during DR tests, making it difficult to review and improve their processes over time and leading to repeated mistakes and inefficiencies.
Solution Requirements
The interviewees’ organizations searched for a solution that could:
- Provide adherence to regulatory compliance and the capacity to conduct extensive testing on a worldwide scale, helping them meet stringent regulatory requirements and maintain customer trust.
- Increase the number of applications tested and expand the testing environment to keep pace with growing demands, ensuring that their DR capabilities could scale as their organizations grew.
- Streamline processes to minimize the time required for setting up and carrying out tests, enhancing overall productivity.
- Improve how DR events were managed with options for task automation, leading to more efficient operations, better visibility and control during tests, as well as a clear audit trail for reviewing and improving processes.
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 four 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 global financial services organization has revenues of $1 billion and employs 10,000 people worldwide. It conducts between five and 11 large-scale disaster recovery tests annually, and it tests 200 to 250 site applications to ensure robust IT resilience. The organization maintains a strong global presence, adhering to stringent regulatory requirements and customer scrutiny.
Deployment characteristics. The composite organization begins with five large-scale disaster recovery tests in Year 1 and scales up to 11 tests by Year 3. Over the same period, it expands its single-application testing from 200 to 250 applications, ensuring comprehensive coverage and enhanced resilience.
Quantified benefit data as applied to the composite
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Reduction in planning time for IT DR tests | $32,805 | $92,219 | $109,715 | $234,738 | $188,466 |
| Btr | Improved IT DR test execution efficiency | $911,250 | $1,253,880 | $1,450,710 | $3,615,840 | $2,954,613 |
| Ctr | Increase in audit and post-test analysis efficiency for IT DR tests | $7,873 | $12,612 | $17,350 | $37,835 | $30,616 |
| Total benefits (risk-adjusted) | $951,928 | $1,358,710 | $1,577,775 | $3,888,413 | $3,173,695 | |
Reduction In Planning Time For IT DR Tests
Evidence and data. Interviewees reported increased efficiency and consequent time savings for planning their IT DR efforts when using Cutover Recover. Key benefits in this phase included the following:
- Each employee involved in a DR effort was able to add their steps directly in the tool, allowing employees to all work simultaneously on the same runbook. This required less back and forth with the key IT DR team, which could review everything in one place.
- The increased visibility due to having each step of the recovery plan mapped out in one tool reduced the amount of preparation and number of planning meetings required.
- Interviewees who were using spreadsheets before implementing Cutover reported a reduction in the time spent on fixing mistakes and checking the accuracy of the latest document.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- For a large data center test, the composite requires one month of preparation time across the IT DR team in its previous environment.
- The composite organization performs five large-scale tests in Year 1; due to its increased confidence from the use of Cutover Recover, it is able to scale up its testing to eight tests in Year 2 and 11 in Year 3.
- For single-app testing, the composite organization requires, on average, 5 hours of planning time per test. It performs 200 application tests in Year 1 and increases testing to 250 apps in Year 2 and 3.
- The composite experiences a 25% reduction in time in Year 1 as it migrates its current process to the Cutover Recover runbooks; this reduction increases to 50% in Years 2 and 3 as the process becomes more established and repeatable.
Risks. The potential risks associated with this benefit are as follows:
- The amount of planning time per test can vary by organization size, complexity, and the scale of a large test.
- The number of tests can vary by organization.
- The average fully burdened salary for an IT employee can vary by organization.
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 $189,000.
Reduction In Planning Time For IT DR Tests
| Ref. | Metric | Calculation | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| A1 | Average planning time per large test (hours) | Interview data | 160 | 160 | 160 |
| A2 | Number of large tests | Interview data | 5 | 8 | 11 |
| A3 | Average planning time per single-app test (hours) | Interview data | 5 | 5 | 5 |
| A4 | Number of single-app tests | Interview data | 200 | 250 | 250 |
| A5 | Reduction in average planning time with Cutover Recover | Interview data | 25% | 50% | 50% |
| A6 | Subtotal: Total reduction in planning time (hours) | ((A1*A2)+(A3*A4)) *A5 | 450 | 1,265 | 1,505 |
| A7 | Fully burdened hourly rate for IT staff | TEI standard | $81 | $81 | $81 |
| At | Reduction in planning time for IT DR tests | A6*A7 | $36,450 | $102,465 | $121,905 |
| Risk adjustment | ↓10% | ||||
| Atr | Reduction in planning time for IT DR tests (risk-adjusted) | $32,805 | $92,219 | $109,715 | |
| Three-year total: $234,738 | Three-year present value: $188,466 | ||||
Improved IT DR Test Execution Efficiency
Evidence and data. Interviewees reported that their biggest efficiency savings with Cutover Recover occurred during the execution of a DR event and testing. The main benefits that interviewees reported were as follows:
- The recovery times for interviewees’ organizations improved, as all employees involved in a recovery effort have visibility into the progress and their involvement and can react more quickly when it’s their turn. The interviewees said the visibility created from the runbook also allows the IT DR teams to identify tasks and processes that they can carry out more quickly than employees might initially indicate.
- Interviewees said that they have also drastically reduced the time spent on communications. They indicated that they can quickly get a screenshot of the runbook to share with senior stakeholders or can grant them direct access to the Cutover Recover platform.
- Interviewees reported that with the process clearly set out in the runbook and real-time updates on where the process is, employees can more accurately predict the exact time they will need to execute their task, thus reducing their actual involvement time.
- Interviewees reported that if a mistake in the process comes up during a test or disaster event, they can pause the runbook, fix the mistake, and restart the runbook. They said it now takes them a couple of minutes to fix the issue; previously, it would take them at least 30 minutes. They also reported that spreadsheets used to be a lot more error-prone, leading to delays and bottlenecks during an event.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization performs five large-scale tests in Year 1; due to its increased confidence from the use of Cutover, it is able to scale up its testing to eight tests in Year 2 and 11 in Year 3.
- Each large test involves 80 employees spending 75% of their time on it during a 30-hour time frame.
- Each single-app test involves 10 employees spending 75% of their time on it during an 8-hour time frame.
- With Cutover Recover, the composite reduces this execution time by 50%.
Risks. The potential risks associated with this benefit are as follows:
- The number of tests can vary by organization.
- The number of employees involved in a test can vary by organization.
- The average fully burdened salary for an IT employee can vary by organization.
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 $2,950,000.
Improved IT DR Test Execution Efficiency
| Ref. | Metric | Calculation | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| B1 | Number of large tests | Interview data | 5 | 8 | 11 |
| B2 | Number of staff involved in large test | Interview data | 80 | 80 | 80 |
| B3 | Duration of large test (hours) | Interview data/ Staff involved for 75% of test duration | 30 | 30 | 30 |
| B4 | Number of single-app tests | Interview data | 200 | 250 | 250 |
| B5 | Number of staff involved in single-app testing | Interview data | 10 | 10 | 10 |
| B6 | Single-app test duration (hours) | Interview data | 8 | 8 | 8 |
| B7 | Reduction in average execution time per test with Cutover | Interview data | 50% | 50% | 50% |
| B8 | Subtotal: Total reduction in execution time with Cutover (hours) | (B1*B2*(B3*75%))+(B4*B5*B6))*B7 | 12,500 | 17,200 | 19,900 |
| B9 | Fully burdened hourly rate for IT staff | TEI standard | $81 | $81 | $81 |
| Bt | Improved IT DR test execution efficiency with Cutover | B8*B9 | $1,012,500 | $1,393,200 | $1,611,900 |
| Risk adjustment | ↓10% | ||||
| Btr | Reduction in test execution (risk-adjusted) | $911,250 | $1,253,880 | $1,450,710 | |
| Three-year total: $3,615,840 | Three-year present value: $2,954,613 | ||||
Increase In Audit And Post-Test Analysis Efficiency For IT DR Tests
Evidence and data. The interviewees’ organizations were all in the highly regulated financial services industry, where most tests were being audited either internally or externally. They would also complete detailed post-test analyses to understand what worked well and where they could improve ahead of the next test. The main benefits that interviewees reported with Cutover Recover were as follows:
- The ability to pull a detailed read-only log of all the activities during a test instead of having to collect the data from various sources and interview people.
- The availability of chat logs for each task within Cutover, so they could easily go through all the notes linked to each task where they ran into issues.
- The ability to share post-event data more easily with other departments internally.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization performs five large-scale tests in Year 1; due to its increased confidence from the use of Cutover, it is able to scale up its testing to eight tests in Year 2 and 11 in Year 3.
- Each large test requires 15 hours of audit preparation prior to the investment in Cutover Recover.
- The composite spends 12 hours on post-test analysis per large test prior to the investment in Cutover Recover.
- The composite reduces the time spent on audit and post-test analysis by 80% by using Cutover Recover.
Risks. The potential risks associated with this benefit are as follows:
- Audit frequency may vary based on an organization’s industry, geographic presence, regulatory requirements, and culture.
- The number of tests can vary by organization.
- The number of employees involved in the audit process and post-test analysis can vary by organization.
- The average fully burdened salary for an IT employee can vary by organization.
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 $31,000.
Increase In Audit And Post-Test Analysis Efficiency For IT DR Tests
| Ref. | Metric | Calculation | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| C1 | Number of large tests | Interview data | 5 | 8 | 11 |
| C2 | Time spent on audit per large test (hours) | Interview data | 15 | 15 | 15 |
| C3 | Time spent on post-test analysis per large test (hours) | Interview data | 12 | 12 | 12 |
| C4 | Reduction in average audit prep and post-test analysis with Cutover | Interview data | 80% | 80% | 80% |
| C5 | Subtotal: Total reduction in audit and post-test analysis with Cutover (hours) | ((C1*C2)+ (C1*C3)) *C4 | 108 | 173 | 238 |
| C6 | Fully burdened hourly rate for IT staff | TEI standard | $81 | $81 | $81 |
| Ct | Increase in audit and post-test analysis efficiency for IT DR tests with Cutover | C5*C6 | $8,748 | $14,013 | $19,278 |
| Risk adjustment | ↓10% | ||||
| Ctr | Increase in audit and post-test analysis efficiency increase for IT DR tests with Cutover (risk-adjusted) | $7,873 | $12,612 | $17,350 | |
| Three-year total: $37,835 | Three-year present value: $30,616 | ||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- Improved employee experience. Interviewees shared that their employees’ work/life balance improved because they no longer need to wait on a bridge and can better predict when they need to join and when they will finish. They also noted that using the runbooks increases employees’ confidence about test execution success, reducing stress.
- Increased credibility and trust. Interviewees said that the improved execution of DR events and transparent official reporting has created more credibility for and trust in their DR teams. They said this also ensures greater peace of mind for IT DR teams during audits.
- Reduced complexity. The interviewees noted that the Cutover platform is easy and intuitive to use, requiring only minimal training and onboarding for new teams. They said that this increased visibility increases accountability for the tasks and improves collaboration, especially in complicated recovery scenarios like cyber attacks.
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Cutover Recover and later realize additional uses and business opportunities, including:
- Additional use cases across IT. Several of the interviewees said their organizations are also using Cutover with other IT teams to orchestrate complex changes that involve a lot of tasks, such as cloud migrations, application release management, data center migrations, and application migrations.
- Event and change management. One of the interviewees said their organization also uses Cutover to manage large-scale change programs across their company, including in human resources and legal departments.
- Future automation capabilities. Although the interviewees said their organizations had not yet been able to leverage Cutover’s automation capabilities, most of them had plans to enable this functionality in the future.
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 |
|---|---|---|---|---|---|---|---|
| Dtr | Software subscription fees | $0 | $189,000 | $283,500 | $283,500 | $756,000 | $619,113 |
| Etr | Integration and license costs | $6,563 | $6,563 | $6,563 | $6,563 | $26,250 | $22,882 |
| Ftr | Implementation, onboarding and ongoing management costs | $68,429 | $17,820 | $26,730 | $26,730 | $139,709 | $126,802 |
| Total costs (risk-adjusted) | $74,991 | $213,383 | $316,793 | $316,793 | $921,959 | $768,797 | |
Software Subscription Fees
Evidence and data. Cutover Recover is priced per monthly active user. Users in this case are mainly technology professionals involved in IT disaster recovery.
Modeling and assumptions. Forrester estimates that the composite organization has 100 monthly active users during Year 1; this increases to 150 users in Years 2 and 3.
Risks. This cost may vary among organizations based on the size of the Cutover contract, the organization’s region, the type of organization, and changes over time.
Results. To account for these risks, Forrester adjusted this cost upward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $619,000.
Software Subscription Fees
| Ref. | Metric | Calculation | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| D1 | License fee per user | Composite | $1,800 | $1,800 | $1,800 | ||
| D2 | Number of users | Composite | 100 | 150 | 150 | ||
| Dt | Software subscription fees | D1*D2 | $0 | $180,000 | $270,000 | $270,000 | |
| Risk adjustment | ↑5% | ||||||
| Dtr | Software subscription fees (risk-adjusted) | $0 | $189,000 | $283,500 | $283,500 | ||
| Three-year total: $756,000 | Three-year present value: $619,113 | ||||||
Integration And License Costs
Evidence and data. Cutover offers the option to integrate its IT disaster recovery solution with multiple different systems, including single sign-on (SSO), collaboration, IT service management, and automation. The interviewees’ organizations had:
- Integrated with single sign-on.
- Looked to integrate with other systems but had not yet done this, mainly due to the complexity of their own technology environments.
Modeling and assumptions. Forrester assumes that the composite organization will integrate Cutover Recover with single sign-on from the beginning of the partnership.
Risks. The effort and cost of integration will vary depending on an organization’s IT landscape, security architecture restrictions, and changes over time.
Results. To account for these risks, Forrester adjusted this cost upward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $23,000.
Integration And License Costs
| Ref. | Metric | Calculation | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| E1 | SSO integration cost | Composite | $6,250 | $0 | $0 | $0 | |
| E2 | SSO yearly license fees | Composite | $0 | $6,250 | $6,250 | $6,250 | |
| Et | Integration and license costs | G1 | $6,250 | $6,250 | $6,250 | $6,250 | |
| Risk adjustment | ↑5% | ||||||
| Etr | Integration and license costs (risk-adjusted) | $6,563 | $6,563 | $6,563 | $6,563 | ||
| Three-year total: $26,250 | Three-year present value: $22,882 | ||||||
Implementation, Onboarding, And Ongoing Management Costs
Evidence and data. The interviewees found the implementation to be relatively straightforward; any challenges that occurred were largely due to the complexity of their own IT landscapes. Cutover provided assistance in uploading runbooks into the tool and training the staff on the platform. Some of the interviewees said their organizations created internal Cutover champions to support internal staff with ongoing training and upskilling. Some interviewees also mentioned that employees had to review training videos periodically to remain familiar with the platform.
Modeling and assumptions. Forrester estimates that the composite organization’s implementation, onboarding, and ongoing management includes:
- Two people dedicating 80% of their time for three months.
- Two hours of training for each user.
Risks. The cost of implementation, onboarding, and ongoing management will vary with the complexity of an organization’s IT landscape and security architecture guidelines as well as the number of internal stakeholders involved in implementation, onboarding and ongoing management, the amount of time they commit, and their fully burdened hourly rates.
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 $127,000.
Implementation, Onboarding, And Ongoing Management Costs
| Ref. | Metric | Calculation | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| F1 | Number of employees | Composite | 2 | 100 | 150 | 150 | |
| F2 | Fully burdened hourly rate per employee | TEI standard | $81 | $81 | $81 | $81 | |
| F3 | Subtotal: Solution implementation (hours) | 3 months * 80% | 384 | ||||
| F4 | Average time spent on ongoing training (hours) | Interview data | 2 | 2 | 2 | ||
| F5 | Subtotal: Total cost of training | F1*F2*F4 | $16,200 | $24,300 | $24,300 | ||
| Ft | Implementation, onboarding, and ongoing management costs | F1*F2*F3 | $62,208 | $16,200 | $24,300 | $24,300 | |
| Risk adjustment | ↑10% | ||||||
| Ftr | Implementation, onboarding, and ongoing management costs (risk-adjusted) | $68,429 | $17,820 | $26,730 | $26,730 | ||
| Three-year total: $139,709 | Three-year present value: $126,802 | ||||||
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 | ($74,991) | ($213,383) | ($316,793) | ($316,793) | ($921,959) | ($768,797) |
| Total benefits | $0 | $951,928 | $1,358,710 | $1,577,775 | $3,888,413 | $3,173,695 |
| Net benefits | ($74,991) | $738,546 | $1,041,918 | $1,260,982 | $2,966,454 | $2,404,898 |
| ROI | 313% | |||||
| Payback period (months) | <6 | |||||
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 State Of Disaster Recovery Preparedness In 2024, Forrester Research, Inc., January 12, 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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