Within the education sector, AI improves internal service delivery across institutions by streamlining administration and empowering educators with best-in-class content. Putting AI in the hands of students improves communication and engagement and can result in better education outcomes, such as higher graduation and employment rates.
Microsoft commissioned Forrester Consulting to interview 20 representatives at 16 organizations and conduct a Total Economic Impact™ (TEI) study to better understand the benefits, costs, and risks associated with the investment in Microsoft Azure OpenAI Service.1 In the full TEI study, Forrester found that an industry-agnostic composite organization would see risk-adjusted financial benefits ranging between $45.9 million and $197.4 million over three years.
This abstract will focus on the education sector’s use of Azure OpenAI Service and its value to their organizations. As part of the broader TEI study, Forrester interviewed representatives from two education organizations:
Projected efficiency gain in content generation by Year 3*
10% to 60%
*For the composite organization presented in the full TEI study
Prior to using Azure OpenAI Service, the interviewees noted their education organizations relied on teachers and staff to manually create and manage materials and plans as well as to provide administrative support. Any digital support offered to students was general and, therefore, not tailored to the student or their needs. The interviewees’ organizations wanted to invest in technology to make education and the related services more accessible to students and more attractive to educators, driving improved educational outcomes and teacher satisfaction.
Azure OpenAI Service enables organizations to develop custom AI applications that use Microsoft’s underlying AI infrastructure. This strategy enables AI to impact as many applications, business processes, and employees as possible while still being accessible and manageable for AI developers. The interviewees’ education organizations used Azure OpenAI Service to build AI solutions to meet their specific needs in the following ways:
Projected improvement in chatbot resolution rate by Year 3*
10% to 50%
*For the composite organization presented in the full TEI study
Prior to adopting Azure OpenAI Service, the interviewees faced various challenges in their legacy environments, including:
“Making lesson plans from scratch takes twice the amount of time it takes to teach it.”
Head of AI, global department of education
The interviewees’ organizations adopted Azure OpenAI Service to provide better experiences for students and teachers alike by:
The results of the investment for the interviewees' organizations include:
Expanded service accessibility. Interviewees at education organizations projected that their use of Azure OpenAI Service would prove critical in improving key education outcomes, such as graduation rates and employment rates, attracting both more students and, therefore, more investment.
“We use an Azure OpenAI Service tool to allow students to do mock interviews for different employers and different personality types. After, the tool tells you how you did, what went well, and what you need to improve.”
CIO, higher education
The head of AI at a department of education organization described similar drivers behind establishing an AI tutor for their students, which had the potential to reduce socioeconomic gaps in educational outcomes: “Between 25% to 30% of our students come from lower income families with parents who didn’t finish high school. When they get home with homework, their parents may not be there to help them. The tool serves as a tutor and the goal is to measure improvements in educational outcomes.”
“If students have a quiz tomorrow, they can use the AI tool to generate mock quizzes to prepare them. The tools are based on internal lesson data, so it cannot hallucinate.”
CIO, higher education
Increased operational efficiencies. Azure OpenAI Service expedited internal processes and automated certain tasks to provide operational efficiencies in a few different areas, including customer support and content creation.
Improved service delivery. With Azure OpenAI Service, the interviewees improve both teacher and student experiences. Students gained more access to the educational materials that they needed, whereas teachers spent less time on administrative prep work and more time in the classroom.
“Our goal is to have 80% of student queries done through self-service.”
CIO, higher education
For more information, download the full study: “The Projected Total Economic Impact™ Of Azure OpenAI Service In Reinventing Customer And Constituent Engagement,” a commissioned study conducted by Forrester Consulting on behalf of Microsoft, July 2024.
While the value story above is based on two interviews, Forrester interviewed 20 total representatives at 16 organizations with experience using Microsoft Azure OpenAI Service and combined the results into a three-year financial analysis for a composite organization. Projected quantified benefits include:
Readers should be aware of the following:
This study is commissioned by Microsoft 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 Microsoft Azure OpenAI Service.
Microsoft 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.
Microsoft provided the customer names for the interviews but did not participate in the interviews.
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 Source: Generative AI Brings Superpowers To Portfolio Marketers, Forrester Research, Inc., March 5, 2024.
Forrester provides independent and objective research-based consulting to help leaders deliver key transformation outcomes. Fueled by our customer-obsessed research, Forrester’s seasoned consultants partner with leaders to execute on their priorities using a unique engagement model that tailors to diverse needs and ensures lasting impact. For more information, visit forrester.com/consulting.
© Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies.
Cookie Preferences
Accept Cookies
Decline
Close
This website uses cookies to deliver functionality and enhance your experience. GDPR requires that we obtain your consent before activating these cookies. Please accept the use of cookies or review your cookie settings now.
A cookie is a small text file that a website saves on your computer or mobile device when you visit the site. It enables the website to remember your actions (data inputs, website navigation), so you don’t have to re-enter data when you come back to the site or browse from one page to another.
Behavioral information collected by our web analytics vendor is used to analyze data pertaining to visitor trends, plan website enhancements, and measure overall website effectiveness. We may also use cookies or web beacons to help us offer you products, programs, or services that may be of interest to you and to deliver relevant advertising. We may use third-party advertising companies to help tailor website content to users or to serve ads on our behalf. These companies may also employ cookies and web beacons to measure advertising effectiveness.
Please accept cookies and the collection of behavioral information to receive full functionality and enhance your experience. If you decline cookies, some features of the website may not function normally.
Please see our
Privacy Policy for more information.