A Forrester Total Economic Impact™ Study Commissioned By SimCorp, September 2024
Many large investment management organizations run their front-, middle-, and back-office operations using a mix of multiple platforms added over time, custom-built solutions, manual processes, and/or tailored integrations. Such approaches impose a significant burden on operational teams from differing workflows, and specialist training requirements to data extraction and costly reconciliation and maintenance efforts. To address these challenges within the buy side, SimCorp offers a fully integrated, front-to-back investment management platform anchored by a unified data layer across all asset classes. This can significantly improve operational efficiency and productivity, accelerate time to market, facilitate compliance, and enable better investment decision-making.
SimCorp One provides a scalable and integrated end-to-end investment management platform and services that streamline workflows throughout the investment value chain. It can empower users from across the company with a transparent and real-time total portfolio view across all assets — both public and private — to help them make decisions with speed and precision. By delivering clarity and confidence, SimCorp One enables clients to focus on their core business and make better, more timely investment decisions while simplifying operations, optimizing costs, and improving efficiency.
SimCorp commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) the buy side may realize with SimCorp One.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact on their organizations.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed five representatives with experience using SimCorp. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a global investment management organization with $150 billion in assets under management (AuM).
is an investment management organization with approximately in assets under management and front-, middle-, and back-office business users. Custom results are based on user inputs and the TEI case study.
Return on investment (ROI)
TCO reduction Year 3
Improved operational efficiencies
Payback (from initial implementation)
The interviewees said that before adopting SimCorp One, their organizations relied on legacy providers for back- and middle-office solutions and used various tools and spreadsheets for front-office activities. However, most of those prior solutions were outdated and required heavy manual interactions. This led to painful reconciliation and reporting processes, time-consuming daily manual data checks, lack of data quality, and poor data access. Ultimately, this meant decisions were based on obsolete data, and there was a need for extensive maintenance efforts across multiple systems and integrations.
Following their investments in SimCorp’s end-to-end investment platform, the interviewees’ organizations improved operational efficiency and reduced remediation efforts by eliminating manual processes along with multiple interfaces and workflows while saving on infrastructure and maintenance costs. Furthermore, user productivity and business agility improved, and time to market for new portfolios, regions, and other capabilities accelerated. Also, having access to real-time data enabled the organizations to improve their cash management.
Total cost of ownership. The total cost of ownership (TCO) is much lower with SimCorp One investment compared to the prior state (or doing nothing) as shown in the chart below. The composite organization experiences robust growth during the three period, but is able to keep costs down.
The following chart shows custom results for .
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
For , this benefit might be worth over three years.
For , this benefit might be worth over three years.
For , this benefit might be worth over three years.
For , this benefit might be worth over three years.
For , this benefit might be worth over three years.
For , this benefit might be worth over three years.
Flexibility. Flexibility-related 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 , these costs could represent over three years. Please note that these subscription fees are based on high-level estimates and do not constitute a quote. For more details, please contact SimCorp.
For , these costs could represent over three years.
For , these costs could represent over three years.
The representative interviews and financial analysis found that a composite organization experiences benefits of $32.75 million over three years versus costs of $14.00 million, adding up to a net present value (NPV) of $18.76 million and an ROI of 134%.
might experience benefits of over three years versus costs of , adding up to an NPV of and an ROI of 0%.
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in SimCorp One.
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 SimCorp One can have on an organization.
Interviewed SimCorp stakeholders and Forrester analysts to gather data relative to SimCorp One.
Interviewed five representatives at organizations using SimCorp One 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 SimCorp 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 SimCorp One. For the interactive functionality using Configure Data/Custom Data, the intent is for the questions to solicit inputs specific to a prospect's business. Forrester believes that this analysis is representative of what companies may achieve with such a platform based on the inputs provided and any assumptions made. Forrester does not endorse SimCorp or its offerings. Although great care has been taken to ensure the accuracy and completeness of this model, SimCorp and Forrester Research are unable to accept any legal responsibility for any actions taken on the basis of the information contained herein. The interactive tool is provided ‘AS IS,’ and Forrester and SimCorp make no warranties of any kind.
SimCorp 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.
SimCorp provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Jan Sythoff
Corrado Loreto
Role | Industry | Headquarters location | Assets under management |
---|---|---|---|
Head of operations | Investment management (wealth management) | Switzerland | $310B |
Portfolio manager | Investment management (advisory, broking, and solutions) | United Kingdom | $136B |
Head of investment control and analytics | Investment management (investment banking) | Norway | $114B |
Chief executive officer | Investment management | Australia | $73B |
Investment accounting supervisor | Investment management (pension fund) | United States | $48B |
The organizations interviewed struggled with the time and effort required to reconcile data from multiple systems and processes across front-, middle-, and back-office teams. Legacy solutions, custom-built approaches, and manual processes involving spreadsheets required operational teams to devote significant time and resources to managing portfolios, maintaining and reconciling data, and adhering to compliance requirements as well as accounting, record keeping, and performance monitoring. Furthermore, their legacy solutions did not support all asset classes, requiring manual efforts and workarounds to build a full view of portfolio positions. This also meant that front-office staff could not count on up-to-date views of their complete investment portfolios to support their investment decisions.
In the face of such a fragmented view, interviewees’ organizations were looking for a flexible and scalable investment management system that supports all assets to provide portfolio managers with a real-time total portfolio view. Only then could they truly focus on the investment process instead of manually maintaining spreadsheets and reconciling data from multiple sources.
The interviewees noted how their organizations struggled with common challenges, including:
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the financially affected areas. 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 investment management company with $150 billion in assets under management. It offers a range of investment services, including insurance and wealth management, with substantial capital market activities across multiple assets, geographies, and portfolios. This organization is planning for robust growth by adding new assets, regions, and portfolios during the three-year modeled period. There are 100 business users, of which 60 are back- and middle-office-based and 40 are front-office-based. The composite relies on one legacy platform for back- and middle-office operations as well as two legacy platforms combined with various manual, spreadsheet-based processes to support the front-office.
is an investment management organization with approximately in assets under management and front-, middle-, and back-office business users.
Deployment characteristics. The composite deploys SimCorp One’s back- and middle-office capabilities initially and then adds the front-office module in Year 1 to gain a real-time total portfolio view. Its AuM grows substantially in years 2 and 3, and the organization implements SimCorp One on a software-as-a-service (SaaS) basis.
Total cost of ownership. The composite reduces the total cost of ownership (i.e., the total people and technology costs) by investing into SimCorp One. The below analysis excludes all project costs including implementation costs.
The following table shows custom results for .
Cost category | Year 1 | Year 2 | Year 3 |
---|---|---|---|
People costs (prior state/do nothing) | $19,387,500$19,387,500 | $21,046,875$21,046,875 | $22,706,250$22,706,250 |
Technology costs (prior state/ do nothing) | $2,550,000$2,550,000 | $3,187,500$3,187,500 | $3,825,000$3,825,000 |
Total prior state/do nothing costs | $21,937,500$21,937,500 | $24,234,375$24,234,375 | $26,531,250$26,531,250 |
People costs (SimCorp One) | $15,375,000$15,375,000 | $15,525,000$15,525,000 | $15,675,000$15,675,000 |
Technology costs (SimCorp One) | $4,587,500$4,587,500 | $4,462,500$4,462,500 | $4,462,500$4,462,500 |
Total SimCorp One costs | $20,702,500$20,702,500 | $20,460,000$20,460,000 | $20,610,000$20,610,000 |
Cost reduction with SimCorp One | 5.6%5.6% | 15.6%15.6% | 22.3%22.3% |
In the prior state/do nothing case, the people costs include the total operational costs (for 125 FTEs in Year 1, 135 in Year 2, and 145 in Year 3) and the maintenance costs of the previous technology setup. The technology costs are the vendor fees for the three legacy platforms (across front-, middle- and back-office).With SimCorp One, the people costs include the operational costs for 100 FTEs along with the maintenance costs; the two legacy front-office platforms also incur maintenance costs in Year 1 (and are subsequently removed in Year 2). The technology costs include the fees for SimCorp One but also the legacy fees for the two platforms that remain in Year 1.
As shown in the final row, the total cost of ownership is 5.6% lower in Year 1, and it grows to 15.6% in Year 2 and to 22.3% in Year 3. This shows that over the three year period, when the composite experiences robust growth, it is able to reduce TCO.
The following table shows custom results for .
Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|
Atr | Operational efficiency | $3,375,000 $3,375,000 | $4,725,000 $4,725,000 | $6,075,000 $6,075,000 | $14,175,000 $14,175,000 | $11,537,378 $11,537,378 |
Btr | Legacy tool cost avoidance | $1,062,500 $1,062,500 | $3,984,375 $3,984,375 | $4,781,250 $4,781,250 | $9,828,125 $9,828,125 | $7,851,005 $7,851,005 |
Ctr | Improved business user productivity | $2,025,000 $2,025,000 | $3,375,000 $3,375,000 | $3,375,000 $3,375,000 | $8,775,000 $8,775,000 | $7,165,853 $7,165,853 |
Dtr | Faster time to market | $0 $0 | $3,493,151 $3,493,151 | $4,191,781 $4,191,781 | $7,684,932 $7,684,932 | $6,036,248 $6,036,248 |
Etr | Reduced noncompliance costs | $21,635 $21,635 | $43,269 $43,269 | $43,269 $43,269 | $108,173 $108,173 | $87,936 $87,936 |
Ftr | Improved cash management | $29,589 $29,589 | $29,589 $29,589 | $29,589 $29,589 | $88,767 $88,767 | $73,584 $73,584 |
Total benefits (risk-adjusted) | $6,513,724 $6,513,724 | $15,650,384 $15,650,384 | $18,495,889 $18,495,889 | $40,659,996 $40,659,996 | $32,752,004 $32,752,004 | |
Evidence and data. Interviewees said the biggest benefit of SimCorp One is the increased efficiency of operations. Prior to the investment, their organizations typically used multiple systems, whether across different asset types and/or in different parts of their operations. Typically, there was one system for accounting and compliance (middle and back office) and several for the front-office; the latter often also involved custom-built capabilities and/or manual processes. Furthermore, this setup could not readily be used across all asset types, requiring additional work to build a full picture across all portfolios. As a result, operational staff spent a lot of time and effort reconciling data across different systems. In cases where not all asset classes were covered by the system, additional workarounds had to be built, typically using spreadsheets and manual processes.
Interviewees said that by implementing a system that covers all assets and that is fully front-to-back, staff across the business can rely on a unified data layer. They no longer need to access multiple systems or spend time reconciling data.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The impact of this benefit may vary depending on the following:
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 $11.5 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|
A1 | Baseline operational FTEs | CompositeComposite | 100100 | 100100 | 100100 | |
A2 | Percentage of new operational FTEs avoided | CompositeTEI case study | 25%25% | 35%35% | 45%45% | |
A3 | Operational FTE growth avoided | A1*A2 | 2525 | 3535 | 4545 | |
A4 | Average salary for an operational FTE | TEI standardTEI standard | $150,000 $150,000 | $150,000 $150,000 | $150,000 $150,000 | |
At | Operational efficiency | A3*A4 | $3,750,000 $3,750,000 | $5,250,000 $5,250,000 | $6,750,000 $6,750,000 | |
Risk adjustment | ↓10% | |||||
Atr | Operational efficiency (risk-adjusted) | $3,375,000 $3,375,000 | $4,725,000 $4,725,000 | $6,075,000 $6,075,000 | ||
Three-year total: $14,175,000 $14,175,000 | Three-year present value: $11,537,378 $11,537,378 |
Evidence and data. Interviewees said SimCorp One replaced existing legacy systems, which delivered cost avoidance benefits. These systems included platforms and tools, custom builds, manual processes, and integrations across different systems as well as the associated maintenance.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The impact of this benefit may vary depending on the following:
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $7.9 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|
B1 | Legacy tools replaced | CompositeScaled for | 11 | 33 | 33 | |
B2 | Average legacy tool fees | AssumptionScaled for | $1,000,000 $1,000,000 | $1,250,000 $1,250,000 | $1,500,000 $1,500,000 | |
B3 | Total legacy tool fees avoided | B1*B2 | $1,000,000 $1,000,000 | $3,750,000 $3,750,000 | $4,500,000 $4,500,000 | |
B4 | Legacy tool maintenance costs | CompositeScaled for | $250,000 $250,000 | $937,500 $937,500 | $1,125,000 $1,125,000 | |
Bt | Legacy tool cost avoidance | B3+B4 | $1,250,000 $1,250,000 | $4,687,500 $4,687,500 | $5,625,000 $5,625,000 | |
Risk adjustment | ↓15% | |||||
Btr | Legacy tool cost avoidance (risk-adjusted) | $1,062,500 $1,062,500 | $3,984,375 $3,984,375 | $4,781,250 $4,781,250 | ||
Three-year total: $9,828,125 $9,828,125 | Three-year present value: $7,851,005 $7,851,005 |
Evidence and data. Interviewees said that in addition to experiencing operational efficiencies, their organizations’ operational staff productivity also increased.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The impact of this benefit may vary depending on the following:
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 $7.2 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|
C1 | Business users impacted | CompositeComposite | 100100 | 100100 | 100100 | |
C2 | Front-office business users impacted | CompositeScaled for | 00 | 4040 | 4040 | |
C3 | Middle- and back-office business users impacted | CompositeScaled for | 6060 | 6060 | 6060 | |
C4 | Average weekly time saved per user (hours) | Interviews | 1010 | 1010 | 1010 | |
C5 | Total time saved by front-office staff (hours) | C2*C4*52 | 00 | 20,80020,800 | 20,80020,800 | |
C6 | Total time saved by middle-/back-office staff (hours) | C3*C4*52 | 31,20031,200 | 31,20031,200 | 31,20031,200 | |
C7 | Average hourly rate for a business user | TEI standardTEI standard | $72 $72 | $72 $72 | $72 $72 | |
Ct | Improved business user productivity | (C5+C6)*C7 | $2,250,000 $2,250,000 | $3,750,000 $3,750,000 | $3,750,000 $3,750,000 | |
Risk adjustment | ↓10% | |||||
Ctr | Improved business user productivity (risk-adjusted) | $2,025,000 $2,025,000 | $3,375,000 $3,375,000 | $3,375,000 $3,375,000 | ||
Three-year total: $8,775,000 $8,775,000 | Three-year present value: $7,165,853 $7,165,853 |
Evidence and data. Interviewees highlighted that by implementing SimCorp front-to-back, their organizations were able to make system changes much more easily and quickly. They said it’s much easier and faster to add new portfolios, funds, regions, or other capabilities to a single integrated platform than having to make changes across disparate systems comprised of different vendor platforms, custom-built approaches, manual processes, and tailored integrations. Furthermore, they said investment organizations may need to exit certain assets, portfolios, or regions, and that being able to do this more quickly is another benefit of moving to SimCorp One.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The impact of this benefit may vary depending on the following:
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $6.0 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|
D1 | Setup expansions | CompositeTEI case study | 00 | 11 | 11 | |
D2 | Average reduction in market entry time (days) | Interviews | 00 | 5050 | 6060 | |
D3 | AuM increase | CompositeScaled for | $0 $0 | $15,000,000,000 $15,000,000,000 | $15,000,000,000 $15,000,000,000 | |
D4 | Incremental returns from earlier market entry | D1*(D2/365)*D3* 2% | $0 $0 | $41,095,890 $41,095,890 | $49,315,068 $49,315,068 | |
D5 | Profit margin | TEI standard | 10%10% | 10%10% | 10%10% | |
Dt | Faster time to market | D4*D5 | $0 $0 | $4,109,589 $4,109,589 | $4,931,507 $4,931,507 | |
Risk adjustment | ↓15% | |||||
Dtr | Faster time to market (risk-adjusted) | $0 $0 | $3,493,151 $3,493,151 | $4,191,781 $4,191,781 | ||
Three-year total: $7,684,932 $7,684,932 | Three-year present value: $6,036,248 $6,036,248 |
Evidence and data. Some of the interviewees shared that their organizations improved benefits related to compliance.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The impact of this benefit may vary depending on the following:
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 $88,000.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|
E1 | Compliance events avoided (MRAs) | CompositeScaled for | 1010 | 2020 | 2020 |
E2 | Average remediation effort per compliance event (hours) | Assumption | 4040 | 4040 | 4040 |
E3 | Total compliance remediation time avoided (hours) | E1*E2 | 400400 | 800800 | 800800 |
E4 | Average hourly rate for a compliance specialist | TEI standardScaled for | $60 $60 | $60 $60 | $60 $60 |
Et | Reduced noncompliance costs | E3*E4 | $24,038 $24,038 | $48,077 $48,077 | $48,077 $48,077 |
Risk adjustment | ↓10% | ||||
Etr | Reduced noncompliance costs (risk-adjusted) | $21,635 $21,635 | $43,269 $43,269 | $43,269 $43,269 | |
Three-year total: $108,173 $108,173 | Three-year present value: $87,936 $87,936 |
Evidence and data. Interviewees said effective cash management is part of the core business of investment management organizations. For example, when ensuring a pension fund’s member liabilities are covered or an investment manager is raising cash to cover a rights call, they need accurate information on current holdings, cash positions, and cash forecasts. By having a unified data layer and providing accurate position, cash, and cash forecast data, investment managers can ensure they have cash available when needed and that they are not over-reliant on holding a large cash buffer, which delivers no returns.
The investment accounting supervisor in investment management (pension fund) explained: “Let’s say next Thursday, we’re going to need $120 million. That used to take an hour. Now, it takes less than 15 minutes. So, accounting no longer has to decide on selling something to make cash available. It’s trading. It’s their expertise.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The impact of this benefit could be lower for an organization like the benefit because their cash requirements could be lower and/ or less frequent.
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 $74,000.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|
F1 | Average cash impacted | InterviewsScaled for | $300,000,000 $300,000,000 | $300,000,000 $300,000,000 | $300,000,000 $300,000,000 | |
F2 | Reduction in time funds need to be liquidated to cash (days) | CompositeTEI case study | 2020 | 2020 | 2020 | |
F3 | Incremental revenue from improved cash management | F1*(F2/365)*2% | $328,767 $328,767 | $328,767 $328,767 | $328,767 $328,767 | |
F4 | Profit margin | CompositeComposite | 10%10% | 10%10% | 10%10% | |
Ft | Improved cash management | F3*F4 | $32,877 $32,877 | $32,877 $32,877 | $32,877 $32,877 | |
Risk adjustment | ↓10% | |||||
Ftr | Improved cash management (risk-adjusted) | $29,589 $29,589 | $29,589 $29,589 | $29,589 $29,589 | ||
Three-year total: $88,767 $88,767 | Three-year present value: $73,584 $73,584 |
Interviewees mentioned the following additional flexibility-related benefits that their organizations experienced but were not able to quantify:
The following table shows custom results for .
Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|---|
Gtr | SimCorp One subscription fees | $0 $0 | $2,887,500 $2,887,500 | $4,462,500 $4,462,500 | $4,462,500 $4,462,500 | $11,812,500 $11,812,500 | $9,665,759 $9,665,759 |
Htr | Implementation costs | $2,520,833 $2,520,833 | $852,500 $852,500 | $0 $0 | $0 $0 | $3,373,333 $3,373,333 | $3,295,833 $3,295,833 |
Itr | Maintenance and support costs | $0 $0 | $315,000 $315,000 | $472,500 $472,500 | $472,500 $472,500 | $1,260,000 $1,260,000 | $1,031,856 $1,031,856 |
Total costs (risk-adjusted) | $2,520,833 $2,520,833 | $4,055,000 $4,055,000 | $4,935,000 $4,935,000 | $4,935,000 $4,935,000 | $16,445,833 $16,445,833 | $13,993,448 $13,993,448 | |
Evidence and data. Interviewees said their organizations pay SimCorp One subscription fees on an annual basis. These were driven by the components used, the number of users, the volume of data, and the associated level of support.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The impact of this cost may vary depending on:
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 $9.7 million.
For , these costs may have a three-year, risk-adjusted total PV of . Please note that these subscription fees are based on high-level estimates and do not constitute a quote. For more details, please contact SimCorp.
The following table shows custom results for .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
G1 | SimCorp One platform subscription fees | InterviewsScaled for | $0 $0 | $2,750,000 $2,750,000 | $2,750,000 $2,750,000 | $2,750,000 $2,750,000 | |
G2 | Front-office module cost | InterviewsScaled for | $0 $0 | $0 $0 | $1,500,000 $1,500,000 | $1,500,000 $1,500,000 | |
Gt | SimCorp subscription fees | G1+G2 | $0 $0 | $2,750,000 $2,750,000 | $4,250,000 $4,250,000 | $4,250,000 $4,250,000 | |
Risk adjustment | ↑5% | ||||||
Gtr | SimCorp subscription fees (risk-adjusted) | $0 $0 | $2,887,500 $2,887,500 | $4,462,500 $4,462,500 | $4,462,500 $4,462,500 | ||
Three-year total: $11,812,500 $11,812,500 | Three-year present value: $9,665,759 $9,665,759 |
Evidence and data. Interviewees shared that there were costs associated with the implementation of SimCorp One.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The impact of this cost may vary due to the following:
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 $3.3 million.
For , these costs may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
H1 | Internal FTEs for implementation project | InterviewsScaled for | 1010 | 66 | 00 | 00 | |
H2 | Fully loaded average salary for an internal FTE involved in implementation | CompositeScaled for | $125,000 $125,000 | $125,000 $125,000 | $0 $0 | $0 $0 | |
H3 | Project length (months) | Interviews | 1010 | 66 | 00 | 00 | |
H4 | Third-party transition support fees | InterviewsScaled for | $1,250,000 $1,250,000 | $400,000 $400,000 | $0 $0 | $0 $0 | |
Ht | Implementation costs | (H1*(H2/12)*H3) +H4 | $2,291,667 $2,291,667 | $775,000 $775,000 | $0 $0 | $0 $0 | |
Risk adjustment | ↑10% | ||||||
Htr | Implementation costs (risk-adjusted) | $2,520,833 $2,520,833 | $852,500 $852,500 | $0 $0 | $0 $0 | ||
Three-year total: $3,373,333 $3,373,333 | Three-year present value: $3,295,833 $3,295,833 |
Evidence and data. Interviewees shared that their organizations had to allocate some resources to continue to maintain and support the SimCorp One platform. These costs include the communication of any technical support requirement to SimCorp, supporting upgrades, internal support, making changes and additions, and tasks associated with new releases and new integrations.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The impact of these costs may vary due to the following:
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 $1.0 million.
For , these costs may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
I1 | Maintenance team members (FTEs) | InterviewsScaled for | 2.02.0 | 3.03.0 | 3.03.0 | ||
I2 | Salary for a maintenance team member | CompositeScaled for | $150,000 $150,000 | $150,000 $150,000 | $150,000 $150,000 | $150,000 $150,000 | |
It | Maintenance and support costs | I1*I2 | $0 $0 | $300,000 $300,000 | $450,000 $450,000 | $450,000 $450,000 | |
Risk adjustment | ↑5% | ||||||
Itr | Maintenance and support costs (risk-adjusted) | $0 $0 | $315,000 $315,000 | $472,500 $472,500 | $472,500 $472,500 | ||
Three-year total: $1,260,000 $1,260,000 | Three-year present value: $1,031,856 $1,031,856 |
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.
The following table shows custom results for .
Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
---|---|---|---|---|---|---|
Total costs | ($2,520,833)($2,520,833) | ($4,055,000)($4,055,000) | ($4,935,000)($4,935,000) | ($4,935,000)($4,935,000) | ($16,445,833)($16,445,833) | ($13,993,448)($13,993,448) |
Total benefits | $0 $0 | $6,513,724 $6,513,724 | $15,650,384 $15,650,384 | $18,495,889 $18,495,889 | $40,659,996 $40,659,996 | $32,752,004 $32,752,004 |
Net benefits | ($2,520,833)($2,520,833) | $2,458,724 $2,458,724 | $10,715,384 $10,715,384 | $13,560,889 $13,560,889 | $24,214,163 $24,214,163 | $18,758,556 $18,758,556 |
ROI | 134%134% | |||||
Payback (from initial implementation) | 13 months13 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.
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.
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