A Forrester Total Economic Impact™ Study Commissioned By Astronomer, January 2024
As products and services increasingly depend on high-quality continuous data, the importance of reliant and scalable data delivery has never been greater. Enterprise leaders who use Apache Airflow to manage data pipelines often struggle with frequent downtime that threatens core business applications, significant labor to upkeep systems, and difficulty deploying and scaling services. Astronomer’s Astro is a managed service that enables Airflow users to achieve improved data stability and observability, accelerated speed to market, and reduced service and infrastructure management.
Astro is a managed service by Astronomer that offers a unified platform to orchestrate and govern data. Astro reduces the workload required for organizations to use Apache Airflow to run their workflows, allows them to accelerate development, and improves security. This is accomplished with Astro’s visibility and controls, intelligent infrastructure management, and tools for developer productivity. Astro automates much of the process of deploying and scaling Airflow, managing existing Airflow directed acyclic graphs (DAGs), writing and testing new code, and upgrading Airflow to the newest release. Astro also provides greater visibility across environments, providing deeper insight for infrastructure teams and business leaders.
Astronomer commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Astro.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Astro on their organizations.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four representatives with experience using Astro. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization. The composite is a B2B SaaS organization with 4,000 employees, leverages Airflow for 15 major service releases each year, and spends $200,000 annually on Airflow infrastructure.
Interviewees said that prior to using Astro, their organizations struggled with Airflow instances crashing and the lack of an audit trail to repair and debug data pipelines. In addition, many key staff members relied on a heavily manual process of deploying and managing Airflow instances, rather than spending their time on higher-value and creative work. However, prior attempts yielded limited success, leaving them with lost revenue from unstable services and dissatisfaction from employees and clients.
After the investment in Astro, the interviewees were able to significantly improve the stability of their services that leverage Airflow and allowed employees to reinvest their time toward higher-value work. Key results from the investment include reduced critical services downtime by 70%, reduced time to resolve Airflow issues in noncritical services by 92%, accelerated service release by seven days, reduced infrastructure costs by 45%, and reduced infrastructure management by 75%.
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
The representative interviews and financial analysis found that a composite organization experiences benefits of $1.67 million over three years versus costs of $311,000, adding up to a net present value (NPV) of $1.36 million and an ROI of 438%.
Return on investment (ROI):
Benefits PV:
Net present value (NPV):
Payback:
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment Astro.
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 Astro can have on an organization.
Interviewed Astronomer stakeholders and Forrester analysts to gather data relative to Astro.
Interviewed four representatives at organizations using Astro 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 Astronomer 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 Astro.
Astronomer 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.
Astronomer provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Chris Layton
Tony Lam
| Role | Industry | Revenue | DAGs |
|---|---|---|---|
| Data platform lead | Financial services | $500 million+ | 60 |
| Vice president of product and data | SaaS | $100 million+ | 35 |
| Tech lead and data architect | SaaS | $5 billion+ | 500+ |
| Vice president of data solutions and engineering | Media | $1 billion+ | 150 |
Prior to investing in Astro, some interviewees first attempted to build their own Airflow platform. They struggled with their engineering and DevOps teams being less efficient because deploying, managing, and developing on Airflow took significant amounts of time. In addition, Airflow instances were often set up incorrectly, meaning they could not properly scale and frequently failed, resulting in damage to business operations and reputation.
Other interviewees attempted to use third-party Airflow managed services. These interviewees found that the other platforms neither enabled full use of Airflow’s features nor saved their teams enough time as much of the deployment and management of Airflow was still manual.
Common challenges shared by the interviewees included:
Heavy labor and infrastructure burden with homegrown Airflow solutions. Interviewees who attempted to manage their own Airflow platform found that it required excessive labor and took their teams away from core responsibilities. Teams also lacked insight into the underlying processes and infrastructure as metadata would be lost. The tech lead and data architect at a SaaS company said: “Airflow has issues with underlying infrastructure, so jobs get rerun when they shouldn‘t, and metadata on why jobs are being run gets lost. We didn’t have visibility into the logging entries or missing metadata, and it was difficult for us to build that functionality with our existing infrastructure team.”
The vice president of product and data at a SaaS company said: “Once you’ve made the decision to go with Airflow, you have to decide if you want to manage it yourself. In theory, you have more control, but it’s difficult and it’s expensive. Once you decide you want to go with a managed service provider for Airflow, you’re talking about features and price between providers. Astronomer clearly wins on both of those from our perspective.”
The vice president of data solutions and engineering at a media company said: “If you use vanilla Airflow, you end up spending your time managing infrastructure instead of focusing on the right things. It costs you engineering time and productivity. We decided to use Astro to get away from that headache and no longer need to manage or spend the time upgrading Airflow. It’s really much easier for us.”
Limited employee effectiveness due to missing Airflow features and control. Interviewees who tried to use alternate Airflow managed services found that they did not have the level of control of Airflow that their stakeholders required. This limited how effective DevOps, data science, and other teams could be. In addition, many core Airflow functionalities were either not fully available or had been completely removed, further inhibiting data teams’ ability to effectively deliver data and end users’ ability to effectively leverage that data in their products and services.
The vice president of product and data at a SaaS company said: “Other services take Airflow and do weird proprietary stuff to it that you have to figure out. They say it’s Airflow, but then you look under the hood, and a bunch of stuff is missing.”
The interviewees’ organizations searched for a solution that could:
After an RFP and business case process evaluating multiple vendors, the interviewees’ organizations chose Astro and began deployment.
Most interviewees used Astro across almost all data pipelines; however, some more complex organizations had more fragmented systems and structure using a variety of platforms. In these cases, Astro’s usage was generally expected to increase and grow to become the centralized data platform.
The tech lead and data architect at a SaaS company said: “Astro came out on top when we looked at alternative options to our existing infrastructure build of Airflow. I definitely don’t know how else we could be doing better.”
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, billion-dollar business-to-business organization provides custom SaaS solutions for its clients, leveraging large data sets to train its artificial intelligence and machine learning models. The organization has a strong brand, operates globally, releases 15 new services each year that leverage Airflow, and brings in an average of $5 million in new revenue annually. Its existing Airflow environments have 4 9s (99.99%) uptime and cost about $200,000 each year in cloud computing infrastructure.
Deployment characteristics. The composite organization begins in Year 1 by leveraging Astro for its Airflow environments that support the most critical services and part of the SaaS business. In Year 2, this is expanded to most major services, and additional workflows are shifted from the composite organization’s infrastructure to Astro’s cloud infrastructure. In Year 3, all major services leveraging Airflow are run through Astro, and most workflows are run in Astro.
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Accelerated speed to market and scalability | $95,890 | $191,781 | $287,671 | $575,342 | $461,801 |
| Btr | Saved developer time | $71,400 | $142,800 | $214,200 | $428,400 | $343,857 |
| Ctr | Improved data reliability and organizational security (business value) | $184,800 | $231,000 | $231,000 | $646,800 | $532,463 |
| Dtr | Improved Airflow stability and data visibility (labor efficiency) | $46,236 | $55,983 | $61,570 | $163,789 | $134,558 |
| Etr | Reduced Airflow infrastructure and management costs | $35,000 | $86,000 | $129,000 | $250,000 | $199,812 |
| Total benefits (risk-adjusted) | $433,326 | $707,564 | $923,441 | $2,064,331 | $1,672,491 |
Evidence and data. Interviewed IT decision-makers who used Astro consistently found that it allowed them to accelerate development time through faster feedback loops, reliable data delivery, and easier development.
Modeling and assumptions. Forrester leveraged interview data to model the financial impact for the composite organization and assumes the following:
Risks. Forrester recognizes that these results may not be representative of all experiences and that the impact may vary depending on several factors:
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $462,000.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| A1 | Average business value of a new service using Astro and Airflow | Composite | $5,000,000 | $5,000,000 | $5,000,000 | |
| A2 | New services using Astro and Airflow released annually | Composite | 5 | 10 | 15 | |
| A3 | Development time saved per new service built with Astro (days) | Interviews | 7 | 7 | 7 | |
| A4 | Incremental revenue due to Astro (rounded) | (A1/365)*A2*A3 | $479,452 | $958,904 | $1,438,356 | |
| A5 | Operating profit margin | Composite | 25% | 25% | 25% | |
| At | Accelerated speed to market and scalability | A4*A5 | $119,863 | $239,726 | $359,589 | |
| Risk adjustment | ↓20% | |||||
| Atr | Accelerated speed to market and scalability (risk-adjusted) | $95,890 | $191,781 | $287,671 | ||
| Three-year total: $575,342 | Three-year present value: $461,801 | |||||
Evidence and data. In addition to accelerated speed to market and scalability providing greater business value, developers and other staff also saved time with faster feedback loops enabled by Astro.
Modeling and assumptions. Forrester leveraged interview data to model the financial impact for the composite organization and assumes the following:
Risks. Forrester recognizes that these results may not be representative of all experiences and that the impact may vary depending on several factors:
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 $344,000.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| B1 | New services using Astro and Airflow released annually | A2 | 5 | 10 | 15 | |
| B2 | Development time saved per new service built with Astro (days) | A3 | 7 | 7 | 7 | |
| B3 | Data engineers involved with development for each new service | Interviews | 5 | 5 | 5 | |
| B4 | Development time saved annually with Astro (hours) | B1*B2*B3*8 | 1,400 | 2,800 | 4,200 | |
| B5 | Development operations engineer fully burdened hourly wage | TEI standard | $60 | $60 | $60 | |
| Bt | Saved developer time | B4*B5 | $84,000 | $168,000 | $252,000 | |
| Risk adjustment | ↓15% | |||||
| Btr | Saved developer time (risk-adjusted) | $71,400 | $142,800 | $214,200 | ||
| Three-year total: $428,400 | Three-year present value: $343,857 | |||||
Evidence and data. One of the most significant improvements interviewees found with Astro was in the stability and data reliability of systems leveraging Airflow.
Modeling and assumptions. Forrester leveraged interview data to model the financial impact for the composite organization and assumes the following:
Risks. Forrester recognizes that these results may not be representative of all experiences and that the impact may vary depending on several factors:
Results. To account for these risks, Forrester adjusted this benefit downward by 25%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $532,000.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| C1 | Airflow uptime before Astro | Interviews | 99.99% | 99.99% | 99.99% | |
| C2 | Critical application downtime from Airflow incidents (hours, rounded) | 365*24*(1-C1) | 0.88 | 0.88 | 0.88 | |
| C3 | Average cost of application downtime of critical services per hour | Composite | $500,000 | $500,000 | $500,000 | |
| C4 | Subtotal: Annual cost of application downtime due to critical Airflow issues | Composite | $440,000 | $440,000 | $440,000 | |
| C5 | Reduction in critical Airflow issues with Astro | Interviews | 45% | 60% | 60% | |
| C6 | Reduction in MTTR of critical Airflow issues with Astro | Interviews | 20% | 25% | 25% | |
| C7 | Total percentage reduction in Airflow downtime of critical services | C5+((1-C5)*C6) | 56% | 70% | 70% | |
| Ct | Improved data reliability and organizational security (business value) | C4*C7 | $246,400 | $308,000 | $308,000 | |
| Risk adjustment | ↓25% | |||||
| Ctr | Improved data reliability and organizational security (business value) (risk-adjusted) | $184,800 | $231,000 | $231,000 | ||
| Three-year total: $646,800 | Three-year present value: $532,463 | |||||
Evidence and data. Astro also helped organizations avoid downtime for noncritical systems, which helped improve the quality of services and saved time that employees could reallocate to higher-value tasks.
Modeling and assumptions. Forrester leveraged interview data to model the financial impact for the composite organization and assumes the following:
Risks. Forrester recognizes that these results may not be representative of all experiences and that the impact may vary depending on several factors:
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 $135,000.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| D1 | Noncritical Airflow incidents per year without Astro | Interviews | 276 | 276 | 276 | |
| D2 | MTTR of noncritical issues without Astro (hours) | Interviews | 1.3 | 1.3 | 1.3 | |
| D3 | FTEs involved per noncritical Airflow incident | Interviews | 8 | 8 | 8 | |
| D4 | Subtotal: Annual labor to resolve Airflow issues without Astro (hours, rounded) | D1*D2*D3 | 2,870 | 2,870 | 2,870 | |
| D5 | Reduction in the number of low-priority Airflow incidents with Astro | Interviews | 55% | 64% | 73% | |
| D6 | Noncritical Airflow incidents avoided with Astro (rounded) | D1*D5 | 152 | 177 | 202 | |
| D7 | Noncritical Airflow incidents remaining with Astro | D1-D6 | 124 | 99 | 74 | |
| D8 | Reduction in MTTR of noncritical incidents with Astro | Interviews | 34% | 51% | 67% | |
| D9 | Time saved with Astro per noncritical incident (hours, rounded) | D2*D8 | 0 | 0.7 | 0.9 | |
| D10 | Subtotal: Annual labor saved resolving noncritical Airflow incidents with Astro (hours, rounded) | (D2*D3*D6)+(D3*D7*D9) | 1,978 | 2,395 | 2,634 | |
| D11 | Reduction in labor hours to resolve noncritical Airflow incidents with Astro | D10/D4 | 69% | 83% | 92% | |
| D12 | Data engineer fully burdened hourly wage | TEI standard | $55 | $55 | $55 | |
| D13 | Time recaptured | Composite | 50% | 50% | 50% | |
| Dt | Improved Airflow stability and data visibility (labor efficiency) | D10*D12*D13 | $54,395 | $65,863 | $72,435 | |
| Risk adjustment | ↓15% | |||||
| Dtr | Improved Airflow stability and data visibility (labor efficiency) (risk-adjusted) | $46,236 | $55,983 | $61,570 | ||
| Three-year total: $163,789 | Three-year present value: $134,558 | |||||
Evidence and data. Airflow reduced infrastructure costs in two ways. First, as Astro allowed for more appropriate types of Airflow instances to be deployed, the computing costs of these instances were slightly less than prior to Astro, when less-efficient instances were often used. Second, interviewees generally began moving Airflow computing from their own cloud or on-premises infrastructure to Astro’s cloud. In addition, fewer FTEs were required to manage this infrastructure, saving labor costs.
Modeling and assumptions. Forrester leveraged interview data to model the financial impact for the composite organization and assumes the following:
Risks. Forrester recognizes that these results may not be representative of all experiences and that the impact may vary depending on several factors:
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $200,000.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| E1 | Airflow infrastructure costs before Astro | Composite | $200,000 | $200,000 | $200,000 | |
| E2 | Percentage reduction in infrastructure costs due to Astro | Interviews | 10% | 30% | 45% | |
| E3 | Reduction in infrastructure costs due to Astro | E1*E2 | $20,000 | $60,000 | $90,000 | |
| E4 | Saved time on ongoing Airflow infrastructure management | Interviews | 25% | 50% | 75% | |
| E5 | Infrastructure engineers required to maintain Airflow without Astro | Composite | 1 | 1 | 1 | |
| E6 | Infrastructure engineer fully burdened annual salary | TEI standard | $95,000 | $95,000 | $95,000 | |
| E7 | Reduction in Airflow management costs due to Astro | E4*E5*E6 | $23,750 | $47,500 | $71,250 | |
| Et | Reduced Airflow infrastructure and management costs | E3+E7 | $43,750 | $107,500 | $161,250 | |
| Risk adjustment | ↓20% | |||||
| Etr | Reduced Airflow infrastructure and management costs (risk-adjusted) | $35,000 | $86,000 | $129,000 | ||
| Three-year total: $250,000 | Three-year present value: $199,812 | |||||
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
Improved number and quality of AI and ML services. Each interviewee worked with data teams developing new AI and ML capabilities, and Astro helped these teams with this work in two different ways. First, it more quickly and reliably provided high-quality training data, improving the effectiveness of development and allowing new models and features to be integrated faster. Second, Astro freed up employee time on Airflow management and maintenance, meaning more employees could be allocated to AI and ML projects and broadening the scope of the types of initiatives organizations and leadership could conduct.
The vice president of data solutions and engineering at a media company said: “Astro is empowering our ML teams as they build offline interference and subscription propensity models. They can use Astro to orchestrate the batch workflows as the data becomes available.”
Ensured greater protection of PII and compliance with data privacy regulations. Interviewees, especially those with global operations, operated under strict and disparate data privacy regulations and faced the potential for large fines if data environments did not comply with all requirements. Astro enabled organizations to track data through their pipelines and help meet the strict requirements in each country of operation. Interviewees particularly valued the audit trails that Astro provided for Airflow processes, which made compliance easier to achieve.
Forrester has found that PII is the most common type of compromised data globally, supporting interviewees’ experience that Astro has helped them to avoid regulatory fines.2
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Astro and later realize additional uses and business opportunities, including:
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Ftr | Astro usage-based license cost | $0 | $57,500 | $133,400 | $164,450 | $355,350 | $286,074 |
| Gtr | Implementation and ongoing labor | $21,120 | $1,584 | $1,584 | $1,584 | $25,872 | $25,059 |
| Total costs (risk-adjusted) | $21,120 | $59,084 | $134,984 | $166,034 | $381,222 | $311,133 |
Evidence and data. Users paid for Astro on a usage-based model.
Modeling and assumptions. Forrester leveraged interview data to model the financial impact for the composite organization and assumes the following:
Risks. Forrester recognizes that these results may not be representative of all experiences and that the impact may vary depending on several factors:
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 $286,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| F1 | Astro license cost (including cloud computing) | Interviews | $0 | $50,000 | $116,000 | $143,000 | |
| Ft | Astro usage-based license cost | F1 | $0 | $50,000 | $116,000 | $143,000 | |
| Risk adjustment | ↑15% | ||||||
| Ftr | Astro usage-based license cost (risk-adjusted) | $0 | $57,500 | $133,400 | $164,450 | ||
| Three-year total: $355,350 | Three-year present value: $286,074 | ||||||
Evidence and data. Prior to using Astro, interviewees led discovery and change management in their organization to identify where Astro would provide the greatest impact in the shortest amount of time. A few hours of additional oversight was provided each month thereafter as Astro usage was expanded to additional services throughout the organization.
Modeling and assumptions. Forrester leveraged interview data to model the financial impact for the composite organization and assumes the following:
Risks. Forrester recognizes that these results may not be representative of all experiences and that the impact may vary depending on several factors:
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 $25,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| G1 | Initial implementation and change management (hours) | Interviews | 320 | 0 | 0 | 0 | |
| G2 | Development operations engineer fully burdened hourly wage | TEI standard | $60 | $60 | $60 | $60 | |
| G3 | Subtotal: Labor for Astro implementation and internal change management | G1*G2 | $19,200 | $0 | $0 | $0 | |
| G4 | Annual labor to manage Astro (hours) | Interviews | 0 | 24 | 24 | 24 | |
| G5 | Subtotal: Ongoing Astro management | G2*G4 | $0 | $1,440 | $1,440 | $1,440 | |
| Gt | Implementation and ongoing labor | G3+G5 | $19,200 | $1,440 | $1,440 | $1,440 | |
| Risk adjustment | ↑10% | ||||||
| Gtr | Implementation and ongoing labor (risk-adjusted) | $21,120 | $1,584 | $1,584 | $1,584 | ||
| Three-year total: $25,872 | Three-year present value: $25,059 | ||||||
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($21,120) | ($59,084) | ($134,984) | ($166,034) | ($381,222) | ($311,133) |
| Total benefits | $0 | $433,326 | $707,564 | $923,441 | $2,064,331 | $1,672,491 |
| Net benefits | ($21,120) | $374,242 | $572,580 | $757,407 | $1,683,109 | $1,361,358 |
| ROI | 438% | |||||
| Payback | <6 months |
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
Benefits represent the value delivered to the business by the product. The TEI methodology places equal weight on the measure of benefits and the measure of costs, allowing for a full examination of the effect of the technology on the entire organization.
Costs consider all expenses necessary to deliver the proposed value, or benefits, of the product. The cost category within TEI captures incremental costs over the existing environment for ongoing costs associated with the solution.
Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. Having the ability to capture that benefit has a PV that can be estimated.
Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”
The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.
Related Forrester Research
“Develop Data Privacy Metrics That Matter To The Business,” Forrester Research, Inc., August 2, 2021
“Seven Essential Capabilities To Enable DataOps for AI Development,” Forrester Research, Inc., February 8, 2023
1 Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
2 Source: “The State Of Data Security, 2023,” Forrester Research Inc., August 22, 2023.
3 Source: “The Forrester Data Privacy Compliance Model,” Forrester Research Inc., August 1, 2022.
4 Source: “The State of Data Security,” Forrester Research, Inc., August 22, 2023.
Cookie Preferences
Accept Cookies
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.