Incremental Profit From More Effective Revenue-Generating Teams

Evidence and data. The interviewees’ legacy project collaboration and knowledge management tools were not easily searchable, readily discoverable, nor optimized for team collaboration. Prior to the deployment of Confluence, interviewees’ organizations did not have the capability to efficiently and effectively leverage knowledge and learnings from prior projects, and new projects usually started from a blank slate.

With the deployment of Confluence, interviewees noted that their teams could work together in shared workspaces from planning to execution. Confluence streamlined collaboration, shortened project lifecycles, and delivered faster business outcomes, even as the number of users increased. Interviewees explained that the efficiencies and enhanced project-level collaboration enabled more revenue-generating projects to be completed on time. They also noted how their organizations became even more productive with a holistic deployment of Confluence across the entire organization. Interviewees shared examples including:

• The head of collaboration for a luxury fashion house saw compounded improvement in their product design process when using Confluence with Jira (an Atlassian team project management solution) across business and technical teams. They noted: “In four years, we have gone from 4,000 users to 20,000 users. In the past, we used to have a deployment of 50 projects with 200 to 250 associated features. After the deployment of both Atlassian tools, with agility services, we are tracking approximately 100 projects deployed by year and 1,000 associated features. We significantly increased our capabilities with both Confluence and Jira.”

• The director of agile transformation for the communications services provider described how improved team collaboration led to better business results: “We tracked the progress of a particular team. [With Confluence], they were generating 25% more capabilities and then were able to close those capabilities efficiently, getting up to an 80% completion rate.”
• The chief of staff for the CTO at the education technology company stated: “There is an unquestionable productivity gain. We can launch projects faster because we have a central place where we store information and software requirements. It’s a one-stop shop.”
• The product management lead for the professional services provider discussed the reduction of wasted time during cross-team collaboration: “[With Confluence], teams can create an internal web page about what they do and make it easily findable across the organization. I would say there’s at least a 10% to 20% reduction in wasted time trying to find the right person or open a ticket.”

Modeling and assumptions. This benefit focuses on how revenue-generating teams for the composite organization improve their individual and team effectiveness by deploying Confluence for enhanced collaboration and knowledge management, driving incremental profit. For the composite organization, Forrester assumes the following:

• Knowledge workers make up 70% of the workforce, and 50% of them collaborate on revenue-generating teams. In Year 1, 7,000 knowledge workers work on revenue-generating teams.

• Twenty-five percent of annual revenue is driven by these revenue-generating teams. The other 75% is recurring revenue.
• The revenue-generating capacity of teams improves by 4% in Year 1, 5% in Year 2, and 6% in Year 3 based on the improved overall productivity for individuals collaborating on revenue-generating teams.

• Revenue-generating teams are assumed to adopt Confluence at the same rate as other knowledge workers: 40% in Year 1, 60% in Year 2, and 80% by Year 3. This means that of the 7,000 total knowledge workers on revenue-generating teams, 2,800 unlock benefits by adopting Confluence starting in Year 1.

• To determine the net business impact for the composite, the revenue benefit is converted into operating profit. Forrester assumes that the operating margin for the composite is 15%, partly based on the range of operating margins for the interviewees’ organizations.

• For this benefit, the composite organization generates an additional 1.6% of team-generated incremental profit in Year 1, 3.0% in Year 2, and 4.8% in Year 3.

Risks. Forrester recognizes that these results may not be representative of all experiences and that the benefit will vary among organizations depending on the following factors:

• Improved revenue-generation efficiency of teams collaborating with Confluence will depend on the deployment ramp and relative sophistication of an organization’s knowledge workers.
• The percentages of knowledge workers on revenue-generating teams and the annual recurring revenue generated by collaborating teams will vary by industry, products, and organization.
• Operating margins will depend on the company and product offering.

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 more than $11.6 million.

Enhanced Knowledge Worker Productivity

Evidence and data. Interviewees stated that before Confluence, knowledge workers’ productivity was negatively impacted by frequent interruptions from colleagues, context switching between platforms, and time spent hunting down necessary information and documentation across platforms. Traditional collaboration and knowledge management tools were not optimized for efficient collaboration and discovery of critical information­­. Interviewees also noted that onboarding new knowledge workers and bringing on new teammates for projects required longer lead times, or even dedicated training or coaching, due to a dearth of centralized institutional knowledge.

With the deployment of Confluence, knowledge workers at interviewees’ organizations leveraged templates, AI, and automation to start projects faster and streamline their workflows. AI-powered search and page suggestions surfaced relevant information to the right person at the right time, reducing delays and interruptions. Workers no longer had to constantly context-switch, and they could easily and quickly find relevant information. As a result, enhanced collaboration within and among teams enabled knowledge workers to be more productive and led to shortened project durations and improved business outcomes. Interviewees again noted their teams would become even more productive with a holistic, organizationwide deployment of Confluence. Examples include:

• The product management lead for the professional services provider explained how teams using Confluence can onboard new teammates faster: “Let’s say, you have a team of 5,000 people tracking their work in Jira. That team is now doing all their onboarding in Confluence. At this point, at least 10% to 15% of time is saved through onboarding. I wouldn’t be surprised if that hits closer to 50% as Atlassian Intelligence rolls out more broadly.”
• The director of agile transformation for the communications services provider gave an example of team productivity improvement: “Last year, we started hosting calls with 100 participants twice a week just to talk about a change in process and framework. We’ve scaled that back to once every other week, and the reason is because we’ve created this asynchronous collaboration capability with Confluence.” They also explained how Confluence’s content collaboration features improved individual productivity: “I needed a template to manage my relationship with my vice president: Here are our goals, here are our one-on-ones. The ability to have Smart Links within Confluence to display dashboards and track KPIs kept everything in one place. I used to meet with him for an hour each week. Now, I’m easily saving 20 to 25 minutes each meeting.”
• The head of collaboration of the luxury fashion house stated: “We are more efficient administering our knowledge base and creating deliverables for our management and customers. Before [Confluence], we were spending a lot of time on the administrative part. Today, for the same project, we have 20 or 30 people on a team, but we spend more time on the project and less time on administrative and searching tasks.” They explained how using repeatable and consistent templates resulted in more productive collaboration: “We don’t create [decks] for presentation. We just share the Confluence page to show the status of the project.”

Modeling and assumptions. This benefit values the cost savings derived by the composite organization for the nonrevenue-generating knowledge workforce through higher productivity ­­­driven by Confluence. It is important to note that this benefit complements, or is the inverse of, Benefit A: Benefit A shows how employees on revenue-generating teams have turned time savings into greater revenue opportunities; this benefit shows the productivity improvement for employees on nonrevenue-generating teams based on the value of their time. There are three components to this benefit: 1) productivity of workers on teams, 2) productivity of managers/executives, and 3) faster ramp to full productivity for new hires. For the composite organization, Forrester assumes the following:

• Total Confluence users are 5,600 in Year 1 and 11,424 by Year 3 (R11).

• Fifteen percent of these knowledge workers are managers and executives, who see a lower productivity benefit because they do not spend as much time working directly on collaborative team efforts. Managers and executives from revenue-generating teams are assumed to be included in this count.

• Prior to using Confluence, the average knowledge worker spends 20% of their time on underproductive activities.
• Forrester projects that the productivity of individuals collaborating on nonrevenue-generating teams for the composite organization will improve by 8% in Year 1, 10% in Year 2, and 12% by Year 3.

• Nonrevenue-generating knowledge workers (excluding managers and executives) are assumed to have a fully burdened hourly salary of $52 per hour.

• Forrester assumes that without Confluence, managers and executives spend 10% of their time on underproductive search and data-gathering activities.
• The productivity improvement for managers and executives collaborating with Confluence is 5.2% in Year 1, 6.5% in Year 2, and 7.8% in Year 3.

• Managers and executives are assumed to have a fully burdened hourly salary of $117 per hour.

• The composite organization grows its workforce by 2% each year, equivalent to 200 new hires. Seventy percent of these new hires, or 140 of them, are knowledge workers. It is further assumed that these knowledge workers will be added to teams transitioning to Confluence.

• The newly hired knowledge workers joining teams using Confluence will more quickly ramp to anticipated productivity by 12% in Year 1, 15% in Year 2, and 18% in Year 3.

• Prior to Confluence, a new hire typically needed six weeks to ramp onto a team.
• For benefits with productivity gains, Forrester applies a 50% productivity adjustment factor for the composite that represents the percentage of productivity savings realized (i.e., 1 hour of time savings does not necessarily translate into 1 hour of productive work). For the three productivity-based cost savings outlined in this benefit, the composite’s knowledge workers are assumed to productively utilize 50% of their time savings.

Risks. Forrester recognizes that these results may not be representative of all experiences and that the benefit will vary among organizations depending on the following factors:

• Deployment ramp and relative sophistication of the knowledge workers will affect the scale of productivity improvement.
• The percentage of knowledge workers on nonrevenue-generating collaborative teams will vary by industry, products, and organization.
• Knowledge workers’ functional role and industry affect the percentage of time spent by knowledge workers on underproductive activities prior to the use of Confluence for team and individual collaboration.

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 nearly $9.2 million.

Eliminated Alternative Tools And Reduced Administrative Expenses

Evidence and data. Each of the four interviewees’ organizations was in a different stage of Confluence adoption as their collaboration platform. These interviewees had no other similarly scalable collaboration solution deployed when deciding to adopt Confluence. In general, most interviewees felt that the time and effort required to administer their piecemeal legacy collaboration solutions were cumbersome.

Two of the four interviewees noted that Confluence’s whiteboards enabled them to reduce or eliminate similar legacy solutions. Two interviewees also cited that the administrative effort required to support the Confluence platform was meaningfully lower than that accompanying their legacy collaboration and knowledge management solutions.

• The product management lead for the professional services provider detailed why Confluence was more efficient to administer and maintain: “The cloud version of Confluence has security features built in, so you do not need the additional overhead of operations teams to manage the security aspects. Of course, you still need administration. I would estimate at least 10% to 20% fewer administrators are needed just due to the fact that security is managed for you.” They went on to state that this freed up staff to focus on more value-added work.
• The director of agile transformation for the communications services organization explained how they were able to eliminate a legacy whiteboarding tool: “We have a tool proliferation problem and that goes back to our many mergers. We made a conscious decision to not renew our [legacy whiteboard tool] licenses, saving $90,000 in annual subscription costs.”

Modeling and assumptions. For the composite organization, Forrester assumes the following:

• Based on interviews and available market data, a competitive whiteboarding utility is estimated to cost $13.85 per user on an annual subscription basis.

• For an organization of the composite’s scale, three IT FTEs at 20% of their time are needed to administer the Confluence platform.

• The number of FTE hours required to administer legacy collaboration and knowledge management platforms is estimated to be 20% higher.
• The average fully burdened hourly salary for IT ops professionals responsible for administering the collaboration platform is assumed to be $78 per hour (rounded).

Risks. Forrester recognizes that these results may not be representative of all experiences and that the benefit will vary among organizations depending on the following factors:

• Cost savings could potentially be higher for organizations that actually replace a competitive collaboration and knowledge management platform.
• The 20% productivity savings for administering Confluence is assumed to scale depending on the size of the organization.

Results. To account for these risks, Forrester adjusted this benefit downward by 5%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of just under $330,000.

Unquantified Benefits

Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:

• Higher-quality project outcomes. Teams collaborating with Confluence were able to get better business outcomes and improve completion rates, which have largely been quantified in Benefits A and B. However, enhanced collaboration with Confluence can also lead to higher-quality results. For example, shorter project completion times could lead to faster time to market and even more impact on revenue and profit. And the ability for both internal and consumer product teams to take on more complex projects without materially adding headcount can lead to improved quality, employee experience, and customer satisfaction.
• Enterprisewide scalability and compounding value at scale. Ease of use and adoption of the Confluence platform enables faster and broader enterprisewide usage that can lead to faster and greater enablement of productivity, revenue, and cost savings benefits. The product management lead for the professional services provider spoke about usability and adoption: “One of the biggest use cases is a wiki, so basically an internal website for a whole team to stay in touch. That is a powerful result of what Confluence can do. It’s also very user friendly. You don’t need to have a strong coding background to be able to use it as a document repository, and it’s one place that’s searchable. There’s a lot of strength in that, and I’d say that’s one big reason people started using it.”
  
  Interviewees also noted the cumulative impact on organizationwide collaboration where wall-to-wall usage of using Confluence results in higher productivity for the organization compared to the improvements estimated at the team and individual levels.
• Improved employee experience. Standardizing workflows and processes allows all teams to communicate and share best practices, which can lead to additional product quality and feature improvements. The chief of staff for the CTO of the education technology company stated: “We have a regular employee satisfaction survey. One of the questions is, ‘Do our tools work for us, reduce burden, and do we get what we want out of them?’ Not everything scores well, but I will tell you what people do not complain about is the wiki. They love Confluence.”

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Confluence and later realize additional uses and business opportunities, including:

• Improved innovation and competitiveness. All interviewees clearly stated that the power of Confluence was in enhanced collaboration and knowledge management, enabling greater productivity from their project and product teams. What was perhaps unexpected and still in the stages of being fully realized was the multiplier effect on innovation — and therefore competitiveness — of deploying Confluence wall-to-wall across the organization.
• Enhanced value of full adoption. Interviewees noted the cumulative impact on organizationwide collaboration when everyone uses Confluence. Having a collaboration platform that can scale from small teams to larger organizational breadth is a key benefit but is challenging to measure. The chief of staff for the CTO of the education technology company said: “We started [Confluence] in sales and then expanded that use case further to product teams. Then, we wanted to expand it across the whole company. The ability to scale was amazingly powerful for us. It is an enterprise-grade product.”
• Eliminated additional legacy collaboration tools. Interviewees were able to quantify the savings from the reduction or retirement of niche solutions like whiteboarding. Some enterprises may be using additional niche or platform collaboration solutions that could be replaced when implementing Confluence. In those cases, the financial benefit of replacing the collaboration platform with Confluence could be much more significant, including reduced security risk from managing a more consolidated tech stack. If other products or solutions were included in their legacy platform, the composite organization might be able to save additional hundreds of thousands of dollars or more per year.

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).