The Total Economic Impact™ Of The Celigo Integration Platform
Cost Savings And Business Benefits Enabled By The Celigo Integration Platform
A Forrester Total Economic Impact™ Study Commissioned By Celigo, August 2024
One-third of developers in Forrester’s Developer Survey, 2022, looked for architecture strategies and designs that foster business agility.1 However, integrating applications and data with hand-coding is a significant barrier to achieving that agility. As such, an integration platform as a service (iPaaS) appeals to teams that want to solve integration challenges rapidly with easy maintenance and operations.2 The Celigo integration platform, as a unified low-code integration and automation solution, houses these capabilities. The Celigo platform enables organizations to increase user productivity, data accuracy, and connectivity while reducing operational costs and promoting business growth.
The Celigo integration platform is an AI-enabled cloud-native iPaaS that allows its users to automate their business processes across the entire enterprise. It does this by enabling IT development and line-of-business teams alike to build, maintain, and manage integrations across their organization’s software-as-a-service (SaaS) and legacy on-premises applications, which are critical to automating these processes end to end.
Celigo commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying the Celigo integration platform.3 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of the Celigo integration platform on their organizations.
Registration Required To Continue
Return on investment (ROI)
383%383%
Net present value (NPV)
$1.1M$1.1M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed five representatives with experience using the Celigo platform. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization.
Interviewees said that prior to using the Celigo integration platform, their organizations’ business processes and integrations were manual or only partially automated with antiquated point-to-point (P2P) or other iPaaS solutions. As such, their existing processes were prone to errors as data scaled, which negatively affected end-user, customer, and partner experiences. There was high demand to improve business process efficiencies as the organizations grew, but they faced technical limitations with their existing technologies and setups. Additionally, IT teams were strapped for time and lacked the capacity to fulfill the integration and automation needs of the business with the complex integration solutions they currently had in place.
With the investment in the Celigo platform, the interviewees’ organizations had access to a centralized integration and automation solution with an interface that catered to both technical and business users. Key results from the investment include improved IT and business user productivity, a reduction in errors, and cost savings related to legacy integration and automation solutions. Process efficiencies also translated to improved end-user, customer, and partner experiences and business growth.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- An incremental profit contribution of $246,000. The Celigo integration platform enables the organization to boost operations and customer service through better system integrations, seamless data exchange, workflow automation, and improved access to data and insights. These optimizations, tailored to meet customer needs, result in business growth. By Year 3, the Celigo platform implementation affects 30% of the composite organization’s annual revenue.
For , incremental profit contribution might be worth over three years.
- A reduction of up to 70% in development timelines for integrations and flow projects. The Celigo platform’s low-code environment allows IT staff to reduce time spent on deploying integrations and process automation projects and to reallocate projects to business users. This saves the composite organization $458,000 over three years.
For , a reduction in development timelines for integrations and flow projects might be worth over three years.
- A 50% reduction in data errors and 83% reduction in error resolution. With the introduction of automation into business processes and a centralized view into the status of all integrations and flows throughout the enterprise with the Celigo platform, the composite organization experiences a $105,000 reduction in the cost of resolving data errors over three years.
For , a reduction in the cost of resolving data errors might be worth over three years.
- More than 100 hours of time back per year to end users affected by process automations with the Celigo platform. Introducing automation into end-user workflows frees up employee time typically spent on manual, repetitive, and data-based tasks. This saves the composite organization $252,000 over three years.
For , business user productivity improvements might be worth over three years.
- Tools replacement cost savings of $329,000 over three years. The Celigo platform replaces legacy tools related to integration and business process automation (BPA), which are not comprehensive or flexible enough to perform required automation or integration tasks. Replacing legacy tools with the Celigo platform minimizes the maintenance effort required of IT staff.
For , tool replacement cost savings might be worth over three years.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- AI benefits. Celigo’s AI features simplify integration tasks and enhance productivity. With tools for predictive analytics, error detection, data mapping, and documentation, the composite organization frees up additional time for strategic work.
- Reduction in excess costs. Celigo improves inventory visibility and management, helping to avoid over- and under-ordering, reducing operational costs, and improving efficiency by replacing spreadsheets with real-time data.
- Enhanced customer satisfaction. Improved access to up-to-date pricing, inventory, and sales information through Celigo reduces issues related to overselling and listing errors. Additionally, more comprehensive data insights with the Celigo platform allow the composite organization to better meet customer needs, improving the customer experience and deepening its relationship with customers.
- Faster access to data for accelerated business decisions. The Celigo platform enables the composite organization to quickly access current data, resulting in more timely and accurate reporting that supports faster, more informed business decisions.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Fees to Celigo. Subscription fees are based on the number of endpoint apps, platform flows, and feature needs for the organization. The organization also pays an additional fee for Celigo professional services in Year 1 for assistance in developing the initial integrations and flows. Based on the composite organization’s usage, this totals $186,000 over three years.
For , fees to Celigo over three years might total .
- Implementation and ongoing management. IT full-time employees (FTEs) are involved in the planning, deployment, and ongoing management of the platform. This costs the composite $99,000 over three years.
For , implementation and ongoing management costs over three years might total .
- Internal costs. The composite organization requires minimal training for IT and business users to become proficient using the Celigo platform. The cost totals $2,500 over three years.
For , internal costs over three years might total .
The representative interviews and financial analysis found that the composite organization experiences benefits of $1.4 million over three years versus costs of $287,000, adding up to a net present value (NPV) of $1.1 million and an ROI of 383%.
might experience benefits of over three years versus costs of and an ROI of .
Key Statistics
-
Return on investment (ROI)
383%383%
-
Benefits PV
$1.4M$1.4M
-
Net present value (NPV)
$1.1M$1.1M
Benefits (Three-Year)
Incremental profit contribution Integration development cost avoidance Reduction in cost of resolving data errors Business user productivity improvement Cost savings from retired integration technologies
TEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in the Celigo integration platform.
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 the Celigo integration platform can have on an organization.
-
Due Diligence
Interviewed Celigo stakeholders and Forrester analysts to gather data relative to the Celigo integration platform.
-
Interviews
Interviewed five representatives at four organizations using the Celigo integration platform to obtain data about costs, benefits, and risks.
-
Composite Organization
Designed a composite organization based on characteristics of the interviewees’ organizations.
-
Financial Model Framework
Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.
-
Case Study
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Disclosures
Readers should be aware of the following:
This study is commissioned by Celigo 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 the Celigo integration platform. 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 the Celigo integration platform based on the inputs provided and any assumptions made. Forrester does not endorse Celigo or its offerings. Although great care has been taken to ensure the accuracy and completeness of this model, Celigo 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 Celigo make no warranties of any kind.
Celigo 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.
Celigo provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Sanitra Desai
Zahra Azzaoui
Drivers leading to the Celigo integration platform investment
Interviews
| Role | Industry | Revenue | Celigo usage |
|---|---|---|---|
|
CTO Executive vice president (EVP) |
Technology | $400 million | Number of
integration flows: 185 Number of endpoints: >10 |
| VP of IT | Pharmaceuticals | $200 million | Number of
integration flows: 30 Number of endpoints: 8 |
| IT director | Retail | N/A | Number of
integration flows: 50 Number of endpoints: 6 |
| Director of enterprise applications | Retail | $100 million | Number of
integration flows: 20 Number of endpoints: 9 |
Key Challenges
Prior to the investment in the Celigo integration platform, interviewees said their organizations’ business processes and integrations were either fully manual or partially automated using antiquated P2P solutions. For some, their organizations had also implemented another iPaaS solution for specific integration use cases. The interviewees noted how their organizations struggled with common challenges, including:
- Technical limitations. Inefficient and outdated technologies and setups constrained interviewees’ organizations. With no streamlined approach to integrations and automations, these organizations faced difficulties in scaling and managing integrations. Additionally, other iPaaS solutions were difficult to use and needed specialized resources, resulting in additional costs. The EVP of a technology organization explained: “Our old iPaaS solution was truly a developer’s platform, so for everything we needed to do, we needed high-level developers. The added complexity of creating integrations resulted in a lot more errors as well.”
- Data transfer errors through manual and P2P integrations. Interviewees noted that it was difficult to leverage data across the disparate systems in place at their organizations. Data (e.g., product, order, or inventory information) often had to be manually uploaded from one system to another. According to the VP of IT at a pharmaceutical organization: “A spreadsheet would get manually exported from one place, run through a macro, and uploaded somewhere else. We had to do that for the whole dataset every time there was a change, so there were often errors and duplications. And as business was rapidly growing, all this data was becoming increasingly difficult to manage, especially with our small operational teams.”
-
IT teams that struggled to respond to business
needs. The organizations’ small IT teams had little
capacity to take on new projects as their businesses grew and therefore
struggled to support the evolving needs of the business. The IT director at
a retail organization said, “We wanted to expand our e-commerce footprint,
but our IT team did not have the bandwidth or technology to take this
initiative on with our legacy setup.” Additionally, interviewees mentioned
that sometimes the resulting integrations and automations were not as robust
in terms of complexity as they needed them to be due to resource and time
constraints.
The director of enterprise applications at a retail organization highlighted the fact that, with the previous integration tool, their organization had to rely on the vendor to make certain changes to integrations. The interviewee explained: “When we needed a mapping change, we were dependent on the vendor to make those changes, so there was lack of flexibility, and time to market was slow. We really wanted to take back control going forward.” - Disconnected and error-prone processes that hurt end-user, customer, and partner experiences. Data inaccuracies, lack of data visibility, and a delay in response time due to these issues hindered interviewees’ organizations’ relationships with both customers and partners as well as the internal user experience. The CTO of a technology organization said: “From a consumer experience standpoint, there were times where an order was placed but was never shipped on time because the order never went to the third-party logistics [provider], or times where we didn’t charge the customer on time because we shipped but never received the signal that it happened. All of these integration-type challenges caused major issues for our customer service team and hindered customer experience.”
Investment Objectives
The interviewees’ organizations searched for a solution that could:
- Break down silos and gain data consistency and accuracy across the organization.
- Empower internal teams to respond to business opportunities and challenges faster and streamline operations.
- Reduce the cost of scaling as the amount of data increased and business units needed to automate processes more rapidly or integrate applications.
- Uplift employee, customer, and partner experiences.
Composite Organization
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the 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 global enterprise has $200 million in annual revenue and 500 employees. It serves both business and individual customers. The organization identifies weaknesses in its current integration and automation strategy and seeks out a more centralized and governed approach. The composite organization is looking to transform into a modern digital enterprise by streamlining the integration process and introducing automation into its workflows to build efficient operations, improve internal agility, and better engage with customers and partners.
Deployment characteristics. The organization uses the Celigo platform for integration and automation in both back-office and business-facing operations/applications. It implements the Celigo platform as a strategic initiative with a clear view of which business processes it initially hopes to analyze and optimize with the solution. In Year 1, the organization creates 20 integrations/flows between three endpoints. The automation within these flows affects the efficiency of 20 business users.
Following the success of early flows, the composite organization expands its deployment of the Celigo platform to include 75 integrations/flows between 12 endpoints over three years. The integrations affect 100 business users by Year 3 of implementation. Over time, more business users are onboarded onto the platform to create integrations/flows, and there is an increase in reusable components. As such, development timelines and the cost associated with development shrink. Four IT and two business users create integrations using the Celigo platform by Year 3.
Quantified benefit data as applied to the composite
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Incremental profit contribution | $51,000 $51,000 | $102,000 $102,000 | $153,000 $153,000 | $306,000 $306,000 | $245,612 $245,612 |
| Btr | Integration development cost avoidance | $146,253 $146,253 | $186,791 $186,791 | $226,760 $226,760 | $559,804 $559,804 | $457,698 $457,698 |
| Ctr | Reduction in cost of resolving data errors | $39,933 $39,933 | $42,930 $42,930 | $44,280 $44,280 | $127,143 $127,143 | $105,050 $105,050 |
| Dtr | Business user productivity improvement | $37,440 $37,440 | $93,600 $93,600 | $187,200 $187,200 | $318,240 $318,240 | $252,038 $252,038 |
| Etr | Cost savings from retired integration technologies | $90,000 $90,000 | $135,000 $135,000 | $180,000 $180,000 | $405,000 $405,000 | $328,625 $328,625 |
| Total benefits (risk-adjusted) | $364,626 $364,626 | $560,321 $560,321 | $791,240 $791,240 | $1,716,187 $1,716,187 | $1,389,023 $1,389,023 | |
Incremental Profit Contribution
Evidence and data. Interviewees’ organizations used the Celigo integration platform to improve both business operations and the ways in which their organizations serve their customers through new integrations for internal systems, improved data exchange with partners, new workflow automations, and improved access to data and insights. For interviewees, these improvements — targeted to better meet the needs of their internal and external customers — resulted in incremental revenue for their organizations.
- Interviewees from a technology company said a majority of the company’s revenue occurs during the quarter they call “Superbowl season.” According to the EVP, “We cannot have our systems fail during this time.” The CTO explained: “In the past, there were instances where an order was placed, but the customer didn’t receive it, so they cancelled. Or we shipped an order but didn’t charge the customer correctly. We were experiencing issues in every stage of order to cash, and each issue represents a loss of revenue.” After adopting Celigo’s platform, the interviewees saw an immense reduction in this issue.
- The CTO went on to explain that Celigo played a key role in increasing efficiency with B2B customers as well: “Our partners are huge businesses with numerous distribution centers around the world. But with Celigo, we can have integrations with the ERP system at each warehouse. As such, we can get our products into our partners’ hands proactively and to the right location based on the real-time data we receive and the data reports we’re able to create using the Celigo platform. And frankly, our B2B business saw the biggest benefit because it was experiencing the biggest issues.”
- In a similar vein, the director of enterprise applications shared that their retail organization experienced much smoother and faster data flows once it started creating integrations using the Celigo platform. The interviewee stated: “With our old e-commerce platform and our old integration tools, there were delays in, for instance, getting orders from our e-commerce platform into our ERP system. Our tools couldn’t keep up with our business. Especially on days like Black Friday, we could be days behind in getting orders in. And because we didn’t have an accurate view of our inventory, we would sometimes undersell or overpromise, both situations resulting in a loss of revenue. Having the Celigo platform has allowed us to dramatically reduce issues like these. Orders flow through the system in milliseconds.”
- The same interviewee credited the Celigo platform for enabling the organization to launch new products and revenue streams faster than it would have been able to otherwise, explaining: “By using the Celigo platform, we were able to design an entire business process that worked for us for order online and pick up in-store. And we were able to set it up ourselves. We were never able to do either of those things with our prior setup.” They said about 40% of the organization’s revenue runs through the Celigo platform.
Modeling and assumptions. For the composite organization, Forrester assumes:
- The composite organization generates $200 million in revenue annually.
generates $0 in revenue annually.
- In Year 1, the improvement in integrations, flows, and connected data as a result of using the Celigo platform affects 10% of the organization’s revenue. This grows to 30% by Year 3 as adoption and usage of the Celigo platform expands to more endpoints and users throughout the organization.
might see 0% of its revenue affected as a result of using the Celigo platform in Year 1. This might grow to 0% by Year 3 as adoption and usage of the Celigo platform expands throughout the organization.
- The composite organization realizes a 3% increase in revenue within these revenue streams attributable to the Celigo platform.
might realize a 3% increase in revenue within these revenue streams attributable to the Celigo platform.
- The composite organization’s operating margin is 10%.
might have a 10% operating margin.
Risks. Incremental profit contribution may vary depending on the following:
- An organization’s annual revenue and the number of direct revenue-impacting integrations and flows developed with the Celigo platform.
- An organization’s integration and data flow practices prior to implementing the Celigo platform.
- The skill sets of employees whose workdays are affected by efficiencies created using the Celigo platform and their ability to derive value from those efficiencies.
- An organization’s operating margin.
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 $246,000.
For , this benefit might have a three-year, risk-adjusted total PV of .
Incremental Profit Contribution
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| A1 | Annual revenue | CompositeComposite | $200,000,000 $200,000,000 | $200,000,000 $200,000,000 | $200,000,000 $200,000,000 | |
| A2 | Percent of revenue affected by Celigo | InterviewsScaled for | 10%10% | 20%20% | 30%30% | |
| A3 | Additional revenue secured as a result of integration initiatives with Celigo | Interviews | 3%3% | 3%3% | 3%3% | |
| A4 | Operating margin | CompositeTEI case study | 10%10% | 10%10% | 10%10% | |
| At | Incremental profit contribution | A1*A2*A3*A4 | $60,000 $60,000 | $120,000 $120,000 | $180,000 $180,000 | |
| Risk adjustment | ↓15% | |||||
| Atr | Incremental profit contribution (risk-adjusted) | $51,000 $51,000 | $102,000 $102,000 | $153,000 $153,000 | ||
| Three-year total: $306,000 $306,000 | Three-year present value: $245,612 $245,612 | |||||
Integration Development Cost Avoidance
Evidence and data. Interviewees’ organizations experienced both faster delivery timelines and reductions in the cost of resources needed to deploy integrations and BPA flow projects. Interviewees attributed this to the low-code development environment of the Celigo platform, which enables both technical and business users to perform integrations and BPA flows; Celigo’s library of prebuilt processes; and the reusability of developed components.
- The IT director from a retail organization reported 50% faster development timelines when using the Celigo platform to create complex integrations and process automation flow projects. They considered about 80% of its integrations and flow projects to be complex.
- The VP of IT at a pharmaceuticals organization shared: “We no longer have to outsource integration work to developers because the Celigo platform makes it so easy. Our lower-level engineers can deploy new integrations within days and weeks rather than weeks and months.”
- An interviewee said that their technology organization was able to create more than 100 flows in less than six months.
- Several interviewees from multiple organizations noted that they were able to start involving business users in the integration and flow creation process as time went on and democratize integration and process automation across the organization.
Modeling and assumptions. For the composite organization, Forrester assumes:
- The composite organization implements 20 integration/flow projects in Year 1 of using the Celigo platform. As the success of projects becomes known across the organization, there is a steady increase in demand for new projects in the following years.
might implement 0 integration/flow projects in Year 1 of using the Celigo platform, increasing to 0 projects by Year 3.
- 60% of the projects are complex, involving initial integrations or flows to new applications where there may be extract, transform, and load (ETL) processes; intricate mapping; or high manipulation of data.
- Previously, a typical complex project required two IT FTEs and an average of 30 days to be completed.
- With the Celigo platform, the same IT staff are able to complete the project 50% faster.
With the Celigo platform, IT staff at might be able to complete complex projects 50% faster.
- The average fully burdened annual salary of an IT FTE is $120,000.
- The remaining 40% of projects are noncomplex, meaning that 1) there is straightforward mapping between two applications or 2) certain components from a similar process that is already in place may be copied.
- Previously, a typical noncomplex project required one IT FTE and an average of four days to be completed.
- With the Celigo platform, the composite organization can complete a project 40% faster in Year 1, and the average project duration decreases by 70% by Year 3 as the reusability of components and internal user knowledge on the platform’s capabilities increase. Additionally, the organization transitions the role of executing noncomplex projects to business users by Year 2.
With the Celigo platform, might be able to complete a noncomplex project 40% faster in Year 1, and the average project duration might decrease by 70% by Year 3.
- The average fully burdened annual salary of a business user FTE is $83,200.
Risks. Integration development cost avoidance may vary depending on the following:
- The size, scope, number, and complexity of projects being implemented.
- The available capacity and skill set of the IT and business personnel working on projects.
- The salaries of FTEs.
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 $458,000.
For , this benefit might have a three-year, risk-adjusted total PV of .
Integration Development Cost Avoidance
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| B1 | New integration/platform flow projects with Celigo | CompositeScaled for | 2020 | 2525 | 3030 |
| B2 | Complex integration/platform flow projects with Celigo | B1*60% | 1212 | 1515 | 1818 |
| B3 | IT FTEs required to complete a typical complex integration project | Interviews | 22 | 22 | 22 |
| B4 | Average project duration without Celigo (days) | Interviews | 3030 | 3030 | 3030 |
| B5 | Percent reduction in average project duration with Celigo | Interviews | 50%50% | 50%50% | 50%50% |
| B6 | Fully burdened annual salary for an IT FTE | CompositeTEI case study | $120,000 $120,000 | $120,000 $120,000 | $120,000 $120,000 |
| B7 | Subtotal: Cost avoidance, complex integration/platform flow projects | B2*B3*B4*B5*(B6/260 days) | $166,154 $166,154 | $207,692 $207,692 | $249,231 $249,231 |
| B8 | Noncomplex integration/platform flow projects with Celigo | B1*40% | 88 | 1010 | 1212 |
| B9 | FTEs required to complete a typical noncomplex integration project | Interviews | 11 | 11 | 11 |
| B10 | Average project duration without Celigo (days) | Interviews | 44 | 44 | 44 |
| B11 | Percent reduction in average project duration with Celigo | Interviews | 40%40% | 50%50% | 70%70% |
| B12 | Fully burdened annual salary for an FTE associated with completing a typical noncomplex integration project prior to implementing Celigo | CompositeTEI case study | $120,000 $120,000 | $120,000 $120,000 | $120,000 $120,000 |
| B13 | Fully burdened annual salary for an FTE associated with completing a typical noncomplex integration project after implementing Celigo | CompositeTEI case study | $120,000 $120,000 | $83,200 $83,200 | $83,200 $83,200 |
| B14 | Subtotal: Cost avoidance, noncomplex integration/platform flow projects | (B8*B9*B10*(B12/260 days))-(B8*B9*B10*(1-B11)*(B13/260 days)) | $5,908 $5,908 | $12,062 $12,062 | $17,546 $17,546 |
| Bt | Integration development cost avoidance | B7+B14 | $172,062 $172,062 | $219,754 $219,754 | $266,777 $266,777 |
| Risk adjustment | ↓15% | ||||
| Btr | Integration development cost avoidance (risk-adjusted) | $146,253 $146,253 | $186,791 $186,791 | $226,760 $226,760 | |
| Three-year total: $559,804 $559,804 | Three-year present value: $457,698 $457,698 | ||||
Reduction In Cost Of Resolving Data Errors
Evidence and data. With the Celigo platform in place, interviewees reported that the rate of errors and mistakes fell as their organizations were able to automate manual processes. This was particularly valuable for repetitive tasks where, over time, mental focus can decrease, and human errors can increase.
Additionally, interviewees lauded the Celigo platform’s AI/ML capabilities that assisted in error management, as well as the consolidated view of all integrations and flows that the Celigo platform provided. This reduced the time spent managing errors and enabled IT resources to hand off flow maintenance to less technical users.
- The IT director of a retail organization explained that their organization had seen 10 to 50 errors per month in its legacy environment. These data transfer and syncing errors could take anywhere from minutes to hours to fix, depending on error complexity. With the Celigo platform in place, the organization has reduced the number of errors by more than 50%, and a business user can resolve an issue in 30 minutes. The IT director shared, “The Celigo dashboard clearly depicts where the issues are, which speeds up the resolution process immensely.”
- The VP of IT said that their pharmaceuticals organization experienced 50 errors per month related to data changes in its legacy environment; these errors have been fully eliminated since implementing the Celigo platform. The interviewee explained: “Our old system was so archaic that if we had a new client and we didn’t add that client to the macro before running the sales process, it would error out and say, ‘We can’t find the client.’ I can’t recall having an error since the initial implementation of the Celigo platform.”
Modeling and assumptions. For the composite organization, Forrester assumes:
- In its prior environment, the composite organization experiences 25 errors resulting from data inaccuracies per month. On average it takes an IT FTE 3 hours to resolve an error.
experiences 0 data errors per month, or 0 per year. It might take an IT FTE 3 hours to resolve an error.
- The fully burdened hourly rate of an IT FTE is $58.
- After implementing the Celigo platform, the composite organization sees a 10% reduction in the number of errors in Year 1. The number of errors is reduced by 50% in Year 3 as more integrations and flow projects are implemented on the platform.
After implementing the Celigo platform, might see a 0% reduction in the number of errors in Year 1. The number of errors might be reduced by 0% in Year 3 as more integrations and flow projects are implemented.
- Additionally, the time it takes to resolve an error is reduced to 30 minutes with access to the Celigo dashboard and Celigo’s AI/ML capabilities. The organization is able to transition the role of resolving data errors to business users by Year 2.
The time it takes IT staff at to resolve an error might be reduced to 30 minutes with Celigo, and might be able to transition the role of resolving data errors to business users by Year 2.
- The hourly rate of a business user FTE is $40.
Risks. The reduction in cost from resolving data errors may vary depending on the following:
- The number and complexity of errors in an organization’s previous and current environment.
- The size and scope of adoption of the Celigo platform for integration and flow projects.
- The skill sets of affected FTEs.
- The salaries of FTEs.
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 $105,000.
For , this benefit might have a three-year, risk-adjusted total PV of .
Reduction In Cost Of Resolving Data Errors
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| C1 | Errors per month before Celigo | CompositeComposite | 300300 | 300300 | 300300 |
| C2 | Average time spent to resolve an error (hours) | Interviews | 33 | 33 | 33 |
| C3 | Fully burdened hourly rate for an IT FTE | CompositeTEI case study | $58 $58 | $58 $58 | $58 $58 |
| C4 | Subtotal: Cost of resolving errors in legacy environment | C1*C2*C3 | $52,200 $52,200 | $52,200 $52,200 | $52,200 $52,200 |
| C5 | Reduction in the number of errors with Celigo | InterviewsScaled for | 10%10% | 25%25% | 50%50% |
| C6 | Average time spent to resolve an error (hours) | Interviews | 0.50.5 | 0.50.5 | 0.50.5 |
| C7 | Fully burdened hourly rate for an IT FTE | CompositeTEI case study | $58 $58 | $40 $40 | $40 $40 |
| C8 | Subtotal: Cost of resolving errors in the Celigo environment | C1*(1-C5)*C6*C7 | $7,830 $7,830 | $4,500 $4,500 | $3,000 $3,000 |
| Ct | Reduction in cost of resolving data errors | C4-C8 | $44,370 $44,370 | $47,700 $47,700 | $49,200 $49,200 |
| Risk adjustment | ↓10% | ||||
| Ctr | Reduction in cost of resolving data errors (risk-adjusted) | $39,933 $39,933 | $42,930 $42,930 | $44,280 $44,280 | |
| Three-year total: $127,143 $127,143 | Three-year present value: $105,050 $105,050 | ||||
Business User Productivity Improvement
Evidence and data. The low-code capabilities of the Celigo platform made it easier and faster for interviewees’ organizations to build integrations and automations. The organizations used the Celigo platform to automate numerous business processes and improve business user productivity throughout the organization.
- An interviewee from a retail organization said that team members were unable to automate workflows for adding or updating inventory using the prior setup. The Celigo platform provided access to the APIs and connections needed to do so. The IT director shared: “We had to do it manually before, which meant updates could take hours. It was huge time suck and introduced the possibility of human error. Now, the process is done in real time without human intervention.”
- The VP of IT at a pharmaceutical organization said their company was able to automate processes around employee onboarding and offboarding, invoicing, and account reconciliation in the back office. Automating workflows with the Celigo platform saved employees affected by these automations 10% of their workday.
- The CTO of a technology organization shared that automation through the Celigo platform benefitted 60% of the company’s employees. The interviewee said: “These employees see 40% time savings in their workday, if not more. Previously, there were a lot of manual steps involved in processing an order from our partners, which could be thousands of units. Verifying every product, order, and line item, and making sure it was sent to the right warehouse, took a majority of these employees’ workdays. People had to come in and work on weekends. Now, these employees can spend more time forecasting and monitoring customer trends, among other activities, and they no longer need to spend extra time here on the weekends to get work done.”
- The same organization was able to avoid hiring four extra personnel during the busy season. The EVP explained: “[Previously,] we had to hire extra resources to ensure that we processed our orders in time. Automations through the Celigo platform were key here in ensuring our order process was running smoothly and we could uphold our customers’ expectations.”
- The director of enterprise applications at a retail organization said that the company saw huge benefits when it used the Celigo platform to implement automations for financial reconciliation with its brick-and-mortar stores. The interviewee said: “The process for our physical stores was very laborious and involved running reports, pulling the results in spreadsheets, and then manually assembling all the data in all the necessary applications. We use Celigo to automate some of these data flows and automatically extract data.”
Modeling and assumptions. For the composite organization, Forrester assumes:
- In the first year, 20 business users are affected by automations created using the Celigo platform. This number grows to 100 business users by Year 3 as the number of integration/flow projects created on the platform increases.
In the first year, 0 business users might be affected by automations created using the Celigo platform. This number might grow to 0 users by Year 3.
- Business users see a 5% efficiency improvement with the introduction of automation in their workflows using the Celigo platform.
Business users at might see a 5% efficiency improvement with the introduction of automation into their workflows using the Celigo platform.
- The average fully burdened annual salary of a business user FTE is $83,200.
- Forrester conservatively estimates that 50% of the total time saved per business user FTE is applied directly back to value-generating tasks. It is therefore included in the benefit calculation. Individual employees may apply additional time savings toward professional development, training, and work-life activities that were not included in the benefit analysis.
Risks. Business user productivity improvements may vary depending on the following:
- The total number of business users affected by automations built with the Celigo platform.
- The maturity of process automation before implementing the Celigo platform.
- The size, scope, and complexity of the business processes being automated.
- The salaries of FTEs.
- The percentage of productivity captured by the affected users.
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 $252,000.
For , this benefit might have a three-year, risk-adjusted total PV of .
Business User Productivity Improvement
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| D1 | Business users affected by Celigo | CompositeScaled for | 2020 | 5050 | 100100 |
| D2 | Operational efficiency improvement due to automations with Celigo | Interviews | 5%5% | 5%5% | 5%5% |
| D3 | Fully burdened annual salary for a business user FTE | CompositeTEI case study | $83,200 $83,200 | $83,200 $83,200 | $83,200 $83,200 |
| D4 | Productivity recapture | TEI methodology | 50%50% | 50%50% | 50%50% |
| Dt | Business user productivity improvement | D1*D2*D3*D4 | $41,600 $41,600 | $104,000 $104,000 | $208,000 $208,000 |
| Risk adjustment | ↓10% | ||||
| Dtr | Business user productivity improvement (risk-adjusted) | $37,440 $37,440 | $93,600 $93,600 | $187,200 $187,200 | |
| Three-year total: $318,240 $318,240 | Three-year present value: $252,038 $252,038 | ||||
Cost Savings From Retired Integration Technologies
Evidence and data. In their prior environment, several interviewees had been using multiple integration technologies to build APIs and conduct integrations. However, interviewees told Forrester that most of their organizations’ legacy tools couldn’t handle complex automations or integrations. Instead, these tools were limited to certain coding languages or a narrow group of applications.
After implementing the Celigo platform, interviewees’ organizations consolidated the number of integration technologies in place. Since the Celigo platform supports multiple types of both simple and complex integrations, including application, data, and B2B, organizations were able to sunset other technologies and centralize around Celigo.
- The EVP of a technology organization shared that, in its prior environment, the organization used five different solutions that it retired after implementing Celigo. According to the interviewee: “If the cost of our old solutions was 100%, our new cost with Celigo is 40%. And we have better functionality and tighter integrations. It’s truly a win-win for us.”
- The organization was also able to avoid the additional management burden that came with maintaining multiple systems. The CTO explained: “We needed specialized people to manage our other platforms. Now, we don’t need experts. Anyone on our IT team can log in and see what’s going on.”
- A retail organization had previously subscribed to multiple different integration solutions and, as such, had multiple resources in place for managing those solutions. Once it migrated to Celigo, it saved 70% on the overall integration setup.
Modeling and assumptions. For the composite organization, Forrester assumes:
- The composite organization spends $200,000 in total annually in license and maintenance costs for its legacy integration technologies.
spends $0 in total annually in license and maintenance costs for its legacy integration technologies.
- The organization gradually sunsets the integration tools and reallocates the associated management resources as it transitions to the Celigo platform.
might gradually sunset integration tools and reallocate the associated management resources as it transitions to the Celigo platform.
Risks. Cost savings from retired integration technologies may vary depending on the following:
- The number and types of integration technologies in place in the legacy environment.
- The rate of decommissioning the legacy environment.
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 $329,000.
For , this benefit might have a three-year, risk-adjusted total PV of .
Cost Savings From Retired Integration Technologies
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| E1 | Total cost of legacy solutions for integrations | InterviewsInterviews | $200,000 $200,000 | $200,000 $200,000 | $200,000 $200,000 |
| E2 | Percentage of legacy solutions retired after implementing Celigo | Interviews | 50%50% | 75%75% | 100%100% |
| Et | Cost savings from retired integration technologies | E1*E2 | $100,000 $100,000 | $150,000 $150,000 | $200,000 $200,000 |
| Risk adjustment | ↓10% | ||||
| Etr | Cost savings from retired integration technologies (risk-adjusted) | $90,000 $90,000 | $135,000 $135,000 | $180,000 $180,000 | |
| Three-year total: $405,000 $405,000 | Three-year present value: $328,625 $328,625 | ||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- AI benefits. Interviewees began dabbling with Celigo’s AI capabilities to simplify integration tasks and empower users with intelligent automation and decision-making tools in today’s dynamic business environment. Through features such as AI-driven predictive analytics for forecasting and optimizing data, automated error detection and resolution to improve system reliability, intelligent data mapping tools that simplify setup and maintenance, and AI-generated flow descriptions for easier documentation and knowledge transfer, organizations boosted productivity and further freed up valuable time for employees to focus on strategic initiatives.
- Reduction in excess costs. Celigo optimized cost expenditures for interviewees’ organizations by providing accurate, real-time visibility into global inventory levels. Using Celigo to access a consolidated view into inventory levels led to better planning and purchasing processes for organizations and helped them avoid over- and under-ordering. As a result, organizations reduced operational costs and experienced more efficient inventory management. The EVP at a technology organization shared: “We are a global organization; we need to know where inventory sits so we can move it efficiently. With Celigo, we can match demand with supply and ensure that we have the right skills and inventory in the right area when we need it. Before, we didn’t know anything because it was all managed in spreadsheets, and we couldn’t get anything out of the system accurately.”
-
Enhanced customer satisfaction. Access to updated pricing, inventory, listing, sales, and other
relevant information helped to heighten customer satisfaction at the
interviewees’ organizations. The CTO at a technology organization explained:
“Celigo enables us to keep our inventory levels more in sync through one
system for the whole organization. As a result, we don’t have as many issues
around listings being down or overselling products that we don’t have
inventory in. This definitely has an effect on customer experience,
satisfaction, and loyalty.”
The VP of IT from a pharmaceutical organization saw that with improved access to data and insights, the company could better meet the needs of its customers, also resulting in increased customer satisfaction. The interviewee said: “Our teams now have a 360-degree view of the customer because of the improved data tracing with Celigo. With additional knowledge about the customer and their ordering habits, we can deepen those customer relationships.”
- Faster access to data for accelerated business decisions. Celigo gave organizations access to data in a way that allows them to run their business more efficiently. The CTO at an IT organization shared: “Before Celigo, we would manually bring over a seller’s information and create biweekly sales reports. Now, with seamless integrations and the automated transfer of data, we are empowered to have a daily sales report that is accurate and up to date. This allows us to make pivots in the business world faster if we need to and run our business more efficiently.”
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement the Celigo platform and later realize additional uses and business opportunities, including:
- Continuing to involve business users. Interviewees’ organizations looked to increase involvement from business users in the integration/automation creation and management process going forward. The VP of IT of a pharmaceutical organization explained, “We wanted to get to the point where our employees in all our teams, from sales to HR to finance, become heavy Celigo users and we can fully offload the lighter integration work and ongoing monitoring to them.”
- Scalability. The Celigo platform has opened up the opportunity for continued business growth as organizations look to scale and even explore the potential of tapping into new markets. The EVP of a technology organization shared: “We definitely want to create more integrations as we continue to grow. We’re looking into other e-commerce platforms and integrating with social media platforms as well.”
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
Quantified cost data as applied to the composite
Total Costs
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Ftr | Fees to Celigo | $0 $0 | $77,000 $77,000 | $60,500 $60,500 | $88,000 $88,000 | $225,500 $225,500 | $186,116 $186,116 |
| Gtr | Implementation and ongoing management | $66,000 $66,000 | $13,200 $13,200 | $13,200 $13,200 | $13,200 $13,200 | $105,600 $105,600 | $98,826 $98,826 |
| Htr | Training costs | $0 $0 | $2,436 $2,436 | $210 $210 | $210 $210 | $2,856 $2,856 | $2,546 $2,546 |
| Total costs (risk-adjusted) | $66,000 $66,000 | $92,636 $92,636 | $73,910 $73,910 | $101,410 $101,410 | $333,956 $333,956 | $287,488 $287,488 | |
Fees To Celigo
Evidence and data. The interviewees’ organizations incurred software subscription fees for the Celigo integration platform based on the platform tier in use. Platform tiers — Standard Edition, Professional Edition, and Enterprise Edition — are based on the number of endpoint apps, platform flows, and features needs. Customers can move up editions based on organizational needs.
- An “endpoint app” is a SaaS application that is being integrated. Multiple instances count as one endpoint app.
- A “platform flow” is the data integration flow between two endpoint apps.
- Interviewees’ organizations paid an additional fee for Celigo professional services to assist with initial integrations/flows.
Modeling and assumptions. For the composite organization, Forrester assumes:
- The composite organization pays $20,000 in software subscription fees and $50,000 in professional services fees to Celigo in Year 1.
might pay $0 in software subscription fees and $0 in professional services fees to Celigo in Year 1.
- As deployment expands, the organization pays $55,000 and $80,000 in Celigo platform license fees in Years 2 and 3, respectively.
As ’s deployment expands to include more integration and flow projects, might pay $0 and $0 in Celigo platform license fees in Years 2 and 3, respectively.
Risks. Fees to Celigo may vary depending on the following:
- The number of endpoint apps and platform flows.
- Feature and organizational needs.
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 $186,000.
For , this cost might have a three-year, risk-adjusted total PV of .
Fees To Celigo
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| F1 | Subscription fees for Celigo platform | CompositeScaled for | $20,000 $20,000 | $55,000 $55,000 | $80,000 $80,000 | ||
| F2 | Celigo professional services fees | CompositeScaled for | $50,000 $50,000 | ||||
| Ft | Fees to Celigo | F1+F2 | $0 $0 | $70,000 $70,000 | $55,000 $55,000 | $80,000 $80,000 | |
| Risk adjustment | ↑10% | ||||||
| Ftr | Fees to Celigo (risk-adjusted) | $0 $0 | $77,000 $77,000 | $60,500 $60,500 | $88,000 $88,000 | ||
| Three-year total: $225,500 $225,500 | Three-year present value: $186,116 $186,116 | ||||||
Implementation And Ongoing Management
Evidence and data. Interviewees described the implementation and ongoing management of the Celigo platform as a simple and relatively minimal time investment.
- Implementation periods varied from two to six months and involved between two and six resources for planning and strategizing data flows and testing out the platform.
- IT FTEs helped monitor the solution, deploy updates, onboard new users, and ensure that continued releases were effective.
Modeling and assumptions. For the composite organization, Forrester assumes:
- Three IT FTEs dedicate 50% of their time during the initial four-month implementation process.
For , 0 IT FTEs might dedicate 50% of their time during the initial four-month implementation process.
- Two IT FTEs spend 5% of their year-over-year time managing and maintaining the solution.
For , 0 IT FTEs might dedicate 5% of their year-over-year time managing and maintaining the solution.
- The average fully burdened annual salary of an IT FTE is $120,000.
Risks. Implementation and ongoing management may vary depending on the following:
- The size, scope, and complexity of operations.
- The available capacity and skill set of teams.
- The salaries of FTEs.
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 $99,000.
For , this cost might have a three-year, risk-adjusted total PV of .
Implementation And Ongoing Management
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| G1 | IT FTE involved in implementation and ongoing management | CompositeScaled for | 33 | 22 | 22 | 22 | |
| G2 | Time dedicated by IT FTEs (months) | Interviews | 44 | 1212 | 1212 | 1212 | |
| G3 | Percentage of IT FTEs' time dedicated to implementation and ongoing management | Interviews | 50%50% | 5%5% | 5%5% | 5%5% | |
| G4 | Fully burdened annual salary for an IT FTE | CompositeTEI case study | $120,000 $120,000 | $120,000 $120,000 | $120,000 $120,000 | $120,000 $120,000 | |
| Gt | Implementation and ongoing management | G1*G2*G3*(G4/12 months) | $60,000 $60,000 | $12,000 $12,000 | $12,000 $12,000 | $12,000 $12,000 | |
| Risk adjustment | ↑10% | ||||||
| Gtr | Implementation and ongoing management (risk-adjusted) | $66,000 $66,000 | $13,200 $13,200 | $13,200 $13,200 | $13,200 $13,200 | ||
| Three-year total: $105,600 $105,600 | Three-year present value: $98,826 $98,826 | ||||||
Training Costs
Evidence and data. Interviewees’ organizations incurred minimal costs related to training for both IT and business users of the platform. According to the interviewees, it only took hours for users to become proficient using the solution.
- Some interviewees had training seats included in their contract.
- Users at other organizations played around with the solution and became proficient on the job.
Modeling and assumptions. For the composite organization, Forrester assumes:
- Four IT FTEs are onboarded onto the Celigo platform in Year 1. It takes them 10 hours to become proficient in using the solution for the complexity of the integrations/flows they are performing and monitoring.
For , 0 IT FTEs might be onboarded onto the Celigo platform in Year 1. It might take them 10 hours to become proficient in using the solution.
- Two business users are onboarded onto the platform over three years. It takes them 5 hours to become proficient in using the solution for the complexity of the integration they are performing and monitoring.
For , 0 business users might be onboarded onto the platform in Year 2 and 0 in Year 3. It might take them 5 hours each to become proficient in using the solution.
- The fully burdened hourly rate hourly rate of an IT FTE is $58.
- The fully burdened hourly rate hourly rate of a business user is $40.
Risks. Training costs may vary depending on the following:
- The number, skill set, and prior experience of users being trained on the Celigo platform.
- The salaries of FTEs.
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 $2,500.
For , this cost might have a three-year, risk-adjusted total PV of .
Training Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| H1 | New IT FTEs using Celigo | CompositeScaled for | 44 | 00 | 00 | |
| H2 | Hours to proficiency | Interviews | 1010 | 1010 | 1010 | |
| H3 | Fully burdened hourly rate for an IT FTE | CompositeTEI case study | $58 $58 | $58 $58 | $58 $58 | |
| H4 | New business user FTEs using Celigo | CompositeScaled for | 00 | 11 | 11 | |
| H5 | Hours to proficiency | Interviews | 55 | 55 | 55 | |
| H6 | Fully burdened hourly rate for a business user | CompositeTEI case study | $40 $40 | $40 $40 | $40 $40 | |
| Ht | Training costs | (H1*H2*H3)+(H4*H5*H6) | $0 $0 | $2,320 $2,320 | $200 $200 | $200 $200 |
| Risk adjustment | ↑5% | |||||
| Htr | Training costs (risk-adjusted) | $0 $0 | $2,436 $2,436 | $210 $210 | $210 $210 | |
| Three-year total: $2,856 $2,856 | Three-year present value: $2,546 $2,546 | |||||
Consolidated Three-Year Risk-Adjusted Metrics
Cash Flow Chart (Risk-Adjusted)
Total costs Total benefits Cumulative net benefits Initial Year 1 Year 2 Year 3-
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI and NPV for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI and NPV values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
Cash Flow Analysis (Risk-Adjusted Estimates)
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($66,000)($66,000) | ($92,636)($92,636) | ($73,910)($73,910) | ($101,410)($101,410) | ($333,956)($333,956) | ($287,488)($287,488) |
| Total benefits | $0 $0 | $364,626 $364,626 | $560,321 $560,321 | $791,240 $791,240 | $1,716,187 $1,716,187 | $1,389,023 $1,389,023 |
| Net benefits | ($66,000)($66,000) | $271,990 $271,990 | $486,411 $486,411 | $689,830 $689,830 | $1,382,231 $1,382,231 | $1,101,535 $1,101,535 |
| ROI | 383%383% | |||||
Appendix A: Total Economic Impact
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
Total Economic Impact Approach
-
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.
Appendix B: Supplemental Material
Related Forrester Research
“Announcing The Forrester Wave™: iPaaS, Q3 2023,” Forrester Research, Inc., August 22, 2023.
“Breathe New Life Into Legacy Operational Systems With Integration Best Practices,” Forrester Research, Inc., November 16, 2023.
“Integration-Platform-As-A-Service Customer Data Overview, Q4 2023,” Forrester Research, Inc., October 17, 2023.
“Leverage Integration Architecture To Resuscitate Legacy IT Systems,” Forrester Research, Inc., November 16, 2023.
“Take The First Steps Toward An Automation Fabric,” Forrester Research, Inc., May 19, 2022.
Appendix C: Endnotes
1 Source: Forrester’s Developer Survey, 2022.
2 Source: “The Integration Platform As A Service Landscape, Q2 2023,” Forrester Research, Inc., April 7, 2023.
3 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.
PDF 