A FORRESTER TOTAL ECONOMIC IMPACT ™ STUDY COMMISSIONED BY ESKO, OCTOBER 2024
Speed to market while maintaining compliance requirements for packaging is a crucial standard that CPG and life sciences organizations must meet to stay ahead in a competitive landscape. Without a standardized, transparent, governed workflow supporting artwork management and packaging development processes, optimal quality control can fall through the gaps, and CPG and life sciences organizations can waste time and money.
Esko WebCenter is a packaging and artwork management solution that allows organizations to control the quality and accuracy of packaging and label assets from a single source throughout the lifecycle of the artwork creation and distribution — from briefing to print-ready file.
Esko commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying WebCenter.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of WebCenter on their organizations.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed five representatives of four organizations with experience using Esko WebCenter. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a $10 billion CPG organization focused on selling household goods and personal care items. It operates globally with 60,000 employees, of which 250 employees are involved globally in product packaging and artwork processes. On average, the organization runs 2,000 product packaging development projects annually.
has an annual revenue of . employees are involved globally in product packaging and artwork processes. Custom results are based on user inputs and the TEI case study.
Interviewees said that prior to using WebCenter, their organizations’ packaging development and artwork management processes were manual and fragmented with loose governance in place. Projects were susceptible to a loss of momentum with a lack of workflow visibility and limited root cause identification heavily contributing to delays and bottlenecks.
Typically, the organizations lacked control over the packaging development process due to the involvement of multiple external suppliers and the siloed contributions of internal stakeholders, all of which was underpinned by the use of different solutions that further exacerbated fragmentation. These limitations not only engendered packaging development processes without a central asset repository and common KPIs, but they also led to environments without the data needed to help optimize the process to circumvent common delays.
Interviewees said that after the investment in WebCenter, their organizations achieved unparalleled understanding of the packaging workflow and artwork management process. They explained that WebCenter enabled the introduction of a visible accountability framework that subsequently provided governance and transparency into the packaging process.
Key results from the investment include efficiency gains in the product development process underpinned by stakeholder productivity gains that contributed to increased speed to market. Interviewees’ organizations were also able to consolidate their vendor footprints as they relate to packaging, which led to financial savings. Overall, the organizations benefitted from avoiding delays and reducing the probability of recalls.
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
For , this benefit might be worth over three years.
For , this benefit might be worth over three years.
For , this benefit might be worth over three years.
For , this benefit might be worth over three years.
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:
For , these costs could represent over three years.
For , these costs could represent over three years.
For , these costs could represent over three years.
For , these costs could represent over three years.
The representative interviews and financial analysis found that a composite organization experiences benefits of $5.15 million over three years versus costs of $1.52 million, adding up to a net present value (NPV) of $3.64 million and an ROI of 240%.
might experience benefits of over three years versus costs of , adding up to an NPV of and an ROI of 0%.
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 in Esko WebCenter.
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 Esko WebCenter can have on an organization.
Interviewed Esko stakeholders and Forrester analysts to gather data relative to WebCenter.
Interviewed five representatives at four organizations using WebCenter 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 modelling 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 Esko 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 WebCenter. 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 WebCenter based on the inputs provided and any assumptions made. Forrester does not endorse Esko or its offerings. Although great care has been taken to ensure the accuracy and completeness of this model, Esko 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 Esko make no warranties of any kind.
Esko 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.
Esko provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Ashleigh Cohen
Salma Hamdani
Role | Industry | Region | Revenue |
---|---|---|---|
Commodities category manager | CPG | HQ: US Region: Global |
$1B-$2B |
User project manager Packaging development manager |
Life sciences | HQ: France Region: Global |
$3B |
Senior manager, packaging graphics team | CPG | HQ: US Region: Global (Esko WebCenter use in US only) |
$40B |
Global graphics director | CPG | HQ: US Region: Global |
$50B |
Interviewees reported their organizations had manual, fragmented packaging development and artwork management processes that were often susceptible to delays due to the opaque nature of the workflows. Because stakeholders who contributed to packaging development often worked in silos, the creation of artwork was vulnerable to errors, and there were limited opportunities to expedite the process in the absence of well-governed, transparent workflows.
The interviewees noted how their organizations struggled with common challenges, including:
The interviewees’ organizations searched for a solution that could:
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 $10 billion CPG organization is primarily focused on selling household goods and personal care items. It has a worldwide operation supported by 60,000 employees, of which 250 are involved globally in product packaging development and artwork management processes. Annually, the organization averages 2,000 product packaging development projects.
has an annual revenue of . employees are involved globally in product packaging and artwork processes.
Deployment characteristics. The composite organization begins using the solution in Year 1 following a six-month implementation period. The rollout covers 100% of the 250 employees involved in product development and artwork management through the use of 70 concurrent licenses. In the first year, there’s a ramp-up period, and the organization achieves optimal use of the solution by Year 2.
The following table shows custom results for .
Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|
Atr | Productivity gains for core team members for packaging process | $1,020,600 $1,020,600 | $1,020,600 $1,020,600 | $1,020,600 $1,020,600 | $3,061,800 $3,061,800 | $2,538,081 $2,538,081 |
Btr | Productivity gains for supporting team members for packaging process | $203,553 $203,553 | $203,553 $203,553 | $203,553 $203,553 | $610,659 $610,659 | $506,206 $506,206 |
Ctr | Opportunity for revenue gain due to increased speed to market | $732,329 $732,329 | $732,329 $732,329 | $732,329 $732,329 | $2,196,986 $2,196,986 | $1,821,193 $1,821,193 |
Dtr | Cost savings through removal of processes and vendor consolidation | $60,000 $60,000 | $120,000 $120,000 | $180,000 $180,000 | $360,000 $360,000 | $288,956 $288,956 |
Total benefits (risk-adjusted) | $2,016,482 $2,016,482 | $2,076,482 $2,076,482 | $2,136,482 $2,136,482 | $6,229,445 $6,229,445 | $5,154,436 $5,154,436 | |
Evidence and data. Interviewees shared that one of the most notable benefits of using the Esko WebCenter platform is the productivity gains experienced by those heavily involved in the packaging development process. In particular, they said graphic designers and project managers (i.e., individuals whose responsibilities for the most part lie within the packaging development process) became up to 60% more efficient in their roles through the use of Esko WebCenter. Interviewees reported that such productivity gains in the packaging development cycle — from briefing to print-ready file — arose from:
Overall, each interviewee shared that the productivity gains achieved through Esko WebCenter resulted in shorter packaging development cycles. One interviewee from the CPG industry shared that their organization’s process went from 12 weeks prior to Esko WebCenter to three to four weeks with WebCenter. And another highlighted that through Esko WebCenter, their organization was able to remove two whole working weeks from its process. A representative from the life sciences organization shared that Esko WebCenter facilitated the reduction of their organization’s packaging development cycle from six months to four, resulting in time savings of 30%.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The extent to which an organization realizes this benefit can vary due to the level of effort the organization required in its previous environment to carry out the artwork management and development process.
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 $2.5 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|
A1 | Total internal people involved in product packaging development process | CompositeComposite | 250250 | 250250 | 250250 |
A2 | Graphic designers involved in product packaging development process | A1*50% | 125125 | 125125 | 125125 |
A3 | Monthly time graphic designers spent on product packaging development projects pre-Esko WebCenter (hours) | Assumption | 8484 | 8484 | 8484 |
A4 | Reduction in time taken for product packaging process due to Esko WebCenter | Interviews | 30%30% | 30%30% | 30%30% |
A5 | Productivity recapture rate | Assumption | 50%50% | 50%50% | 50%50% |
A6 | Fully burdened hourly salary for a graphic designer | TEI standard | $35 $35 | $35 $35 | $35 $35 |
A7 | Subtotal: Productivity gains for graphic designers on product packaging development due to Esko WebCenter | A2*A3*A4*A5*A6* 12 | $661,500 $661,500 | $661,500 $661,500 | $661,500 $661,500 |
A8 | Project managers involved in product packaging development process | A1*20% | 5050 | 5050 | 5050 |
A9 | Monthly time project managers spent on product packaging development projects pre-Esko WebCenter (hours) | Assumption | 105105 | 105105 | 105105 |
A10 | Fully burdened hourly salary for a project manager | TEI standard | $50 $50 | $50 $50 | $50 $50 |
A11 | Subtotal: Productivity gains for project managers on product packaging process due to Esko WebCenter | A8*A9*A10*A4*A5 *12 | $472,500 $472,500 | $472,500 $472,500 | $472,500 $472,500 |
At | Productivity gains for core team members for packaging development process | A7+A11 | $1,134,000 $1,134,000 | $1,134,000 $1,134,000 | $1,134,000 $1,134,000 |
Risk adjustment | ↓10% | ||||
Atr | Productivity gain for core team members for product packaging process (risk-adjusted) | $1,020,600 $1,020,600 | $1,020,600 $1,020,600 | $1,020,600 $1,020,600 | |
Three-year total: $3,061,800 $3,061,800 | Three-year present value: $2,538,081 $2,538,081 |
Evidence and data. Interviewees said benefits from Esko WebCenter extended beyond graphic designers and project managers to team members who support the packaging development process. Regulatory specialists, marketers and in-house lawyers all experienced productivity gains in relation to the work attributed to the packaging development process, and interviewees said these roles became up to 40% more efficient during the process due to:
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The extent to which an organization realizes this benefit can vary due to the following factors:
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 $506,000.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|
B1 | Total people involved in product packaging development process | CompositeComposite | 250250 | 250250 | 250250 |
B2 | Regulatory specialists involved in product packaging development process | B1*15% | 37.537.5 | 37.537.5 | 37.537.5 |
B3 | Monthly time regulatory specialists spent on product packaging development projects pre-Esko WebCenter (hours) | Assumption | 3535 | 3535 | 3535 |
B4 | Reduction in time taken for product packaging process due to Esko WebCenter | Interviews | 40%40% | 40%40% | 40%40% |
B5 | Productivity recapture rate | Interviews | 50%50% | 50%50% | 50%50% |
B6 | Fully burdened hourly salary for a regulatory specialist | TEI standard | $50 $50 | $50 $50 | $50 $50 |
B7 | Subtotal: Productivity gains for regulatory specialists on product packaging process pre-Esko WebCenter | B2*B3*B4*B5*B6* 12 | $157,500 $157,500 | $157,500 $157,500 | $157,500 $157,500 |
B8 | Marketing team members involved in product packaging development process | B1*10% | 3535 | 3535 | 3535 |
B9 | Monthly time marketing team members spent on product packaging development projects pre-Esko WebCenter (hours) | Assumption | 1414 | 1414 | 1414 |
B10 | Fully burdened hourly salary for a marketing team member | TEI standard | $45 $45 | $45 $45 | $45 $45 |
B11 | Subtotal: Productivity gains for marketing team members for product packaging process pre-Esko WebCenter | B8*B9*B10*B4*B5 *12 | $52,920 $52,920 | $52,920 $52,920 | $52,920 $52,920 |
B12 | In-house lawyers involved in product packaging development process | B1*5% | 12.512.5 | 12.512.5 | 12.512.5 |
B13 | Monthly time team members from the legal department spent on product packaging development projects pre-Esko WebCenter (hours) | Assumption | 77 | 77 | 77 |
B14 | Fully burdened hourly salary for a legal team member | TEI standard | $75 $75 | $75 $75 | $75 $75 |
B15 | Subtotal: Productivity gains for in-house lawyers for product packaging process pre-Esko WebCenter | B10*B11*B12*B4* B5*12 | $15,750 $15,750 | $15,750 $15,750 | $15,750 $15,750 |
Bt | Productivity gains for supporting team members for packaging process | B7+B11+B15 | $226,170 $226,170 | $226,170 $226,170 | $226,170 $226,170 |
Risk adjustment | ↓10% | ||||
Btr | Productivity gains for supporting team members for packaging process (risk-adjusted) | $203,553 $203,553 | $203,553 $203,553 | $203,553 $203,553 | |
Three-year total: $610,659 $610,659 | Three-year present value: $506,206 $506,206 |
Evidence and data. Interviewees said Esko WebCenter’s contribution to expediting the packaging development process has led to the opportunity for revenue gains for their organizations. They expressed that WebCenter has a direct impact on reducing delays within the development process and that this, in turn, has an incremental impact on getting products to market faster. This subsequently provides the opportunity to make more product sales.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The extent to which an organization realizes this benefit can vary due to the following factors:
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 $1.8 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|
C1 | Average time taken for product packaging development process pre-Esko WebCenter (days) | CompositeComposite | 6060 | 6060 | 6060 |
C2 | Time reduction in product packaging development process due to Esko WebCenter | Interviews | 30%30% | 30%30% | 30%30% |
C3 | Time gained in product packaging development process due to Esko WebCenter (days) | C1*C2 | 1818 | 1818 | 1818 |
C4 | Factor by which time saved in product packaging development process translates to additional days to sell product | Interviews | 15%15% | 15%15% | 15%15% |
C5 | Average product value | CompositeComposite | $10.0 $10.0 | $10.0 $10.0 | $10.0 $10.0 |
C6 | Average number of products sold per day | CompositeComposite | 2,739,726.02,739,726.0 | 2,739,726.02,739,726.0 | 2,739,726.02,739,726.0 |
C7 | Percentage of products involved in product packaging development process previously affected by delays | Interviews | 10%10% | 10%10% | 10%10% |
C8 | Average number of products involved in product packaging development process previously affected by delays | C6*C7 | 273,972.6273,972.6 | 273,972.6273,972.6 | 273,972.6273,972.6 |
C9 | Profit margin | AssumptionAssumption | 11%11% | 11%11% | 11%11% |
Ct | Opportunity for revenue gain due to increased speed to market | C3*C4*C5*C8*C9 | $813,699 $813,699 | $813,699 $813,699 | $813,699 $813,699 |
Risk adjustment | ↓10% | ||||
Ctr | Opportunity for revenue gain due to increased speed to market (risk-adjusted) | $732,329 $732,329 | $732,329 $732,329 | $732,329 $732,329 | |
Three-year total: $2,196,986 $2,196,986 | Three-year present value: $1,821,193 $1,821,193 |
Evidence and data. Interviewees said deploying Esko WebCenter as an enterprise solution to cover all artwork management and packaging development processes enabled their organizations to make cost savings by removing redundant tools and software.
One interviewee from a large CPG organization shared that due to adopting Esko WebCenter, their company is in the process of removing up to 50 tools globally that had supported the packaging development process. They said this will save their company between $5 million and $10 million over six years. The redundant tools covered solutions for licensing, technical platforms, workflow software, and some hardware and services.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The extent to which an organization realizes this benefit can vary due to the number of tools and services utilized in the prior environment to support artwork management and packaging development.
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 $289,000.
For , this benefit may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|
D1 | Redundant tools due to Esko WebCenter | CompositeScaled for | 1010 | 1010 | 1010 |
D2 | Average licensing cost for tools | Assumption | $30,000 $30,000 | $30,000 $30,000 | $30,000 $30,000 |
D3 | Value realization | Interviews | 25%25% | 50%50% | 75%75% |
Dt | Cost savings through removal of processes and vendor consolidation | D1*D2*D3 | $75,000 $75,000 | $150,000 $150,000 | $225,000 $225,000 |
Risk adjustment | ↓20% | ||||
Dtr | Cost savings through removal of processes and vendor consolidation (risk-adjusted) | $60,000 $60,000 | $120,000 $120,000 | $180,000 $180,000 | |
Three-year total: $360,000 $360,000 | Three-year present value: $288,956 $288,956 |
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
The value of flexibility is unique to each customer. There are scenarios in which a customer might implement WebCenter 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).
The following table shows custom results for .
Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|---|
Etr | Licensing costs | $0 $0 | $206,250 $206,250 | $506,000 $506,000 | $506,000 $506,000 | $1,218,250 $1,218,250 | $985,847 $985,847 |
Ftr | Implementation costs | $419,166 $419,166 | $0 $0 | $0 $0 | $0 $0 | $419,166 $419,166 | $419,166 $419,166 |
Gtr | Onboarding costs | $20,125 $20,125 | $0 $0 | $0 $0 | $0 $0 | $20,125 $20,125 | $20,125 $20,125 |
Htr | Ongoing costs | $0 $0 | $37,066 $37,066 | $37,066 $37,066 | $37,066 $37,066 | $111,197 $111,197 | $92,177 $92,177 |
Total costs (risk-adjusted) | $439,291 $439,291 | $243,316 $243,316 | $543,066 $543,066 | $543,066 $543,066 | $1,768,738 $1,768,738 | $1,517,315 $1,517,315 | |
Evidence and data. Licensing costs are determined by the volume of required concurrent user licenses. The costs varied greatly for interviewees’ organizations. Pricing may vary. Contact Esko for additional details.
Modeling and assumptions. Forrester assumes the following about the composite organization:
Risks. The impact of this cost can vary due to the following:
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $986,000.
For , these costs may have a three-year, risk-adjusted total PV of . Please note that these licensing costs are based on high-level estimates and do not constitute a quote.
The following table shows custom results for .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
---|---|---|---|---|---|---|---|
E1 | Licensing costs | EskoScaled for | $187,500 $187,500 | $460,000 $460,000 | $460,000 $460,000 | ||
Et | Licensing costs | E1 | $187,500 $187,500 | $460,000 $460,000 | $460,000 $460,000 | ||
Risk adjustment | ↑10% | ||||||
Etr | Licensing costs (risk-adjusted) | $0 $0 | $206,250 $206,250 | $506,000 $506,000 | $506,000 $506,000 | ||
Three-year total: $1,218,250 $1,218,250 | Three-year present value: $985,847 $985,847 |
Evidence and data. Implementation costs consist of a professional services fee and the internal effort required to deploy Esko WebCenter.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. The impact of this cost can vary due to the following 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 $419,000.
For , these costs may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|---|
F1 | Professional services fee | EskoScaled for | $282,000 $282,000 | |||
F2 | Project managers | InterviewsScaled for | 1.01.0 | |||
F3 | Time spent on project management per FTE (hours) | Interviews | 840840 | |||
F4 | Fully burdened hourly salary for a project manager | TEI standard | $50 $50 | |||
F5 | Packaging/graphics team members | InterviewsScaled for | 1.01.0 | |||
F6 | Time spent on implementation by packaging/graphics team members (hours) | Interviews | 420420 | |||
F7 | Fully burdened hourly salary for a graphics team member | TEI standard | $35 $35 | |||
F8 | Marketing team members | InterviewsScaled for | 1.01.0 | |||
F9 | Time spent during implementation by marketing team members (hours) | Interviews | 4848 | |||
F10 | Fully burdened hourly salary for a marketing team member | TEI standard | $45 $45 | |||
F11 | Regulatory team members | InterviewsScaled for | 1.01.0 | |||
F12 | Time spent during implementation by regulatory team members (hours) | Interviews | 4848 | |||
F13 | Fully burdened hourly salary for a regulatory team member | TEI standard | $50 $50 | |||
F14 | IT developers | InterviewsScaled for | 2.02.0 | |||
F15 | Time spent on implementation by IT developers (hours) | Interviews | 210210 | |||
F16 | Fully burdened hourly salary for an IT developer | TEI standard | $90 $90 | |||
Ft | Implementation costs | F1+(F2*F3*F4)+ (F5*F6*F7)+ (F8*F9*F10)+ (F11*F12*F13)+ (F14* F15* F16) | $381,060 $381,060 | $0 $0 | $0 $0 | $0 $0 |
Risk adjustment | ↑10% | |||||
Ftr | Implementation costs (risk-adjusted) | $419,166 $419,166 | $0 $0 | $0 $0 | $0 $0 | |
Three-year total: $419,166 $419,166 | Three-year present value: $419,166 $419,166 |
Evidence and data. The onboarding costs are reflective of the internal effort taken to train those using WebCenter.
Modeling and assumptions. Forrester assumes the following about the composite:
Risks. The impact of this cost can vary due to the following 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 $20,000.
For , these costs may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|---|
G1 | People who require training for Esko WebCenter | CompositeComposite | 250250 | |||
G2 | Training time (hours) | Interviews | 22 | |||
G3 | Average fully burdened hourly salary for a team member | TEI standard | $35 $35 | |||
Gt | Onboarding costs | G1*G2*G3 | $17,500 $17,500 | $0 $0 | $0 $0 | $0 $0 |
Risk adjustment | ↑15% | |||||
Gtr | Onboarding costs (risk-adjusted) | $20,125 $20,125 | $0 $0 | $0 $0 | $0 $0 | |
Three-year total: $20,125 $20,125 | Three-year present value: $20,125 $20,125 |
Evidence and data. The ongoing costs are reflective of the internal effort taken to remove redundant software, hardware, and services as a result of the investment in Esko WebCenter.
An interviewee from a large CPG organization shared that their company has removed approximately 80% of its redundant tools six years into its Esko WebCenter investment and that they expect to remove 50 tools in total.
Modeling and assumptions. Forrester assumes the following about the composite:
Risks. The impact of this cost can vary due to the following 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 $92,000.
For , these costs may have a three-year, risk-adjusted total PV of .
The following table shows custom results for .
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
---|---|---|---|---|---|---|
H1 | IT resources assigned to decommission previous tools | AssumptionScaled for | 33 | 33 | 33 | |
H2 | Time spent decommissioning tools (hours) | Assumption | 250250 | 250250 | 250250 | |
H3 | Average fully burdened hourly salary for an IT resource | Assumption | $45 $45 | $45 $45 | $45 $45 | |
Ht | Ongoing costs | H1*H2*H3 | $33,696 $33,696 | $33,696 $33,696 | $33,696 $33,696 | |
Risk adjustment | ↑10% | |||||
Htr | Ongoing costs (risk-adjusted) | $0 $0 | $37,066 $37,066 | $37,066 $37,066 | $37,066 $37,066 | |
Three-year total: $111,197 $111,197 | Three-year present value: $92,177 $92,177 |
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
The following table shows custom results for .
Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
---|---|---|---|---|---|---|
Total costs | ($439,291)($439,291) | ($243,316)($243,316) | ($543,066)($543,066) | ($543,066)($543,066) | ($1,768,738)($1,768,738) | ($1,517,315)($1,517,315) |
Total benefits | $0 $0 | $2,016,482 $2,016,482 | $2,076,482 $2,076,482 | $2,136,482 $2,136,482 | $6,229,445 $6,229,445 | $5,154,436 $5,154,436 |
Net benefits | ($439,291)($439,291) | $1,773,166 $1,773,166 | $1,533,416 $1,533,416 | $1,593,416 $1,593,416 | $4,460,707 $4,460,707 | $3,637,121 $3,637,121 |
ROI | 240%240% | |||||
Payback | <6 months<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.
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.
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.
https://mainstayadvisor.com/go/mainstay/gdpr/policy.html