Inputs
Background
This interactive model is based upon the Forrester Consulting study, The Total Economic Impact of Paycom, commissioned by Paycom. Working with Paycom customers, Forrester identified and quantified key benefits of investing in Paycom including:
- Efficiency gains for payroll team
- Efficiency gains for HR and accounting
- Cost savings from consolidating legacy systems
- Paycom services
To use, move sliders or enter values to receive a high-level estimate of the economic impact based on your specific business environment. Default input values represent data from the case study.
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$3,775,648 $3,775,648
$3,775,648 3.8MYour estimated three-year benefits present value
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Results
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To contact or learn more about Paycom Beti, visit paycom.com.
Financial Summary (risk-adjusted estimates)
ROI | Payback period (months) | Total benefits (PV) | Total costs (PV) | Net present value |
---|---|---|---|---|
---- | NO INITIAL COSTS | $3,775,648 | $0 | $3,775,648 |
Cash flow analysis (risk-adjusted estimates)
Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
---|---|---|---|---|---|---|
Total costs | $0 | $0 | $0 | $0 | $0 | $0 |
Total benefits | $0 | $1,518,244 | $1,518,244 | $1,518,244 | $4,554,733 | $3,775,648 |
Net benefits | $0 | $1,518,244 | $1,518,244 | $1,518,244 | $4,554,733 | $3,775,648 |
ROI | ---- | |||||
Payback period (months) | NO INITIAL COSTS | |||||
Payback period (months) | #NULL! | |||||
$0K | $1.5M | $1.5M | $1.5M | |||
-$0K | -$0K | -$0K | -$0K | |||
Cumulative total costs | -$0 | -$0 | -$0 | -$0 | ||
Cumulative total benefits | $0 | $1,518,244 | $3,036,489 | $4,554,733 | ||
Cumulative net benefits | $0 | $1,518,244 | $3,036,489 | $4,554,733 | $0 | |
Cumulative total benefits PV | $0K | $1.4M | $2.6M | $3.8M | ||
Cumulative total costs PV | -$0K | -$0K | -$0K | -$0K | ||
Payback period (interim calculations) | 0.0 | 0.0 | 0.0 | 0.0 | NO INITIAL COSTS |
Three-year Risk-Adjusted Financial Summary
$4.6M
$3.8M
Benefits
Total Benefit
Ref. | Benefit | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|---|
Atr | Efficiency gains for payroll team | $0 | $290,274 | $290,274 | $290,274 | $870,823 | $721,869 |
Btr | Efficiency gains for HR and accounting | $0 | $193,914 | $193,914 | $193,914 | $581,742 | $482,235 |
Ctr | Cost savings from consolidating legacy systems | $0 | $923,400 | $923,400 | $923,400 | $2,770,200 | $2,296,359 |
Dtr | Paycom services | $0 | $110,656 | $110,656 | $110,656 | $331,968 | $275,185 |
Total benefits (risk-adjusted) | $0 | $1,518,244 | $1,518,244 | $1,518,244 | $4,554,733 | $3,775,648 |
$4.6M
$3.8M
Efficiency gains for payroll team
With Paycom and Beti, previously manual processes can be automated, removing payroll professionals from the repetitive payroll cycle and giving them time to work on projects that add value to the organization and employees.
Click to show/hide calculation details
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|---|---|
A1 | Fully burdened hourly salary for a payroll specialist | User input | $70 | $70 | $70 | |||
A2 | Hours per week spent on compiling and processing payroll prior to Paycom/Beti | User input | 15 | 15 | 15 | |||
A3 | Time savings on up-front data collection and payroll processing | Interviews | 90% | 90% | 90% | |||
A4 | Subtotal: Efficiency gains for initial payroll process | A2*A3*A1*52 | $49,140 | $49,140 | $49,140 | |||
A5 | Hours per week spent reviewing and correcting payroll errors prior (punch change requests, time off changes, etc.) | Based on user inputs | 100 | 100 | 100 | |||
A6 | Time savings reviewing and correcting Payroll errors | Interviews | 85% | 85% | 85% | |||
A7 | Subtotal: Reduced number and effort to correct payroll errors | A5*A6*A1*52 | $309,400 | $309,400 | $309,400 | |||
A8 | Hours per week saved processing off-cycle checks | Based on user inputs | 5 | 5 | 5 | |||
A9 | Cost per week to re-run checks (printing and shipping) | Composite | $100 | $100 | $100 | |||
A10 | Subtotal: Avoided off-cycle checks | ((A8*A1)+A9)*52 | $23,400 | $23,400 | $23,400 | |||
A11 | Productivity recapture | Composite | 80% | 80% | 80% | |||
At | Efficiency gains for payroll team | (A4+A7+A10)*A11 | $0 | $305,552 | $305,552 | $305,552 | $916,656 | $759,863 |
Risk adjustment | 5% | |||||||
Atr | Efficiency gains for payroll team (risk-adjusted) | $0 | $290,274 | $290,274 | $290,274 | $870,823 | $721,869 | |
Atr | Three-year total | $870,823 | ||||||
Atr | Three-year present value | $721,869 | ||||||
$722K | $871K | $721,869 |
Efficiency gains for HR and accounting
HR professionals can also reap the benefits of a consolidated, single platform for HR and payroll. With Paycom, HR professionals can have a single platform to manage all aspects of the employee life cycle from onboarding and termination to benefits tracking and enrollment and employee self-service. HR professionals can also build automation to reduce manual tasks and reduce risk.
Click to show/hide calculation details
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|---|---|
B1 | Hours per week HR and accounting spend on payroll | User inputs | 25 | 25 | 25 | |||
B2 | Time savings with Paycom and Beti | Interviews | 80% | 80% | 80% | |||
B3 | Average fully burdened hourly salary for HR and accounting | A1 | $70 | $70 | $70 | |||
B4 | Subtotal: Time savings on payroll processing | B1*B2*B3*52 | $72,800 | $72,800 | $72,800 | |||
B5 | Hours per year saved on benefits and open enrollment | Based on user inputs | 650 | 650 | 650 | |||
B6 | Hours per year saved on hiring and termination | Based on user inputs | 1,001 | 1,001 | 1,001 | |||
B7 | Hours per year saved on garnishments and taxes | Based on user inputs | 200 | 200 | 200 | |||
B8 | Hours per year saved on employee questions and self-service (HR Service Delivery) | Based on user inputs | 754 | 754 | 754 | |||
B9 | Total hours saved | B5+B6+B7+B8 | 2,605 | 2,605 | 2,605 | |||
B10 | Average fully burdened hourly salary for HR and accounting | A1 | $70 | $70 | $70 | |||
B11 | Subtotal: Time savings - HR team | B9*B10 | $182,350 | $182,350 | $182,350 | |||
B12 | Productivity recapture | Composite | 80% | 80% | 80% | |||
Bt | Efficiency gains for HR and accounting | (B4+B11)*B12 | $0 | $204,120 | $204,120 | $204,120 | $612,360 | $507,616 |
Risk adjustment | 5% | |||||||
Btr | Efficiency gains for HR and accounting (risk-adjusted) | $0 | $193,914 | $193,914 | $193,914 | $581,742 | $482,235 | |
Btr | Three-year total | $581,742 | ||||||
Btr | Three-year present value | $482,235 | ||||||
$482K | $582K | $482,235 |
Cost savings from consolidating legacy systems
Paycom can provide a single source of truth for all payroll and HR data, and give HR and payroll professionals, along with all other employees, a single application for all payroll and HR needs. Consolidating with Paycom can reduce complexity, reduce the number of vendors and licenses in the environment, and ease the maintenance burden on IT.
Click to show/hide calculation details
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|---|---|
C1 | Number of employees | User input | 2,500 | 2,500 | 2,500 | |||
C2 | Cost of legacy payroll system(s) per employee per year | User input | $144 | $144 | $144 | |||
C3 | Cost of legacy HR system(s) per employee per year | User input | $120 | $120 | $120 | |||
C4 | Cost of other legacy system(s) (reporting, scheduling, etc.) per employee a year | Composite | $60 | $60 | $60 | |||
C5 | Legacy system(s) management costs | Composite | $162,000 | $162,000 | $162,000 | |||
Ct | Cost savings from consolidating legacy systems | C1*(C2+C3+C4)+C5 | $0 | $972,000 | $972,000 | $972,000 | $2,916,000 | $2,417,220 |
Risk adjustment | 5% | |||||||
Ctr | Cost savings from consolidating legacy systems (risk-adjusted) | $0 | $923,400 | $923,400 | $923,400 | $2,770,200 | $2,296,359 | |
Ctr | Three-year total | $2,770,200 | ||||||
Ctr | Three-year present value | $2,296,359 | ||||||
$2.3M | $2.8M | $2.3 million |
Paycom services
Paycom provides customers with a dedicated customer representative who can provide 1-on-1 assistance and make sure the customers' needs for Paycom are being met. The Paycom specialist can help with initiatives such as building out additional automation or custom reporting capabilities and with troubleshooting issues.
Click to show/hide calculation details
Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
---|---|---|---|---|---|---|---|---|
D1 | Dedicated Paycom specialist | TEI case study | 1 | 1 | 1 | |||
D2 | Value delivered to customers | Interviews | 80% | 80% | 80% | |||
D3 | Fully burdened salary for HR/Payroll specialist | A1*2,080 | $145,600 | $145,600 | $145,600 | |||
Dt | Paycom services | D1*D2*D3 | $0 | $116,480 | $116,480 | $116,480 | $349,440 | $289,669 |
Risk adjustment | 5% | |||||||
Dtr | Paycom services (risk-adjusted) | $0 | $110,656 | $110,656 | $110,656 | $331,968 | $275,185 | |
Dtr | Three-year total | $331,968 | ||||||
Dtr | Three-year present value | $275,185 | ||||||
$275K | $332K | $275,185 |
Settings
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03 Oct 2017 16:00 GMT
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Discount Rate
Methodology
Background
This interactive model is based upon the Forrester Consulting study, The Total Economic Impact of Paycom, commissioned by Paycom. Working with Paycom customers, Forrester identified and quantified key benefits of investing in Paycom including:
- Efficiency gains for payroll team
- Efficiency gains for HR and accounting
- Cost savings from consolidating legacy systems
- Paycom services
Default input values represent data from the case study.
The following Paycom customers were interviewed for the study.
Role | Industry | Region | Number of Employees |
---|---|---|---|
Payroll director | Manufacturing | USA | 583 |
VP of total rewards and systems | Consumer Services | North America | 3,300 |
Payroll manager | Consumer Services | North America | 2,000 |
VP of payroll | Healthcare | North America | 2,100 |
VP of HR | Healthcare | North America | 2,100 |
Tool Methodology
Forrester used the following methodology to develop this tool:
- Forrester gathered data from existing Forrester research relative to Paycom Beti and the market in general.
- Forrester interviewed Paycom marketing and strategy personnel to fully understand the value proposition of Paycom Beti.
- Forrester interviewed Paycom Beti customers as the basis for the data in this model.
- Forrester constructed a financial model.
- Forrester constructed this calculator based on the model in the associated study and in accordance with Forrester and TEI standards. Forrester’s aim is to clearly show all calculations and assumptions used in the analysis.
Disclaimer
Paycom commissioned Forrester Consulting to develop this business case model in June 2023 using its proprietary Total Economic Impact™ methodology. The intent is for Paycom to guide prospects through the questionnaire in order to solicit inputs specific to their business. Paycom is not permitted to change the calculations or equations. Forrester believes that this analysis is representative of what companies may achieve based on the inputs provided and any assumptions made. Forrester does not endorse Paycom or its offerings.
Although great care has been taken to ensure the accuracy and completeness of this model, Paycom and Forrester Research are unable to accept any legal responsibility for any actions taken on the basis of the information contained herein. The tool is provided ‘AS IS,’ and Forrester and Paycom make no warranties of any kind.
Disclosures
The reader should be aware of the following:
- This interactive tool is commissioned by Paycom and delivered by the Forrester Consulting group.
- Paycom reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the calculator and its equations and did not accept changes that contradicted Forrester’s findings or obscured the meaning of the calculations.
- The customer names for the interviews in the associated study were provided by Paycom.
- Forrester makes no assumptions as to the potential return on investment that organizations will receive. See the Disclaimer section.
- This interactive tool is not meant to be used as a competitive product analysis.
TEI methodology
TEI not only measures costs and cost reduction (areas that are typically accounted for within IT) but also weighs the enabling value of a technology in increasing the effectiveness of overall business processes. For this calculator, Forrester employed four fundamental elements of TEI in modeling the financial impact of producing a TEI study: 1) cost and cost reduction, 2) benefits to the entire organization, 3) risk, and 4) flexibility. Given the increasing sophistication of IT investment cost analyses, Forrester’s TEI methodology serves an extremely useful purpose by providing a complete picture of the total economic impact of purchase decisions.
Glossary
Financial discount rate | The interest rate used in cash flow analysis to take into account the time value of money. Companies set a discount rate based on their business and investment environment. Forrester assumes a yearly discount rate of 10% for this analysis. Organizations typically use discount rates between 8% and 16% based on their current environment. Readers are urged to consult their respective organization to determine the most appropriate discount rate to use in their own environment. |
Net present value (NPV) | The present or current value of (discounted) future net cash flows given an interest rate (the discount rate). A positive project NPV normally indicates that the investment should be made, unless other projects have higher NPVs. |
Present value (PV) | The present or current value of (discounted) cost and benefit estimates given at an interest rate (the discount rate). The PV of costs and benefits feed into the total net present value of cash flows. |
Return on investment (ROI) | A measure of a project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits minus costs) by costs. |
Risk-adjusted | Forrester risk-adjusts cost and benefit estimates to better reflect the level of uncertainty that exists in real-life business scenarios but not necessarily captured in traditional business cases. If a risk-adjusted ROI still demonstrates a compelling business case, it raises confidence that the investment is likely to succeed because the risks that threaten the project have been taken into consideration and quantified. In general, risks affect costs by raising the original estimates, and they affect benefits by reducing the original estimates. |
Payback period | The breakeven point for an investment. The point in time at which net benefits (benefits minus costs) equal initial investment or cost. |
Variables
A Forrester Total Economic Impact™ Tool Commissioned By Paycom
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