A Forrester Total Economic Impact™ Study Commissioned By Revenera, April 2025
As technology companies continue to modernize and embrace new software monetization models, effective entitlement management and licensing has become increasingly critical to sustain business growth and agility in a highly competitive market. Legacy approaches often lead to inefficiencies, lost revenue potential, and delays in releasing new products into the market. Organizations need automation-driven solutions in line with modern software consumption trends that enable operational efficiency, improve compliance, and maximize revenue opportunities.
Revenera helps product executives build better products, accelerate time to value, and monetize what matters. Revenera’s solutions help software and technology companies drive top-line revenue with modern software monetization, understand usage and compliance with software usage analytics, empower the use of open source with software composition analysis, and deliver a seamless user experience — for embedded, on-premises, cloud, and SaaS products.
Revenera commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Revenera.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Revenera on their organizations.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four decision-makers with experience using Revenera. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization: a global enterprise specializing in software and technology solutions that generates $2 billion in annual revenue and has 5,000 employees.
Prior to using Revenera, the interviewees noted how their organizations struggled with fragmented manual licensing, entitlement management, and software monetization processes due to a reliance on legacy tools and, in some cases, custom in-house-built solutions. This disjointed approach limited visibility into entitlements and license and product usage; made it difficult to adapt to evolving monetization models such as subscription-based, usage-based, or consumption-based approaches; and created inefficiencies across product delivery and operational workflows. As a result, organizations faced challenges monetizing across both SaaS and on-premises environments, where licensing — defined as the process of enabling and enforcing entitlements by user, device, or usage — was critical. These limitations contributed to revenue leakage, compliance risks, and barriers to scaling more modern, flexible monetization strategies.
After the investment in Revenera, the interviewees’ organizations streamlined their licensing and entitlement management processes through a centralized platform. Key results from the investment include increased annual recurring revenue (ARR) growth, reduced revenue leakage, accelerated time to market, and greater operational efficiency. These improvements not only enhanced day-to-day operations but also positioned organizations for long-term growth and market competitiveness, ultimately improving business outcomes.
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
The representative interviews and financial analysis found that a composite organization experiences benefits of $35.62 million over three years versus costs of $6.78 million, adding up to a net present value (NPV) of $28.84 million and an ROI of 426%.
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 Revenera.
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 Revenera can have on an organization.
Interviewed Revenera stakeholders and Forrester analysts to gather data relative to Revenera.
Interviewed four people at organizations using Revenera to obtain data about costs, benefits, and risks.
Designed a composite organization based on characteristics of the interviewees’ organizations.
Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Readers should be aware of the following:
This study is commissioned by Revenera 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 Revenera.
Revenera 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.
Revenera provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Zahra Azzaoui
| Role | Industry | Region | Employees | Revenue |
|---|---|---|---|---|
| Director, R&D | Engineering technology | Multinational | 6,000 | $2.5 billion |
| Director, digital operations | Energy | Multinational | 60,000 | $25 billion |
| Product manager | Manufacturing | Multinational | 90,000 | $23 billion |
| VP, product | Cybersecurity | Multinational | 5,000 | $1 billion |
Before investing in Revenera, the interviewees’ organizations relied on fragmented, resource-intensive licensing and entitlement management processes that hindered effective monetization of both SaaS and on-prem products. Some organizations used legacy on-premises tools limited to basic license generation, with no broader entitlement management capabilities. Organizations with some level of entitlement tracking often relied on spreadsheets to manage and reuse keys, which offered limited visibility into activations or customer usage. For hardware-integrated software, organizations often gave away bundled software without standardized licensing, which complicated monetization and required custom service work for more complex products. In other cases, teams had built heavily customized internal systems — like complex CRM configurations — to manage entitlements, which created challenges for both scalability and flexibility.
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 interviewees’ organizations, 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 composite organization is a global enterprise specializing in software and technology solutions that generates $2 billion in annual revenue with 10% year-over-year growth. With a workforce of 5,000 employees, it operates across multiple industries and derives 75% of its revenue from software, while the remaining 25% comes from hardware and professional services.
As part of its long-term strategy, the organization is focused on optimizing software monetization and licensing management to ensure sustainable growth. To meet the evolving demands of its customer base, the company is refining its approach to entitlement tracking, compliance enforcement, and revenue protection. Its software portfolio consists of 85% SaaS solutions and 15% on-premises offerings. The company employs a subscription-based monetization model for 90% of its software products, offering term-based and usage-based options for both SaaS and on-prem solutions. The remaining 10% of monetization is derived from perpetual licenses for on-premises software.
Before investing in Revenera, the composite organization relied on a fragmented system of legacy licensing tools, manual entitlement management, and custom-built solutions to oversee software monetization. This fragmented approach led to revenue leakage, operational inefficiencies, and limited agility in responding to market demands. Additionally, the organization’s reliance on manual processes slowed its transition to subscription-based licensing, preventing predictable revenue growth.
To overcome these challenges, the organization seeks to invest in a centralized platform that streamlines software licensing, automates entitlement tracking, and strengthens compliance enforcement. Through this strategic initiative, the organization aims to eliminate revenue leakage, accelerate its transition to subscription-based monetization, and enhance operational agility — positioning itself for long-term scalability and competitive advantage.
Deployment characteristics. The composite organization utilizes Revenera’s Entitlement Management, Software Licensing, and Compliance Intelligence products to optimize software monetization, licensing, and compliance enforcement. It has 100 Revenera users across customer support, sales, product, and revenue operations: Customer support uses the platform to quickly access licensing data during customer interactions; sales ensures accurate entitlement verification during deal negotiations; product integrates licensing solutions to automate entitlement activation and compliance oversight; and revenue operations leverages licensing data to refine monetization strategies and improve forecasting accuracy.
To facilitate adoption, the organization follows a phased implementation approach, initially deploying Revenera for select core products before expanding usage across its broader software portfolio. The composite integrates with its existing business applications, including ERP and CRM systems to ensure that entitlement and licensing data remain synchronized across systems.
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Increased revenue from software monetization model modernization | $860,625 | $1,577,813 | $2,429,831 | $4,868,269 | $3,911,932 |
| Btr | Increased revenue from improved compliance and streamlined operations | $6,885,000 | $7,573,500 | $8,330,850 | $22,789,350 | $18,777,273 |
| Ctr | Accelerated time to market | $3,600,000 | $4,207,500 | $4,900,504 | $12,708,004 | $10,431,821 |
| Dtr | End-user efficiencies | $1,005,525 | $1,005,525 | $1,005,525 | $3,016,575 | $2,500,592 |
| Total benefits (risk-adjusted) | $12,351,150 | $14,364,338 | $16,666,710 | $43,382,198 | $35,621,618 |
Evidence and data. Interviewees shared that Revenera’s software monetization and licensing management tools were key to facilitating their organizations’ shift away from traditional, perpetual licensing models to subscription-based models. Through this transition, organizations unlocked more predictable and frequent revenue streams. Rather than relying on one-time license sales, organizations were able to roll out recurring software monetization models that were better aligned with market trends and customer usage patterns without having to rebuild their internal systems. This move helped modernize their monetization approach and paved the way for scalable, long-term growth.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. This benefit will vary among organizations based on:
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 $3.9 million.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| A1 | Total revenue | Composite | $2,000,000,000 | $2,200,000,000 | $2,420,000,000 | |
| A2 | Average percentage of revenue derived from software products | Composite | 75% | 75% | 75% | |
| A3 | Revenue from software products | A1*A2 | $1,500,000,000 | $1,650,000,000 | $1,815,000,000 | |
| A4 | Average percentage of software that is on-prem | Composite | 15% | 15% | 15% | |
| A5 | Average percentage of software revenue from perpetual licensing | Composite | 10% | 10% | 10% | |
| A6 | Average percentage of perpetual licensing revenue transitioned to subscription-based licensing with Revenera | Interviews | 30% | 50% | 70% | |
| A7 | Revenue from transitioning to subscription-based licensing | A3*A4*A5*A6 | $6,750,000 | $12,375,000 | $19,057,500 | |
| A8 | Operating margin | Composite | 15% | 15% | 15% | |
| At | Increased revenue from software monetization model modernization | A7*A8 | $1,012,500 | $1,856,250 | $2,858,625 | |
| Risk adjustment | ↓15% | |||||
| Atr | Increased revenue from software monetization model modernization (risk-adjusted) | $860,625 | $1,577,813 | $2,429,831 | ||
| Three-year total: $4,868,269 | Three-year present value: $3,911,932 | |||||
Evidence and data. Before implementing Revenera, interviewees reported significant revenue leakage due to various forms of license noncompliance — including piracy, underreported usage, and misuse of entitlements — and ineffective license tracking. Interviewees’ organizations struggled with limited visibility into software usage and license compliance and often relied on manual reviews that only surfaced major discrepancies during renewals — leaving smaller, persistent revenue drains unnoticed. Customers exceeding their paid entitlements or using demo versions beyond the allotted period frequently slipped through the cracks.
Revenera’s Compliance Intelligence, Entitlement Management, and Software Licensing solutions provided real-time insights into software usage, enabling organizations to detect noncompliance, enforce proper entitlement usage, and ensure effective license tracking and management earlier and with greater confidence. This visibility helped organizations close revenue gaps by identifying misuse and enforcing license agreements before losses escalated. Interviewees also shared that receiving license expiry notifications and leveraging automated entitlement enforcement helped prevent revenue loss by ensuring timely renewals and proactive compliance without disrupting customer relationships.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. This benefit will vary among organizations based on:
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 $18.8 million.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| B1 | Revenue from software products | A3 | $1,500,000,000 | $1,650,000,000 | $1,815,000,000 | |
| B2 | Average percentage of software revenue from subscription-based licensing | Composite | 90% | 90% | 90% | |
| B3 | Average percentage of revenue lost due to noncompliance and ineffective license tracking before Revenera | Interviews | 4% | 4% | 4% | |
| B4 | Revenue recaptured with Revenera | B1*B2*B3 | $54,000,000 | $59,400,000 | $65,340,000 | |
| B5 | Operating margin | A8 | 15% | 15% | 15% | |
| Bt | Increased revenue from improved compliance and streamlined operations | B4*B5 | $8,100,000 | $8,910,000 | $9,801,000 | |
| Risk adjustment | ↓15% | |||||
| Btr | Increased revenue from improved compliance and streamlined operations (risk-adjusted) | $6,885,000 | $7,573,500 | $8,330,850 | ||
| Three-year total: $22,789,350 | Three-year present value: $18,777,273 | |||||
Evidence and data. Before Revenera, interviewees’ organizations faced significant delays in enabling licensing and entitlement before releasing new software products to the market. These delays created bottlenecks, where products were ready but remained unsellable due to the time-consuming process of defining, generating, and enabling software licenses and entitlements. In some cases, organizations even had to delay product launches or abandon planned releases altogether because of the slow pace of licensing integrations. Organizations often spent months on manual integrations with order management systems, front-end interface development, and the creation of administrative tools for license management.
These inefficiencies slowed product launches, delayed revenue generation, and hindered businesses from quickly capitalizing on market demand. With Revenera’s automated software licensing and entitlement management, organizations were able to accelerate time to market by streamlining these previously manual processes. This allowed them to generate revenue sooner, respond to customer demands faster, and maintain a competitive edge in their industry.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. This benefit will vary among organizations based on:
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 $10.4 million.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| C1 | Percentage of software revenue attributable to new software development (rather than recurring revenue) | Composite | 10% | 10% | 10% | |
| C2 | Revenue from new software development | A3*C1 | $150,000,000 | $165,000,000 | $181,500,000 | |
| C3 | Average new product releases with licensing and entitlement management enabled with Revenera | Composite | 0.5 | 0.5 | 0.5 | |
| C4 | Average revenue per product release | C2*C3 | $75,000,000 | $82,500,000 | $90,750,000 | |
| C5 | Time to enable licensing and entitlement before Revenera (hours) | Composite | 160 | 160 | 160 | |
| C6 | Reduction in time to enable licensing and entitlement with Revenera | Interviews | 80% | 85% | 90% | |
| C7 | Time to enable licensing and entitlement per product release avoided with Revenera (hours) (rounded) | C5*C6 | 128 | 136 | 144 | |
| C8 | Average revenue impact per hour per product release | C4/C5 | $468,750 | $515,625 | $567,188 | |
| C9 | Incremental revenue from automated software licensing and entitlement management for new product releases with Revenera | C3*C7*C8 | $30,000,000 | $35,062,500 | $40,837,536 | |
| C10 | Operating margin | A8 | 15% | 15% | 15% | |
| Ct | Accelerated time to market | C9*C10 | $4,500,000 | $5,259,375 | $6,125,630 | |
| Risk adjustment | ↓20% | |||||
| Ctr | Accelerated time to market (risk-adjusted) | $3,600,000 | $4,207,500 | $4,900,504 | ||
| Three-year total: $12,708,004 | Three-year present value: $10,431,821 | |||||
Evidence and data. Interviewees’ organizations reported significant efficiency gains for their IT support, customer support, and developer teams after implementing Revenera. They shared the following regarding the impact on each role:
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. This benefit will vary among organizations based on:
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.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| D1 | IT support resources dedicated to servicing sales/support teams before Revenera | Composite | 4 | 4 | 4 | |
| D2 | Reduction in IT support resources with Revenera due to self-service | Interviews | 75% | 75% | 75% | |
| D3 | IT support resources reassigned with Revenera | D1*D2 | 3 | 3 | 3 | |
| D4 | Average fully burdened annual salary of an IT support resource | Composite | $54,000 | $54,000 | $54,000 | |
| D5 | Subtotal: IT support savings | D3*D4 | $162,000 | $162,000 | $162,000 | |
| D6 | Customer support team | Composite | 30 | 30 | 30 | |
| D7 | Time spent gathering customer data around entitlement and licensing per customer support resource per quarter (hours) | Composite | 25 | 25 | 25 | |
| D8 | Reduction in time spent gathering customer data around entitlement and licensing with Revenera | Interviews | 95% | 95% | 95% | |
| D9 | Time spent gathering customer data around entitlement and licensing avoided with Revenera (hours) | D6*D7*4*D8 | 2,850 | 2,850 | 2,850 | |
| D10 | Average fully burdened hourly rate of a customer support resource | Composite | $30 | $30 | $30 | |
| D11 | Productivity recapture | TEI methodology | 50% | 50% | 50% | |
| D12 | Subtotal: Customer support savings | D9*D10*D11 | $42,750 | $42,750 | $42,750 | |
| D13 | Developer team dedicated to custom development for entitlement management before Revenera | Composite | 6 | 6 | 6 | |
| D14 | Reduction in developer resources with Revenera | Interviews | 90% | 90% | 90% | |
| D15 | Developer resources reassigned with Revenera (rounded) | D13*D14 | 5 | 5 | 5 | |
| D16 | Average fully burdened annual salary of a developer resource | Composite | $182,500 | $182,500 | $182,500 | |
| D17 | Subtotal: Developer savings | D15*D16 | $912,500 | $912,500 | $912,500 | |
| Dt | End-user efficiencies | D5+D12+D17 | $1,117,250 | $1,117,250 | $1,117,250 | |
| Risk adjustment | ↓10% | |||||
| Dtr | End-user efficiencies (risk-adjusted) | $1,005,525 | $1,005,525 | $1,005,525 | ||
| Three-year total: $3,016,575 | Three-year present value: $2,500,592 | |||||
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 multiple scenarios in which a customer might implement Revenera and later realize additional uses and business opportunities, including:
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Etr | Fees to Revenera | $0 | $1,650,000 | $1,732,500 | $1,819,125 | $5,201,625 | $4,298,554 |
| Ftr | Implementation costs | $1,204,434 | $726,831 | $459,228 | $0 | $2,390,493 | $2,244,717 |
| Gtr | Ongoing management effort and training | $54,600 | $72,503 | $72,503 | $72,503 | $272,108 | $234,903 |
| Total costs (risk-adjusted) | $1,259,034 | $2,449,334 | $2,264,231 | $1,891,628 | $7,864,226 | $6,778,174 |
Evidence and data. Interviewees reported that their organizations paid annual fees to Revenera based on a revenue-tiered licensing model tied to their software product revenue. Pricing was set upfront and remained fixed over the typical three-year agreement term.
They described Revenera’s cost structure as a scalable model that aligned with business growth over time: As software revenue increased year over year, future contract tiers adjusted accordingly. Interviewees noted that this structure provided cost predictability and helped ensure that licensing usage stayed aligned with the benefits their organizations realized from Revenera.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. This benefit will vary among organizations based on:
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 $4.3 million.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| E1 | Annual licensing cost | Composite | $1,500,000 | $1,575,000 | $1,653,750 | ||
| Et | Fees to Revenera | E1 | $0 | $1,500,000 | $1,575,000 | $1,653,750 | |
| Risk adjustment | ↑10% | ||||||
| Etr | Fees to Revenera (risk-adjusted) | $0 | $1,650,000 | $1,732,500 | $1,819,125 | ||
| Three-year total: $5,201,625 | Three-year present value: $4,298,554 | ||||||
Evidence and data. Interviewees described their organizations’ implementation of Revenera as a land-and-expand approach, beginning with a few core products and gradually expanding across the product portfolio once they established the foundational infrastructure. Organizations paid Revenera’s professional services fee for initial rollout planning, product configuration, and training during the onboarding process. This fee covered the initial setup and helped streamline the integration of Revenera into existing systems.
The initial focus was on integrating business systems and applications, configuring licensing models, and automating entitlement processes. During this phase, organizations collaborated across three key teams:
Once the foundational infrastructure was in place, future product rollouts required a significantly smaller time investment.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. This benefit will vary among organizations based on:
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 $2.2 million.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| F1 | Revenera professional services fee | Composite | $200,000 | ||||
| F2 | Developer resources involved in implementation | Composite | 4 | 4 | 4 | ||
| F3 | Average percentage of developer resource time spent on implementation | Interviews | 100% | 75% | 50% | ||
| F4 | Average fully burdened annual salary of developer resource | D16 | $182,500 | $182,500 | $182,500 | ||
| F5 | Revenue operations resources involved in implementation | Composite | 2 | 2 | 2 | ||
| F6 | Average percentage of revenue operations resource time spent on implementation | Interviews | 60% | 40% | 20% | ||
| F7 | Average fully burdened annual salary of revenue operations resources, blended | Composite | $108,000 | $108,000 | $108,000 | ||
| F8 | IT resources involved in implementation | Composite | 2 | 2 | 2 | ||
| F9 | Average percentage of IT resource time spent on implementation | Interviews | 60% | 40% | 20% | ||
| F10 | Average fully burdened annual salary of IT resource | Composite | $72,900 | $72,900 | $72,900 | ||
| F11 | Subtotal: Implementation effort | (F2*F3*F4)+(F5*F6*F7)+(F8*F9*F 10) | $947,080 | $692,220 | $437,360 | ||
| Ft | Implementation costs | F1+F11 | $1,147,080 | $692,220 | $437,360 | $0 | |
| Risk adjustment | ↑5% | ||||||
| Ftr | Implementation costs (risk-adjusted) | $1,204,434 | $726,831 | $459,228 | $0 | ||
| Three-year total: $2,390,493 | Three-year present value: $2,244,717 | ||||||
Evidence and data. Interviewees indicated that the ongoing management of Revenera required consistent but relatively low effort across developer and IT teams. Activities included maintaining infrastructure, managing system updates, handling troubleshooting, and ensuring that the platform remained integrated and aligned with business needs. Interviewees also mentioned collaborating with Revenera’s support team to help resolve technical issues as they arose.
Interviewees shared that training requirements for Revenera were minimal. Most users did not need more than two days of training to become proficient in core tasks such as entitlement management, license activation, and reporting. Training was typically concentrated around initial onboarding, with smaller waves of new users trained over time to accommodate organizational growth or role changes.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Risks. This benefit will vary among organizations based on:
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 $235,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| G1 | Developer resources dedicated to ongoing management | Composite | 1 | 1 | 1 | ||
| G2 | Average fully burdened hourly rate of developer resource | D16 | $182,500 | $182,500 | $182,500 | ||
| G3 | IT resources dedicated to ongoing management | Composite | 1 | 1 | 1 | ||
| G4 | Average fully burdened hourly rate of IT resource | F10 | $72,900 | $72,900 | $72,900 | ||
| G5 | Average percentage of time spent on ongoing management | Interviews | 25% | 25% | 25% | ||
| G6 | Subtotal: Ongoing management effort | (G1*G2*G5)+(G3*G4*G5) | $63,850 | $63,850 | $63,850 | ||
| G7 | Total Revenera users requiring training | Composite | 100 | 10 | 10 | 10 | |
| G8 | Average time spent on training (hours) | Interviews | 10 | 10 | 10 | 10 | |
| G9 | Average fully burdened hourly rate of user, blended | Composite | $52 | $52 | $52 | $52 | |
| G10 | Subtotal: Training costs | G7*G8*G9 | $52,000 | $5,200 | $5,200 | $5,200 | |
| Gt | Ongoing management effort and training | G6+G10 | $52,000 | $69,050 | $69,050 | $69,050 | |
| Risk adjustment | ↑5% | ||||||
| Gtr | Ongoing management effort and training (risk-adjusted) | $54,600 | $72,503 | $72,503 | $72,503 | ||
| Three-year total: $272,108 | Three-year present value: $234,903 | ||||||
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($1,259,034) | ($2,449,334) | ($2,264,231) | ($1,891,628) | ($7,864,226) | ($6,778,174) |
| Total benefits | $0 | $12,351,150 | $14,364,338 | $16,666,710 | $43,382,198 | $35,621,618 |
| Net benefits | ($1,259,034) | $9,901,817 | $12,100,107 | $14,775,083 | $35,517,972 | $28,843,444 |
| ROI | 426% | |||||
| Payback | <6 months |
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists solution providers in communicating their value proposition to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of business and technology initiatives to both senior management and other key stakeholders.
Benefits represent the value the solution delivers to the business. The TEI methodology places equal weight on the measure of benefits and costs, allowing for a full examination of the solution’s effect on the entire organization.
Costs comprise all expenses necessary to deliver the proposed value, or benefits, of the solution. The methodology captures implementation and 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. 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 solution providers in communicating their value proposition to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of business and technology initiatives to both senior management and other key stakeholders.
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