The Total Economic Impact™ Of Temporal Cloud
Cost Savings And Business Benefits Enabled By Temporal Cloud
A Forrester Total Economic Impact™ Study Commissioned By Temporal, April 2025
Building durable, reliable applications and services is more important than ever as organizations recognize the impact of the customer experience on revenue.1 However, reliability has historically necessitated coding complex distributed systems which takes away focus from coding for business growth and solving business challenges. By using a durable execution platform like Temporal, organizations can experience benefits, including improved reliability, development velocity, and productivity, that enable organizations to achieve goals and drive revenue and profit with less complexity.
Temporal is an open-source durable execution platform used to drive reliability in varied use cases ranging from order management and payment processing to agentic AI. Temporal Cloud is the managed service offered by Temporal that allows organizations to quickly get started with Temporal and efficiently scale their usage. Temporal also offers professional services, a partner community, support, and a community of over 400,000 developers using Temporal.
Temporal commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Temporal Cloud.2 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Temporal Cloud on their organizations.
Return on investment (ROI)
201%
Net present value (NPV)
$2.8M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four representatives with experience using Temporal Cloud. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a global organization with $7.5 billion in revenue per year.
Interviewees said that prior to using Temporal Cloud, their organizations had various and often-sprawling homegrown systems for managing workflows that had been developed over time for operations and data use cases. However, prior attempts yielded limited success, leaving them with challenges surrounding reliability and scalability, velocity, and productivity. Their organizations also faced difficulty achieving objectives.
After the investment in Temporal Cloud, the interviewees’ organizations began managing their existing critical workflows with Temporal and added reliability to new workflows as they innovated. Key results from the investment include improved reliability, faster velocity, and enhanced productivity, allowing them to drive revenue and support organizational objectives.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- Better reliability with up to two avoided outages per year. The composite organization improves the reliability of its workflows with Temporal. This enables it to avoid downtime which, as a result, leads to additional revenue by avoiding revenue loss and provides a more positive customer experience. Over three years, this benefit is worth $14.3 million in revenue and $1.5 million in operating profit to the composite organization.
- Faster feature velocity with a 50% reduced time to market. Instead of taking three months to build a new feature, the composite organization builds new features in 1.5 months, accelerating revenue. This also results in broader benefits positively impacting the customer experience and enhancing competitive differentiation. Over three years, this benefit is worth $16.3 million in revenue and $1.7 million in operating profit to the composite organization.
- Improved developer productivity by 15%. As a result of the faster feature development and increased reliability with fewer incidents to respond to, the composite organization’s developers realize improved productivity. Its broader developer team also benefits indirectly from the work the organization does with Temporal. All the developers can then reallocate this time to further innovation driving business success. Over three years, this benefit is worth $1.0 million to the composite organization.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- Cost savings. By adopting Temporal, the composite organization can retire or reallocate some of its preexisting technology spending.
- Employee experience and retention. The composite organization delivers a better developer experience and therefore improves its employee retention rate. It also attracts interest from developers who have previously used Temporal.
- Temporal support, community, and documentation. The composite organization benefits from Temporal’s support, the broader Temporal community, including other Temporal customers, and Temporal’s technical documentation. This enables the composite to successfully implement and use Temporal adhering to best practices.
- Security, privacy, and compliance. The composite organization sees no disruption as it safely uses Temporal in compliance with regulations and privacy requirements. It maintains control of its data and Temporal does not receive or process any sensitive or personally identifiable information.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Temporal Cloud costs of $811,000. The composite organization chooses to take advantage of Temporal Cloud as opposed to self-hosting Temporal. This allows the composite to avoid cloud- or infrastructure-related costs and, more significantly, labor costs. The composite can also leverage Temporal’s Mission-Critical Support offering that offers 24/7 P0 support, a dedicated support engineer, and more. This then enables the composite’s employees to focus on productive business-related and revenue-driving workflows as opposed to managing infrastructure.
- Temporal implementation and ongoing management costs of $345,000. To successfully adopt Temporal, scale its use, and maintain the investment, the composite organization commits labor both initially and over time.
- Temporal training costs of $226,000. Similar to most new technology investments, the composite organization allots sufficient time for its developers to learn how to use Temporal to maximize the value of its investment.
The representative interviews and financial analysis found that a composite organization experiences benefits of $4.2 million over three years versus costs of $1.4 million, adding up to a net present value (NPV) of $2.8 million and an ROI of 201%.
Key Statistics
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Return on investment (ROI)
201%
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Benefits PV
$4.2M
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Net present value (NPV)
$2.8M
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Payback
14 months
Benefits (Three-Year)
Better reliability Faster feature velocity Improved developer productivity
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 Temporal Cloud.
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 Temporal Cloud can have on an organization.
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Due Diligence
Interviewed Temporal stakeholders and Forrester analysts to gather data relative to Temporal Cloud.
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Interviews
Interviewed four representatives at organizations using Temporal Cloud to obtain data about costs, benefits, and risks.
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Composite Organization
Designed a composite organization based on characteristics of the interviewees’ organizations.
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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.
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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 Temporal 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 Temporal Cloud.
Temporal 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.
Temporal provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Andrew Nadler
Drivers leading to the Temporal Cloud investment
Interviews
| Role | Industry | Employees | Revenue |
|---|---|---|---|
| Senior software engineer | Entertainment | 10,000+ | $30 billion+ |
| Engineering manager | Financial services | 10,000+ | $20 billion+ |
| Vice president of engineering | Food services | 35,000 | $7 billion |
| Senior engineering manager | Transportation | 900 | $800 million |
Key Challenges
Before Temporal, interviewees’ organizations had various and often-sprawling homegrown systems for managing workflows that had been developed over time. This included operations and data use cases, such as continuous integration and continuous delivery (CI/CD), and business processes use cases, such as orders and bookings. Interviewees’ organizations simultaneously had goals to reduce monolithic architectures and improve reliability, velocity, and productivity amidst economic pressures.
The interviewees noted how their organizations struggled with common challenges, including:
- Reliability and scalability. Before Temporal, interviewees highlighted the durability of workflows as a common pain point. The nature and impact of these reliability challenges varied depending on the use case, but interviewees commonly noted that workflows were failing, and they needed to find a new solution. Additionally, their existing systems could not scale, leading to further decreased reliability. With an operations and data use case, the senior software engineer of an entertainment organization said: “We experienced quite a few errors. Our homegrown orchestration system failed around 4% of the pipelines that were going for some kind of software delivery. … That’s a huge loss there in terms of interrupting release schedules.” With a business processes use case and a homegrown system that was growing in complexity with more use cases, the vice president of engineering at a food services organization said, “If you have some hiccups in your ordering system and you’re trying to track the flow of an order through this complex state machine, it’s very harrowing to do and it’s very easy to get wrong.”
- Velocity. Interviewees told Forrester how their organizations were challenged to build and innovate quickly before Temporal. The vice president of engineering at a food services organization said: “Yes, being afraid [to innovate was a challenge] and, also, when we did want to innovate, it [would] take longer just due to the nature of our system. We had to edit the state machine and test it. We had to potentially create new queues. That overhead ends up making what seems like relatively small feature take quite a long time.”
- Productivity. Related to velocity, interviewees discussed the productivity challenges their organizations faced without Temporal. The employees at the interviewees’ organizations were spending time focused on building scalable distributed systems instead of focusing on business logic. The senior software engineer of an entertainment organization pointed out the importance of choosing what their team should focus their efforts on, saying: “We thought this is kind of commodity class software at this point, so let’s reach for something that exists off the shelf and replatform.” Furthermore, the developer experience with these prior systems was challenging. The senior software engineer of an entertainment organization said, “We found it challenging to have a system where there’s a bifurcated development experience where you have some code and then a bunch of static configurations that stitches these different stages together.”
- Achieving organizational objectives. The interviewees also discussed how their organizations struggled to achieve the missions set out for them by their leadership. For example, the senior engineering manager of a transportation organization talked about how their team had been tasked with a mandate to contribute to and support monolith decomposition. However, they were challenged to contribute to this objective with their organization’s homegrown workflow orchestration system.
While two interviewees’ organizations used Temporal Cloud from the start of their journey, the other two interviewees’ organizations hosted Temporal themselves before adopting Temporal Cloud. The latter interviewees explained how, as early adopters of Temporal, Temporal Cloud wasn’t generally available at the start of their organizations’ journeys.
The two interviewees whose organizations self-hosted Temporal noted how their organizations struggled with common challenges, including:
- Scaling. As their organizations started to realize the increasing benefits of Temporal and expand their use, interviewees told Forrester how their organizations desired greater scale with Temporal than they could realistically achieve self-hosting on their own. In particular, the interviewees highlighted the need to scale for high-volume business events. The senior software engineer for an entertainment organization explained: “We used [a database] that has a much poorer scaling story than [a database management system] does for Temporal. We hit the maximum scale that we could get to.” The vice president of engineering for a food services organization said: “We could hit our typical order volume with our internal Temporal. We tested for the extremes, which would be [big sporting events] and [other high-burst volume days]. [Our self-hosted] Temporal couldn’t keep up with [the order volume].”
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Operating ability and costs. Related to their organizations’ needs to scale Temporal to match the scale of their businesses, the interviewees told Forrester that their organizations could not operate Temporal as efficiently or effectively as Temporal could. As their organizations realized a need to scale Temporal, the interviewees had to weigh the costs of self-hosting versus the cost of Temporal Cloud. The senior software engineer for an entertainment organization said: “We were met with a decision point. Do we spin up many Temporal clusters in this topology that we have and that increases the cost of keeping it running or do we go to Temporal Cloud where there’s theoretically less for me to do on behalf of everyone? We chose Temporal Cloud.”
The vice president of engineering for a food services organization explained their perspective on the cost advantages of Temporal Cloud, saying: “If you need to scale horizontally to this level of traffic, you need to use [a database management system]. That was a big inflection point for us because we were trying to decide if we would hire three [specialized database management system] people, so we have redundancy and expertise internally. Another issue with [the database management system] that we had was that it’s easy to scale [it up], but it’s hard to scale it back down. We were going to have to scale [it] to our peak required load levels and then they were going to remain at that level all year long even if [our business is] very bursty.”
Solution Requirements
The interviewees’ organizations searched for a solution that could:
- Offer code-first workflows and ease of use for their employees.
- Provide the performance needed to improve the reliability, velocity, and productivity of their organizations’ workflows as well as the flexibility needed for diverse use cases at scale.
- Align with their organizations’ workflows, technology used, and preferred coding languages.
- Offer support for the technology.
- Offer a managed service with consumption-based pricing allowing them to benefit from optimal scaling and performance of the solution and allowing them to avoid the challenges and costs of self-hosting.
After speaking with existing Temporal customers and a business case process evaluating multiple vendors and solutions, the interviewees’ organizations chose Temporal and began deployment.
- Two of four interviewees’ organizations self-hosted Temporal as early adopters. They then later adopted Temporal Cloud.
- Two of four interviewees’ organizations adopted Temporal Cloud.
- They used various software development kits (SDKs) and often built their own libraries to support internal adoption of Temporal.
- They typically started with one or a small number of use cases before starting to scale, migrating and modernizing more and more use cases. The number of use cases and corresponding consumption of Temporal accelerated as employees recognized the benefits of Temporal as compared to their prior homegrown solutions.
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 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, $7.5-billion organization. It starts using Temporal Cloud with nine developers directly and accelerates three features per year. This increases to 10 features with 30 developers in Year 2 and 20 features with 60 developers in Year 3.
Deployment characteristics. The composite organization begins using Temporal Cloud in Year 1, following an implementation period. It gradually scales use of Temporal Cloud to more developers and more use cases and accelerates its usage, in terms of volume, in Years 2 and 3.
Quantified benefit data as applied to the composite
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Better reliability | $87,329 | $593,836 | $1,187,671 | $1,868,836 | $1,462,478 |
| Btr | Faster feature velocity | $191,250 | $637,500 | $1,275,000 | $2,103,750 | $1,658,650 |
| Ctr | Improved developer productivity | $120,296 | $400,988 | $801,975 | $1,323,259 | $1,043,291 |
| Total benefits (risk-adjusted) | $398,875 | $1,632,323 | $3,264,646 | $5,295,844 | $4,164,419 | |
Better Reliability
Evidence and data. Interviewees told Forrester how their organizations realized better reliability with Temporal, reducing failing workflows. While each interviewees’ organization had different use cases, they articulated how improved reliability was achieved and how that led to positive business outcomes. These outcomes varied by use case but ultimately resulted in time savings and reduced downtime yielding positive customer experience and revenue impacts.
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The senior software engineer for an entertainment organization shared how much of a reliability improvement their organization had realized, saying: “We turned a 4% failure rate due to underlying errors outside of our control to one one-thousandth of a percent. It effectively removed all the external factor errors. That was a huge boon for us.” They added, “Orchestration-related incidents dropped by 10x.”
They then explained the benefits of that improved reliability, saying: “Reduction of incidents is certainly a [benefit]. We have less that we need to manage and battle harden. Replacing these bespoke tools that don’t have an industry behind them means that we can stand on the shoulders of giants. So, we have fewer incidents for the areas that Temporal is involved. Every team that’s adopted Temporal has seen an increase in reliability [including] not having to respond to as many incidents.” They continued: “Indirectly, it has an impact on public customer experience because teams are able to more reliably ship their features without some breakage, so they are able to realize fixes and new functionality more rapidly.” - The vice president of engineering for a food services organization also highlighted improved reliability, saying: “There were more outages in our old order system before Temporal. Our up time was closer to 2.5 nines back then, and we’re much closer to 3.5 nines now. [That correlates to revenue] for digital transactions.” They continued: “We’ve seen improved reliability was for payment settlements. … Whenever we were under extreme load, … it would start to take 45-plus seconds for something to execute in that queue. We broke that out into a Temporal workflow per settlement type and our settlements went to subsecond at peak load.” They added: “We are seeing less incidents. It was between 15% and 20% fewer incidents and those incidents that we used to have would also be very labor-intensive at times. When our old order system went down, we would have thousands of orders in this stuck state that then we would have to have teams spend hours hand-processing payment captures so that way the company wouldn’t lose money. Now, because both payments and orders are both run through two Temporal workflows, we could unplug those servers, those payment processors could go down, and all this keeps trucking. The number of times we’ve had to do a manual order payment reconciliation process has completely gone away.”
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The engineering manager for a financial services organization said: “Temporal has never caused [our app] an incident. There’s been 0 incidents on Temporal’s side. We have two examples of teams coming to us and saying that Temporal made them not have an incident, while all the rest of the systems were having an incident. So, we have two exact examples of mitigating obvious system outages. That says it all. All the use cases on Temporal that we have not [failed] ever.”
They explained the value of improved reliability, both directly and indirectly, saying: “For those two use cases, it’s avoided revenue loss because it was a dependency system that worked with an external company as well. There was tens to hundreds of thousands of dollars saved through those. The tangible and intangible aspects of downtime on an app like ours and in a system like ours is in the millions of dollars. I can comfortably say that no incidents on these key systems are in the realm of millions of dollars of revenue saved. Especially, some of our use cases are core within the app that transfer hundreds of thousands of dollars to millions of dollars a month. If that goes down, trust goes down. There’s a long-tail effect of bad incidents, and so I’m confident we’re in the realm of tens of millions of dollars of money preserved by [avoiding] these incidents.” -
The senior engineering manager for a transportation organization said: “The performance of Temporal and the reliability has far exceeded what we were seeing [before]. That was a huge plus.” They continued: “The moment Temporal rolled out, we no longer were having any like delays with our trips starting. 99.9% of trips were starting within the 10 to 40 seconds that the trip was supposed to start versus … 5 to 15 minutes. That was significant.” They concluded: “We haven’t had a significant incident with our workflows since implementation.”
They summarized the business impact, saying: “At its core, [the business value of reliability] is customer satisfaction. No one wants to get to their car and not be able to start the reservation. That is super frustrating for customers. Customer satisfaction is huge. There were times where ending a trip when it was supposed to end caused challenges with our billing system and caused challenges with revenue. On top of that, if there was a job specifically tied to payments and that wasn’t working as intended, then that would have a direct impact to our ability to bill for a rental.”
They concluded: “If [your business] isn’t reliable, you are going to lose money in the short term and the long term. Those figures ... are in the realm of millions of dollars and, if catastrophic, billions of dollars on the long-term horizon. So, with Temporal building that firm foundation allowing us to have increased durability, we do not have to pay that reliability tax where we have incidents, have outages, and lose our clout among our competitors.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization attributes one to two avoided outages per year to its use of Temporal as compared to its prior state.
- The composite organization averages 20 hours of downtime per outage.
- The composite organization is a $7.5 billion organization with an operating profit margin of 12%.
- The composite organization supports 5% of its revenue with Temporal Cloud in Year 1. This increases to 17% of revenue in Year 2 and 34% of revenue in Year 3.
Risks. This benefit may vary based on:
- The prior state of an organization, the corresponding opportunity for improvement in reliability, and the following improvement to reliability with Temporal. This includes the number of outages and the duration of downtime associated with those outages.
- The nature of an organization’s business and the impact that reduced reliability has. Organizations may realize different types of reliability benefits.
- The scale of an organization as well as the percentage of revenue and operating profit impacted by outages.
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 $1.5 million.
Better Reliability
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| A1 | Outages avoided with Temporal Cloud | Composite | 1 | 2 | 2 | |
| A2 | Hours of downtime per outage | Composite | 20 | 20 | 20 | |
| A3 | Subtotal: Avoided downtime with Temporal Cloud (hours) | A1*A2 | 20 | 40 | 40 | |
| A4 | Annual revenue | Composite | $7,500,000,000 | $7,500,000,000 | $7,500,000,000 | |
| A5 | Percentage of revenue supported by Temporal Cloud | Composite | 5% | 17% | 34% | |
| A6 | Subtotal: Avoided revenue loss due to avoided downtime with Temporal Cloud | A3*((A4*A5)/ 8,760 hours) | $856,164 | $5,821,918 | $11,643,836 | |
| A7 | Operating margin | Composite | 12% | 12% | 12% | |
| At | Better reliability | A6*A7 | $102,740 | $698,630 | $1,397,260 | |
| Risk adjustment | ↓15% | |||||
| Atr | Better reliability (risk-adjusted) | $87,329 | $593,836 | $1,187,671 | ||
| Three-year total: $1,868,836 | Three-year present value: $1,462,478 | |||||
Faster Feature Velocity
Evidence and data. Interviewees told Forrester that their organizations built and redesigned features more quickly with Temporal. The interviewees’ organizations’ developers were able to spend their time building features rather than building complex, scalable distributed systems. Interviewees also noted a compounding effect as their organizations used Temporal more and more. In addition to the productivity gain from this benefit, building these features more quickly resulted in a reduced time to market allowing the interviewees’ organizations to realize better customer experiences, competitive advantages, and accelerated revenue.
- The senior software engineer for an entertainment organization shared the reduced time to market that their organization had seen, saying: “[We saw a] 2x decrease in time to market. We’ve seen an overall increase in productivity.”
- The vice president of engineering for a food services organization said that their organization also realized faster time to market, which meant fewer labor hours. They stated: “[Feature delivery speed has improved] a lot. Out of 100 [new] features in a year, 30% of them touch a Temporal workflow or rely or depend on it. The cost of those that [have] feature development within the Temporal workflows is 25% or less of what it would be [without Temporal].”
- The engineering manager for a financial services organization explained how they surveyed their developers to understand how much quicker their time to market was with Temporal: “A typical productivity increase is weeks to a month of saved time. … If they are going to have a feature that was going to take them a month, it takes them a week. If they are going to have a feature that takes them three months, it takes them a month.”
- The senior engineering manager for a transportation organization explained the value of a faster time to market, saying: “The business value [of velocity] is competitive advantage through features. Not only is it that, but it’s also that you’re building foundations of complex things that are abstracted from you, so you can build more complex things on those complex things. That allows you to do greater things that have greater value for the business quicker as time goes along. We’re building a firm foundation that is allowing us to deliver bigger and better features faster that didn’t even seem possible years ago.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization accelerates new revenue-impacting features by building with Temporal Cloud. It starts with three features in Year 1. This increases to 10 features in Year 2 and 20 in Year 3.
- It took three months for the composite organization to complete a new feature before Temporal.
- With Temporal, the composite organization completes these new features in 50% of the time it previously took.
- The revenue impact of a new feature for the composite organization is $5 million per feature.
- The composite organization has an operating profit margin of 12%.
Risks. This benefit may vary based on:
- The number of features an organization accelerates with Temporal per year.
- The prior state of an organization and the scale of the features it is building, resulting in the duration it takes to build a new feature.
- The degree to which an organization can reduce its timeline to build a new feature with Temporal.
- The nature of the features an organization is building and the resulting revenue impact per feature.
- An organization’s operating profit 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 $1.7 million.
Faster Feature Velocity
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| B1 | Number of new revenue-impacting features accelerated per year with Temporal Cloud | Composite | 3 | 10 | 20 | |
| B2 | Months to complete a new feature before Temporal Cloud | Composite | 3.0 | 3.0 | 3.0 | |
| B3 | Reduced time to market with Temporal Cloud | Interviews | 50% | 50% | 50% | |
| B4 | Subtotal: Additional months of revenue impact per feature per year | B2*B3 | 1.5 | 1.5 | 1.5 | |
| B5 | Annual revenue impact per feature | Composite | $5,000,000 | $5,000,000 | $5,000,000 | |
| B6 | Subtotal: Additional revenue impact from faster feature velocity | B1*B4*(B5/12 months) | $1,875,000 | $6,250,000 | $12,500,000 | |
| B7 | Operating profit margin | Composite | 12% | 12% | 12% | |
| Bt | Faster feature velocity | B6*B7 | $225,000 | $750,000 | $1,500,000 | |
| Risk adjustment | ↓15% | |||||
| Btr | Faster feature velocity (risk-adjusted) | $191,250 | $637,500 | $1,275,000 | ||
| Three-year total: $2,103,750 | Three-year present value: $1,658,650 | |||||
Improved Developer Productivity
Evidence and data. Interviews told Forrester how their organizations’ developers were more productive. With the improved reliability due to Temporal, developers spent less time resolving incidents and could respond to any remaining incidents more quickly with greater insight. With the improved feature velocity, developers spent less time developing distributed systems. Additionally, depending on their Temporal use cases, interviewees’ organizations also saw indirect benefits for their broader developer teams. As a result of these productivity gains, the interviewees’ organizations’ developers could focus on the work that matters most to drive growth and achieve organizational goals.
- The senior software engineer for an entertainment organization explained how developers realized significant productivity gains for certain activities: “We’ve seen productivity increases [up to] tenfold depending on what they’re doing. ... [Temporal] really clarifies exactly what you need to build so, feature development is faster. ... It’s taking out an entire class of pains that engineers typically have to sync a lot of time into.”
- The vice president of engineering for a food services organization said, “Over 60 developers are 15% to 20% more productive overall if you include the incidents and feature development.”
- The engineering manager for a financial services organization said, “We went from three developers using Temporal to 200 developers using Temporal in a six-month period, and it’s grown ever since then.” They said: “We saw great developer productivity increases. We are seeing on average weeks to months of engineer time saved.” They also shared the results of an internal developer survey, saying: “Based on our last customer insights poll, 36% of users said that Temporal saved months of time implementing their feature, 9% said that Temporal saved weeks, and 18% said that it saved them days. The rest [of the responses] were either none or hard to quantify or we don’t know. Over half — up to three-quarters — [of our developers] saved time and it indexes more on more time rather than less time.”
- The senior engineering manager for a transportation organization said: “Time is money. The number of features we get per engineer has gone up. There is a cost savings there.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization begins by having nine developers directly using Temporal in Year 1. This increases to 30 developers in Year 2 and 60 in Year 3.
- The composite organization’s team also benefits from Temporal even if they aren’t using Temporal directly as the team’s direct work with Temporal lays a better foundation for the entire team. 45 developers benefit indirectly from Temporal in Year 1. This increases to 150 developers in Year 2 and 300 developers in Year 3.
- The developers directly using Temporal realize a 15% productivity improvement. The developers indirectly using Temporal realize a 1% productivity improvement.
- The fully burdened annual salary for a developer is $170,000.
- The composite organization recaptures 35% of this time savings for productive work.
Risks. This benefit may vary based on:
- The number of developers directly using Temporal within an organization and the number of developers indirectly benefiting from Temporal.
- The potential opportunity for a productivity improvement as determined by the prior state of an organization and what activities an organization’s developers are engaging in.
- The degree to which developers are using Temporal and can realize a productivity improvement.
- The fully burdened salaries of the developers.
- How any time savings is reallocated for productive work.
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 $1.0 million.
Improved Developer Productivity
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| C1 | Developers directly using Temporal | Composite | 9 | 30 | 60 | |
| C2 | Improved direct developer productivity | Interviews | 15% | 15% | 15% | |
| C3 | Direct productivity recapture rate | TEI methodology | 50% | 50% | 50% | |
| C4 | Developers indirectly benefiting from Temporal | Composite | 45 | 150 | 300 | |
| C5 | Improved indirect developer productivity | Composite | 1% | 1% | 1% | |
| C6 | Indirect productivity recapture rate | TEI methodology | 35% | 35% | 35% | |
| C7 | Fully burdened annual salary for a developer | Composite | $170,000 | $170,000 | $170,000 | |
| Ct | Improved developer productivity | (C1*C2*C3*C7)+ (C4*C5*C6*C7) | $141,525 | $471,750 | $943,500 | |
| Risk adjustment | ↓15% | |||||
| Ctr | Improved developer productivity (risk-adjusted) | $120,296 | $400,988 | $801,975 | ||
| Three-year total: $1,323,259 | Three-year present value: $1,043,291 | |||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- Cost savings. Interviewees said that their organizations were able to realize some cloud- or infrastructure-related cost savings by adopting Temporal, depending on their prior states. The vice president of engineering for a food services organization said: “We retired … syncs for all these events and puller servers and services that were pulling and handling use cases. Those were multiplied because we have our multiregion set up, so we were able to wind those down across all of that. Then all of the services that were running the state machine were wound down and all of that was replaced with just our Temporal workers that are now executing their workflows and activities.” The senior engineering manager for a transportation organization said, “[We saved] around $8,000 to $10,000 a year on some of the hardware.”
-
Employee experience and retention. Interviewees repeatedly highlighted how their organizations’ employees preferred using Temporal Cloud as compared to their prior solutions because it made the day-to-day work experience better. The engineering manager for a financial services organization said: “Temporal is very well loved in the organization. We have a very organic community of engineers who are super interested in it, care about it, and answer questions. So, we’ve seen big growth of Temporal. To put it in perspective, it’s about 300 engineers in a channel discussing Temporal that’s grown exponentially in the past two years. [We’ve received] nothing but positive developer feedback.”
Furthermore, multiple interviewees ascribed improved retention rates to this improved employee experience, which Forrester research supports.3 The senior software engineer of an entertainment organization noted, “There’s better retention.” The vice president of engineering for a foodservice organization said, “There’s a degree of developer happiness that is helping with retention.”
The senior software engineer of an entertainment organization even noted how using Temporal as a tool improved their hiring optionality as they attracted developers interested in using Temporal. They said: “We’ve had people that want to specifically apply for these teams because they are interested in Temporal. There is a community that’s very interested in working at [our organization] with Temporal. That’s increased the quality — or at least the optionality — of our hiring pipeline.”
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Temporal support, community, and documentation. The interviewees discussed how their organizations benefited from the support Temporal offered, particularly with Temporal Cloud, the documentation provided by Temporal, and the broader Temporal community. One interviewee even highlighted how another Temporal customer with a related business model helped their organization evaluate Temporal.
The vice president of engineering for a food services organization said: “Temporal provided us a solution architect as a part of our account, and it was tremendously valuable. They reviewed the code for all our early use cases and gave feedback. [The Temporal cofounder] reviewed some code and helped us solution for some of our early use cases. Then, as these new use cases came on, we got in the habit of setting up a meeting with the Temporal solution architect attached to our account to review our new use case, describe our workflow and activity design, and then get feedback and use that in our final design. That was huge. We wouldn’t have been as successful [without this support], especially because we [started with our most challenging use case].”
- Security, privacy, and compliance. Interviewees confirmed to Forrester that their organizations retained control of their data, and that Temporal did not receive any sensitive or personally identifiable information whether self-hosting Temporal or using Temporal Cloud, allowing them to remain in compliance with regulations, including privacy requirements. The vice president of engineering for a food services organization said: “Temporal provides a key server that we can apply to our workflows such that they’re end-to-end encrypted. Nobody at Temporal has access to the data that is in my workflow execution. So, if you had PII or any sensitive information that might be in these inputs or outputs for these workflows, we’re staying within compliance.”
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Temporal Cloud and later realize additional uses and business opportunities, including:
- Business and revenue scalability. Interviewees called out the degree to which their teams and organizations were able to scale and grow due to their investments in Temporal. The engineering manager for a financial services organization said, “Temporal started with [one part of our company] and it’s grown to [the company] as a whole.” Similarly, the senior software engineer for an entertainment organization said: “So, it started small. That team is 30 people that use [Temporal], and we replaced most of the orchestration that we built internally. [Temporal] has organically grown to around 30 teams at this point.” They summarized the flexibility, saying, “Yes, [we’re more scalable] in terms of personnel and technology.”
- Enabling new features and new use case expansion. Related to scalability, interviewees highlighted how their organizations were able to discover new use cases for Temporal that they didn’t originally anticipate. The senior software engineer at an entertainment organization said: “The value proposition of Temporal in that initial use case opened my eyes to [how] so many people can benefit from this. ... When we started [sharing] the benefits that we had, it started to spread across the company.” Furthermore, the adoption of use cases accelerated over time according to the interviewees. That same interviewee said: “[The use cases] started to trickle in and hockey stick from there. We’re on year five of our Temporal journey. [The] first two years [had] basically no growth. [The] third year we went to 20 use cases. [The] fourth year we landed around 60 and then this last year is about 100 use cases.”
- Supporting and accelerating company goals/initiatives. Interviewees highlighted how Temporal was able to help their organizations support and accelerate their goals, mandates, and initiatives. The senior engineering manager of a transportation organization explained: “[Our team’s] primary goal is around monolith decomposition with a general goal of getting our backend to 10-times scale. … Monolith decomposition plays into that because it allows for greater clarity of service ownership. It’s important because we have more than a 12-year-old monolith.” They concluded, “[Temporal] has added more clarity to the broader picture of what monolith decomposition looks like for us.”
- Avoided infrastructure and infrastructure operations costs with self-hosting. Interviewees that self-hosted Temporal before choosing to use Temporal Cloud told Forrester how their organizations saved on infrastructure and operations costs. The senior software engineer for an entertainment organization explained how their organization saved significantly on labor costs, saying: “I spent a week per quarter operating Temporal on-premises. I spend around a day per quarter [with Temporal Cloud].” The engineering manager for a financial services organization estimated how much labor their organization was avoiding by using Temporal Cloud instead of self-hosting Temporal, saying: “If we had to host our own Temporal, we would need a bigger team of probably four more high-level SRE [site reliability engineering] engineers. The salary and benefits would add up to around $2 million a year or more.”
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 |
|---|---|---|---|---|---|---|---|
| Dtr | Temporal Cloud costs | $0 | $240,847 | $282,506 | $477,312 | $1,000,666 | $811,040 |
| Etr | Temporal implementation and ongoing management | $252,450 | $37,400 | $37,400 | $37,400 | $364,650 | $345,458 |
| Ftr | Temporal training | $0 | $42,296 | $98,690 | $140,985 | $281,971 | $225,937 |
| Total costs (risk-adjusted) | $252,450 | $320,543 | $418,596 | $655,697 | $1,647,286 | $1,382,435 | |
Temporal Cloud Costs
Evidence and data. Each interviewee’s organization paid for Temporal Cloud, the managed service for Temporal. This allowed the interviewees’ organizations to avoid cloud- or infrastructure-related costs and labor costs. Interviewees explained how their organizations’ employees could then focus on productive business-related and revenue-driving workflows as opposed to managing infrastructure.
- Interviewees noted pricing was based on a chosen Temporal Cloud plan and Temporal Cloud consumption.
- They explained that Temporal Cloud plans included a base level of monthly Temporal Cloud consumption, support, and other platform benefits. These plans included Essentials, Business, Enterprise, and Mission-Critical levels. Pricing was as low as $100 per month.
- Temporal Cloud consumption was measured with Actions and Storage. Actions track billable operations within Temporal Cloud, such as scheduling and starting workflows and the degree of activity within a workflow. The price per million Actions started at $50 and decreased as consumption increased for the interviewees’ organizations. Storage tracked the number of gigabyte-hours (GBh) needed for Active and Retained Storage. Interviewees noted Active Storage pertains to storage used by in-progress workflows; Retained Storage pertains to storage used by completed workflows for purposes such as compliance, debugging, and analytics. The incremental consumption above that included in the base plan could be paid for on a pay-as-you-go basis or with a commitment allowing for additional discounts.
- Interviewees explained how their organizations’ Temporal Cloud consumption could vary depending on their number of use cases and workflows as well as the design and nature of those workflows. The vice president of engineering for a food services organization said: “[Our] order [workflow] might be 20 activities. Payment settlements is four or five activities, and it could be three or four activities. When we did our cart abandonment use case, it was originally coded in Temporal in a way that was really hot in terms of the Actions that it burned, and it was burning almost as many as [our] order [use case] was, which was unacceptable for us because that’s an add-on feature that’s a nice-to-have and it can’t eat up the sort of value that order is to us. So, we rearchitected that feature a few times and now we have the action count a lot lower such that we’re fine with the cost.”
- To complement Temporal Cloud, interviewees explained that Temporal also offered Jumpstart professional services to help customers adopt Temporal. Temporal also had a partner community with service partners and tech partners that customers can work with.
- Overall, the interviewees consistently evaluated that the cost of Temporal Cloud was less than the cost of self-hosting Temporal Cloud. The senior engineering manager for a transportation organization said: “As part of that pitch, we needed to do some forecasting and figure out what we wanted to estimate in terms of Actions usage, and we pulled together some numbers that we ended up sharing with our CTO and they felt comfortable with it and gave us the go-ahead on that number. That number for us was significantly less than the cost of an FTE in engineering.”
- Pricing may vary. Contact Temporal for additional details.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization selects Temporal’s Mission Critical plan at a cost of $15,000 per month or 10% of monthly consumption depending on whichever is greater.
- The composite organization uses 110 million incremental Actions per month in Year 1, 255.5 million incremental Actions per month in Year 2, and 999 million incremental Actions per month in Year 3.
- Based on the chosen plan and the number of incremental Actions per month, the average price per action is $29.40 in Year 1, $24.90 in Year 2, and $21.10 in Year 3. The composite organization makes a commitment each year to secure lower costs than pay-as-you-go pricing. It also takes advantage of Temporal’s co-marketing discount. It could realize even lower costs with a multiyear commitment.
- Proportionally, the Active Storage is 0.0001% of the Actions per month and the Retained Storage is 0.004% of the Actions per month.
- The Active Storage price per GBh is $0.039 and the Retained Storage price per GBh is $0.00105.
Risks. This cost may vary based on:
- Whether an organization chooses to self-host Temporal or use Temporal Cloud. Interviewees told Forrester that the cost of self-hosting Temporal was greater than the cost of Temporal Cloud. Those costs would include infrastructure or cloud costs and labor costs.
- The Temporal Cloud Plan an organization chooses and its cost per month. Other plan factors include the number of base Actions and Storage included in that Plan and the prices for Actions and Storage.
- Whether an organization opts for pay-as-you-go pricing or makes an annual commitment for discounted pricing.
- Whether an organization opts to participate in Temporal’s co-marketing program.
- An organization’s use of Temporal, including the number of incremental Actions per month and the incremental Active and Retained Storage used per month above and beyond the base Plan allotment. This use may vary based on the number of Temporal use cases or workflows, the complexity of those workflows, and the frequency of those workflows.
- The add-ons an organization chooses to purchase.
- The services an organization chooses to purchase, including Jumpstart services or services from a third-party Temporal partner.
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 $811,000.
Temporal Cloud Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| D1 | Temporal Cloud plan cost per month | Temporal | $15,000 | $15,000 | $15,000 | ||
| D2 | Incremental Actions per month | Composite | 110,000,000 | 255,500,000 | 999,000,000 | ||
| D3 | Average price per million Actions | Temporal | $29.40 | $24.90 | $21.10 | ||
| D4 | Incremental Active Storage per month (GBh) | Composite | 150 | 496 | 999 | ||
| D5 | Incremental Retained Storage per month (GBh) | Composite | 6,000 | 19,820 | 39,960 | ||
| D6 | Active Storage price per GBh | Temporal | $0.039 | $0.039 | $0.039 | ||
| D7 | Retained Storage price per GBh | Temporal | $0.00105 | $0.00105 | $0.00105 | ||
| D8 | Subtotal: Consumption cost per month | (D2/1,000,000)* D3)+((D4*D6)+ (D5*D7)) | $3,246 | $6,402 | $21,160 | ||
| Dt | Temporal Cloud costs | (D1+D8)*12 months | $0 | $218,952 | $256,824 | $433,920 | |
| Risk adjustment | ↑10% | ||||||
| Dtr | Temporal Cloud costs (risk-adjusted) | $0 | $240,847 | $282,506 | $477,312 | ||
| Three-year total: $1,000,666 | Three-year present value: $811,040 | ||||||
Temporal Implementation And Ongoing Management
Evidence and data. In addition to the cost of Temporal Cloud, interviewees highlighted the time their organizations committed to both implementing and enabling Temporal internally and then managing and supporting it on an ongoing basis. Interviewees also told Forrester that transitioning from self-hosting Temporal to Temporal Cloud required incremental labor but was well worth it. Both organizations that started self-hosting Temporal because Temporal Cloud wasn’t generally available yet began using Temporal Cloud once it was available. Altogether, these labor investments were critical for ensuring not only successful and quick adoptions of Temporal but also continued success and growth of use.
- Interviewees shared their organizations’ implementation and enablement journeys and timelines with Forrester. The senior software engineer at an entertainment organization that started self-hosting Temporal before switching to Temporal Cloud once it was available said: “Our first project was replacing the orchestration system for our cloud operations. That was me and one other engineer. It took me a week or so to get the Temporal service running and then it took this engineer and I about three months to get initial benefits. Then it was about another three or four months of our effort to get everything switched over. We had to replace the wheels while the car was running. If we could have just stopped things, it would have been a lot faster. [It was] 80% [of my time] and full time for the other engineer.”
- The vice president of engineering for a food services organization said: “[Adopting Temporal initially required] three engineers and then myself strongly driving it, helping with the GO code, helping with the architecture, and helping with the standing up of the original system. ... I would say full time for the three [engineers], and 20% of my time for that same period.”
- The engineering manager for a financial services organization said: “We brought on Temporal Cloud, and we instantly worked to solve a scaling problem that was causing us incidents. That was the conduit to getting the contract with Temporal and getting the buy-in. There were two engineers on that product team and one engineer from my platform team working together. It took two weeks to get the prototype working and then another week to get it deployed, tested, and observed in production.”
- The senior engineering manager for a transportation organization explained their organization’s longer labor effort as they retired their old system. They said: “For the first half of the year, it was in the range of two to three engineers, including myself at various times. When we made the decision that we were going to go all in, it would become a full team effort. That meant having around six or seven engineers working on [two workflow services]. That was the bulk of [the second half of the year].”
- Interviewees told Forrester that there was some ongoing effort required to support their organizations’ use of Temporal. This included monitoring, maintenance, and support. The senior software engineer for an entertainment organization said, “It’s 20% [of my] time to keep the lights on.”
- The vice president of engineering for a food services organization said: “There’s not a ton of [labor required to] keep Temporal up and running. [To] keep the lights on, costs are low. You could have a single developer part-time keeping an eye on everything and the metrics. We’re doing multiple deployments a week for each one of our services, so we’re constantly enhancing them.” They added: “[It requires] half a person per [team] keeping an eye on the workloads, use case, and ensuring everything is healthy. [There] are anywhere from five to six developers per [team] contributing to enhance the workflows and activities and add more features.”
- The engineering manager for a financial services organization said: “We’ve built some tooling, so there’s some initial tooling costs, but the actual day-to-day with that tooling is low.” They added: “It takes one engineer on the platform team one day of their week to keep Temporal up and running every week.”
- The senior engineering manager for a transportation organization stated: “We established a Temporal service rotation. Each member of the team spends one sprint fielding questions from other teams and running the regular maintenance required. It’s not more than one-quarter of an FTE.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- Three employees dedicate 90% of their time to implementing and enabling Temporal over six months.
- One employee dedicates 20% of their time to managing and support Temporal per year.
- The fully burdened annual salary for an engineer is $170,000.
Risks. This cost may vary based on:
- The total labor required for implementing and enabling Temporal in an organization as determined by the number of employees involved, their roles and corresponding fully burdened salaries, the duration of the implementation and enablement period, and the time those employees dedicate to these activities during that period.
- The total labor required for managing and supporting Temporal internally in an organization as determined by the number of employees involved, their roles and corresponding fully burdened salaries, and the time dedicated to managing and supporting Temporal on an ongoing basis.
- Whether an organization chooses to self-host Temporal or utilize Temporal Cloud. If an organization self-hosts Temporal, it may have higher costs for both supporting and managing Temporal.
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 $345,000.
Temporal Implementation And Ongoing Management
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| E1 | Engineers implementing and enabling Temporal | Composite | 3 | 0 | 0 | 0 | |
| E2 | Implementation and enablement duration (months) | Interviews | 6 | 0 | 0 | 0 | |
| E3 | Percentage of time dedicated to implementation and enablement | Interviews | 90% | 0% | 0% | 0% | |
| E4 | Fully burdened annual salary for an engineer | Composite | $170,000 | $170,000 | $170,000 | $170,000 | |
| E5 | Subtotal: Temporal implementation and enablement | E1*E2*E3*(E4/12 months | $229,500 | $0 | $0 | $0 | |
| E6 | Engineers managing and supporting Temporal | Composite | 0 | 1 | 1 | 1 | |
| E7 | Percentage of time dedicated to Temporal management and support | Interviews | 0% | 20% | 20% | 20% | |
| E8 | Fully burdened annual salary for an engineer | Composite | $170,000 | $170,000 | $170,000 | $170,000 | |
| E9 | Subtotal: Temporal management and support | E6*E7*E8 | $0 | $34,000 | $34,000 | $34,000 | |
| Et | Temporal implementation and ongoing management | E5+E9 | $229,500 | $34,000 | $34,000 | $34,000 | |
| Risk adjustment | ↑10% | ||||||
| Etr | Temporal implementation and ongoing management (risk-adjusted) | $252,450 | $37,400 | $37,400 | $37,400 | ||
| Three-year total: $364,650 | Three-year present value: $345,458 | ||||||
Temporal Training
Evidence and data. Interviewees told Forrester that their organizations’ employees needed to allot time to learn Temporal during their first few weeks using the platform. This included both learning Temporal and how to work with it. Training typically included time for self-learning but could also include more formalized sessions. Interviewees deemed this time investment critical to accelerate their organizations’ progress and maximize the value of their investment in Temporal.
- The senior software engineer of an entertainment organization said: “Employees are self-taught through documentation. They become productive in the span of a week or two [at 50% capacity], depending on their seniority.”
- The vice president of engineering for a food services organization explained: “[You need to] understand the Temporal mental model and understand that you need idempotency and can’t have nondeterministic code in your workflows. … There’s overhead in terms of educating new developers or on-ramping people to the concept.” They estimated, “[It takes] two to three weeks [at] 50% time ... to be minimally viable proficient [with Temporal].”
- The engineering manager for a financial services organization said: “It’s one to two weeks of time per engineer and probably closer to one week because we have great documentation. In the grand scheme of things, it’s trivial.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The number of developers learning Temporal in the present year is equal to the number of developers currently using Temporal in the present year less the number of developers who were using Temporal in the prior year.
- Each employee learning Temporal commits 50 hours for training during their first month using the platform. This includes both dedicated training time as well as on-the-job learning.
- The fully burdened annual salary for a developer is $170,000.
Risks. This cost may vary based on:
- The number of employees directly using Temporal, which may be impacted by an organization’s use of Temporal, the growth of an organization, and the retention of employees that learn Temporal.
- The employees’ prior knowledge of Temporal, the effectiveness of the training, and the corresponding amount of training time they require.
- The roles of the employees and their corresponding fully burdened salaries.
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 $226,000.
Temporal Training
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| F1 | Developers learning Temporal | C1CY-C1PY | 0 | 9 | 21 | 30 | |
| F2 | Training hours per developer | Interviews | 0 | 50 | 50 | 50 | |
| F3 | Fully burdened salary for a developer | Composite | $0 | $170,000 | $170,000 | $170,000 | |
| Ft | Temporal training | F1*F2*(G3/2,080 hours) | $0 | $36,779 | $85,817 | $122,596 | |
| Risk adjustment | ↑15% | ||||||
| Ftr | Temporal training (risk-adjusted) | $0 | $42,296 | $98,690 | $140,985 | ||
| Three-year total: $281,971 | Three-year present value: $225,937 | ||||||
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, 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.
Cash Flow Analysis (Risk-Adjusted Estimates)
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($252,450) | ($320,543) | ($418,596) | ($655,697) | ($1,647,286) | ($1,382,435) |
| Total benefits | $0 | $398,875 | $1,632,323 | $3,264,646 | $5,295,844 | $4,164,419 |
| Net benefits | ($252,450) | $78,332 | $1,213,727 | $2,608,949 | $3,648,558 | $2,781,984 |
| ROI | 201% | |||||
| Payback | 14 months | |||||
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
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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.
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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.
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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.
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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
Predictions 2025: Cloud Computing, Forrester Research, Inc., October 22, 2024.
Budget Planning Guide 2025: Technology Architecture And Delivery, Forrester Research, Inc., August 1, 2024.
Appendix C: Endnotes
1 Source: How Customer Experience Drives Business Growth, 2023, Forrester Research, Inc., October 13, 2023.
2 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.
3 Source: The Employee Experience Management Platforms Landscape, Q4 2024, Forrester Research, Inc., December 12, 2024.
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