We will examine how to create a cost benefit analysis document that clarifies your customer’s problem, explains your intended solution, and details the work required. We will break down costs of the current state and future state compared to forecasted benefits to show payback of the solution over time. This session will guide you through a simple process to help you understand how to calculate and communicate the business value of your SharePoint solutions.

1. Analyze This - How to Calculate
the Business Value of SharePoint
twitter @davidsamoranski
david.samoranski @robbinsgioia.com
David Samoranski
Product Manager
@davidsamoranski

2. Session Summary
Value Processes Solutions Analysis
@davidsamoranski

4. VALUE
@davidsamoranski

5. Problems
Change Complexity
Compliance Consolidation
@davidsamoranski

6. Solutions
Forms Services Lync Server
SharePoint Excel Services BCS
@davidsamoranski

7. Better Together
Pain Value
Problems Solutions
@davidsamoranski

8. Improving Processes
Ad-hoc Repeatable
Managed Optimized
@davidsamoranski

9. Analysis Activities
IDENTIFY EXPLORE DESIGN ANALYZE
Where can SharePoint Future State
Current State Metrics Process Pains help the process? Improvements
Manual Which capabilities are 50% Decrease in Cycle
Cycle Time Activities needed? Time
Communication What is the effort 65% Decrease in Work
Work Time Inefficiencies required? Time
Unnecessary How much will that
Cost Process Steps cost? 40% Cost Reduction
@davidsamoranski

10. Identify Current State
Who What
When Where
@davidsamoranski

11. Explore Pains and Challenges
Knowledge Management
Communication Visibility
@davidsamoranski

12. Design Solution Alternatives
Content Workflow
Integration Reporting
@davidsamoranski

13. Analyze Business Value
Today Tomorrow
Cost Benefit
@davidsamoranski

14. Solution Examples
Common business processes that could be improved with SharePoint
Solution → Collaborative Automated
Project Portfolio
Document Performance Records Management Automated Forms
Organization ↓ Management
Development Reporting
Actual Vs. Forecast Standardized
Lead Qualifications and Dashboards Customer Assessment
Sales Investment Decision Compliance Information
Conversions Survey
Lead Tracking Making
Customer Surveys
Marketing Plan Historic Campaign or Customer Satisfaction
Marketing Marketing Plan Lead Capture Rates
Execution Branding Information Surveys
Development
Employee Satisfaction
Employee Performance Strategic Human Capital EEO Compliance Surveys
HR Training Materials
Reviews Initiatives Information New Hire Recruiting
and Onboarding
Billing Information
Financial Performance Financial Planning and Online Customer
Finance Invoicing Forms Customer Invoicing
Reporting Budgeting Invoicing
Records
Supplier Information
Sensitive Records Virtual Project Business Process
Operations Discretionary Spending Vendor Data
Management Management Office Automation
Management
New Product Project Performance Customer Data and Product Requirements
Product Development Milestone Achievement
Development Reporting Market Requirements Documentation
Project Status
System Performance Reporting Vendor Contracts and Self-service Inventory
IT Change Request Forms
Tracking Managing IT Project Warranty Information System
Requests
@davidsamoranski

15. PROCESSES
@davidsamoranski

16. Process Modeling
Participants Steps
Decisions Metrics
@davidsamoranski

17. Participants
Roles
Swimlanes
@davidsamoranski

18. Steps
Sequence
Participants
@davidsamoranski

19. Decisions
Approvals
Authority
@davidsamoranski

20. Metrics
Work Time
Cycle Time
@davidsamoranski

21. Problem Identification Template
Who is Where does it When does it Why does it
ID What is the problem?
affected? occur? happen? exist?
1
2
3
4
5
6
7
8
9
@davidsamoranski

22. Process Analysis Template
Phase 1 Phase 2 Phase 3 Phase 4
Phase
Description
Stakeholders
Problems
Identified
Impact
@davidsamoranski

23. SOLUTIONS
@davidsamoranski

24. Solution Design
Brainstorm Define
Prioritize Select
@davidsamoranski

25. Solution Identification Template
Who is Where does it When does it Why is it an
ID What is the solution?
affected? occur? happen? improvement?
1
2
3
4
5
6
7
8
9
@davidsamoranski

26. Solution Analysis Template
ID Solution Value Complexity
1
2
3
4
5
6
7
8
9
@davidsamoranski

27. Detailed Value Analysis
ID Solution Urgency Scale Impact Reuse Value
1
2
3
4
5
6
7
8
9
@davidsamoranski

28. Detailed Complexity Analysis
ID Solution Implementation Training Support External Complexity
1
2
3
4
5
6
7
8
9
@davidsamoranski

29. Prioritization Matrix Template
High 5
Shared calendaring / presence
awareness to determine
resource availability
Complexity
Searchable employee
profiles, skill-sets, and Searchable, collaborative
3 contact information document repository and
storage
Improved ability to track
changes, compare, and
integrate document
versions
Low 1
Low 1 3 High 5
Value @davidsamoranski

30. Process Analysis Template
Phase 1 Phase 2 Phase 3 Phase 4
New Phase
Description
Stakeholders
Improvements
Benefit
@davidsamoranski

31. Anticipated Benefits
Features KPI Stakeholders
ID Process Phase Improvement Benefits
Required Impact Affected
1
2
3
4
5
6
7
8
9
@davidsamoranski

32. ANALYSIS
@davidsamoranski

33. Communicating Value
Cost Benefit
Value Return
@davidsamoranski

34. Common Costs Elements
Cost Element Cost Equation
Software Licenses x cost of license
Hardware Hardware components x cost
Planning Time IT hours x cost per hour
Pilot Program Cost of labor, hardware, software
Development Time Consultant cost + IT hours x cost per hour
App Testing/Remediation IT hours x cost per hour
Image Engineering IT hours x cost per hour
Installation Time IT hours x cost per hour
Employee Downtime Install time x cost per hour
Training Training class expense + employee training time
Support Costs IT hours x cost per hour
Ongoing Maintenance Desktop & Server costs
@davidsamoranski

35. Cost Analysis Template
Cost Element Item One-Time Cost Recurring Cost
Software
Hardware
Planning
Installation
Development
Training
Support
Maintenance
Total
@davidsamoranski

36. The Cost Line
Financial Measure Year 0 Year 1 Year 2 Year 3 Total
Implementation Costs ($850,000) ($850,000)
Recurring Support Costs ($50,000) ($50,000) ($50,000) ($150,000)
Benefits (one-time) $0
Benefits (on-going) $1,000,000 $1,000,000 $1,000,000 $3,000,000
Net Cash Flow ($850,000) $950,000 $950,000 $950,000 $2,000,000
Cumulative Cash Flow ($850,000) $100,000 $1,050,000 $2,000,000
Discount Rate 10%
Net Present Value (NPV) $1,535,900
NPV per User (1k users) $1,535
Payback (months) 15
Internal Rate of Return (IRR) 53%
@davidsamoranski

37. Benefit Equations
Reduced Operating Cost =
Improvement in work time per hour
X Number of hours annually = Dollars Saved
X Fully burdened resource cost/hour
Increased Profit =
(Future close rate – current close rate)
X Number of Opportunities
X Average Revenue per closed sale = Dollars Earned
X Gross Margin
@davidsamoranski

38. Benefit Analysis Template
ID Phase Improvement Cost Decrease Revenue Increase Benefit
1
2
3
4
5
6
7
8
Total
@davidsamoranski

39. The Benefit Line
Financial Measure Year 0 Year 1 Year 2 Year 3 Total
Implementation Costs ($850,000) ($850,000)
Recurring Support Costs ($50,000) ($50,000) ($50,000) ($150,000)
Benefits (one-time) $0
Benefits (on-going) $1,000,000 $1,000,000 $1,000,000 $3,000,000
Net Cash Flow ($850,000) $950,000 $950,000 $950,000 $2,000,000
Cumulative Cash Flow ($850,000) $100,000 $1,050,000 $2,000,000
Discount Rate 10%
Net Present Value (NPV) $1,535,900
NPV per User (1k users) $1,535
Payback (months) 15
Internal Rate of Return (IRR) 53%
@davidsamoranski

40. Cost/Benefit Analysis
Discount Rate NPV
Payback Time IRR
@davidsamoranski

41. The Analysis Line
Financial Measure Year 0 Year 1 Year 2 Year 3 Total
Implementation Costs ($850,000) ($850,000)
Recurring Support Costs ($50,000) ($50,000) ($50,000) ($150,000)
Benefits (one-time) $0
Benefits (on-going) $1,000,000 $1,000,000 $1,000,000 $3,000,000
Net Cash Flow ($850,000) $950,000 $950,000 $950,000 $2,000,000
Cumulative Cash Flow ($850,000) $100,000 $1,050,000 $2,000,000
Discount Rate 10%
Net Present Value (NPV) $1,535,900
NPV per User (1k users) $1,535
Payback (months) 15
Internal Rate of Return (IRR) 53%
@davidsamoranski

42. QUESTIONS?
David Samoranski | @davidsamoranski | (703) 706-4020
david.samoranski@robbinsgioia.com
@davidsamoranski

43. THANK YOU!
@davidsamoranski