IBM Connections Social Collaboration platform increases end user productivity and reduces operating costs

1. The Total Economic Impact™ of IBM
Connections
IBM Connections Social Collaboration platform
increases end user productivity and reduces
operating costs
Forrester Research
Anish Shah
Senior Consultant, Total Economic Impact
October 2015

2. Table of Contents
What is TEI?
Executive Summary
Analysis
Interview Highlights
Benefits
Costs
Flexibility
Risk
Financial Summary
Question and Answer
Please Note: This slide presentation is an
abridged, graphical, and complementary
representation of a full case study. For a
full explanation of methodology and
details on model calculations, please refer
to the full case study (Forrester Total
Economic Impact of IBM Connections,
July 2015).

3. Disclosures
The audience should be aware of the following:
• This document is an abridged webinar version of a full case study (Forrester
Total Economic Impact of IBM Connections, July 2015).
• The study is commissioned by IBM and delivered by the Forrester Consulting
group.
• Forrester makes no assumptions as to the potential return on investment that
other organizations will receive. Forrester strongly advises that readers should
use their own estimates within the framework provided in the report to
determine the appropriateness of an investment in High Speed Guard.
• IBM 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.
• The customer names for the interview was provided by IBM.
• Forrester does not endorse IBM.

4. What is TEI?

5. “Next level” business case justifications are increasingly
vital for critical investments.
33%,
Somewhat
important
4%,
Somewhat
unimportant
3%, Not at
all important
60%, Very
important
Base: 825 IT decision-makers at North American enterprises
Investment Impact
Categories
TCO ROI TEI
IT Impact
IT costs   
IT cost savings   
Business
Impact
User efficiency  
Business
effectiveness
 
Risk and
Uncertainty
Risk mitigation 
Risk vs. reward 
Strategic
Impact
Scalability 
Flexibility 
Do I need a business case? What is an effective business case?
• Over 90% of IT decision-makers
find value in a business case
• Decision-makers will likely want to
apply standard criteria/factors to
investment opportunities
• TCO and ROI only tells the story of costs
and quantified benefits
• TEI adjusts for risks and factors the
flexibility of a product into the case study

6. TEI Framework and Components
Total
Economic
Impact
RISK
Benefits
(Impact on Business)
Costs
(Impact on Budget)
Flexibility
(Options)
Perform due
diligence
Conduct
customer
interviews
and survey
Construct
financial
model
Write
case
study
Conduct
webinar
The TEI framework centers on quantifying benefits,
capturing costs, evaluating flexibility, and adjusting risk.
TEI Approach and Methodology

7. Executive Summary

8. Executive Summary: IBM Connections TEI
• Forrester was commissioned by IBM to examine the financial benefit of IBM
Connections
• IBM Connections can help organizations improve end user productivity, reduce
employee churn, and save in IT operating costs through its innovative, flexible,
and feature-rich social collaboration platform
• Based on an analysis of IBM Connections customer feedback and quantified
benefits, costs, risks, and flexibility, Forrester has determined IBM Connections has
has a three-year risk-adjusted ROI of 168% and NPV of $16.6 Million, with a
payback period of 10 – 11 months
Three-Year Risk-Adjusted Financial Snapshot
ROI Total Benefits (PV) Total Costs (PV) NPV
168% $26.5 Million ($9.9 Million) $16.6 Million
Payback Period
10-11 Months
Source: Forrester Total Economic Impact of IBM Connections, commissioned study conducted by Forrester Consulting on behalf of IBM, July 2015

9. Analysis
› Interview Highlights
› Composite Organization
› Benefits
› Costs
› Flexibility
› Risk

10. Customers Interviewed for the IBM Connections TEI
For this study, Forrester conducted and collected data from a total of four interviews with
representatives from the following companies, which are IBM Customers:
 A large, global engineering services organization headquartered in the US.
 A multinational consumer products company headquartered in the US.
 A global provider of workforce solutions and outsourcing services.
 A large, global technology and consulting company headquartered in the US.
Customer Interviews Revealed
IBM Connections
Increases business productivity by providing more-reliable, easier, and faster
access to information retrieval.
Increases employee engagement and reduces employee attrition.
Increases IT productivity through decreased support costs

11. © 2015 Forrester Research, Inc. Reproduction Prohibited 11
Highlights from Interviewed Customers
The customers identified several kinds of benefits related to end user productivity,
reducing IT operating costs, and providing flexibility to their employees:
“Improve productivity by managing all social networking
capabilities through one consistent platform”
“Reduce the burden on our IT resources of managing
disparate social networking systems”
“Provide flexibility to our employees to access information
anytime and anywhere”

12. Composite Organization
Based on the interviews, Forrester constructed a TEI framework, a composite company (the
Organization), and an associated ROI analysis that illustrates the areas financially affected. The
composite organization that Forrester synthesized from these results represents an organization with
the following characteristics:
• Is a US-based global organization.
• Has 30,000 employees and 5,000 contractions world-wide
• The Organization purchased IBM Connections license for all of its employees.
• In three years, 60% of the full-time employees and 30% of the contractors were using multiple
features of IBM Connections on a monthly basis.
• The Organization shared the following goals and objectives for an investment in IBM’s
Connections collaboration platform:
- Collaborate inside and outside company firewalls.
- Increase productivity through collaboration between employees globally.
- Accommodate the increase in bring-your-own-device (BYOD) and mobile users who need to
easily access and share information.
- Ensure collaboration infrastructure can be flexible and scalable based on a changing
business landscape.
- Have the ability to incorporate usage and real-time analytics into the solution.

13. Benefits

14. Source: Forrester Total Economic Impact of IBM Connections, a commissioned study conducted by Forrester Consulting on behalf of IBM, July 2015.
Increase in End-User Productivity
Three-Year Risk-Adjusted Benefit
Metric Year 3
Number of end users (full-time employees and contractors) 35,000
Average cost per FTE $100,000
Adoption rate (using multiple IBM Connections features) 60%
Increase in end user efficiency 10%
Percentage in end user productivity realized by the Organization 10%
Increase in end user productivity $21,000,000
Risk adjustment 10%
Increase in End-User Productivity (risk-adjusted) $18,900,000
› 10% increase in end-user productivity
› 5-10% in end user productivity realized by the Organization
› Risk adjusted to account for uncertainty:  10%

15. Source: Forrester Total Economic Impact of IBM Connections, a commissioned study conducted by Forrester Consulting on behalf of IBM, July 2015.
Reduction in Cost of Employee Turnover
Three-Year Risk-Adjusted Benefit
Metric Year 3
Total number of employees 35,000
Percentage turnover of employees 6%
Cost of replacing an employee $15,000
Adoption rate 60%
Reduction in employee churn rate 5%
Reduction in cost from employee turnover $945,000
Risk adjustment 10%
Increase in End-User Productivity (risk-adjusted) $850,500
› 5% reduction in the Organization’s employee churn rate
› Average cost of replacing an employee is 15% of their full-time salary
› Risk adjusted to account for uncertainty:  10%

16. Source: Forrester Total Economic Impact of IBM Connections, a commissioned study conducted by Forrester Consulting on behalf of IBM, July 2015.
Reduction in IT Operating Costs
Three-Year Risk-Adjusted Benefit
Metric Year 3
IT operating costs (software costs for multiple collaboration applications) $1,500,000
Reduction in IT operating costs 20%
Total reduction in IT operating costs $300,000
Risk adjustment 10%
Total reduction in IT operating costs (risk-adjusted) $270,000
› 10%-20% reduction in IT Operating Costs . Reduction in software costs
for multiple collaboration applications
› Risk adjusted to account for uncertainty:  10%

17. Costs

18. © 2015 Forrester Research, Inc. Reproduction Prohibited 18
Costs of using IBM Connections included subscription
costs, professional services and internal labor
Three-Year Risk-Adjusted Costs
Cost Initial Year 1 Year 2 Year 3 Total
Initial license cost and annual
subscription fee $0 $3,000,000 $3,600,000 $4,200,000 $10,800,000
Professional fees and internal
implementation costs $1,020,000 $0 $0 $0 $1,020,000
Total costs (risk-adjusted) $1,020,000 $3,000,000 $3,600,000 $4,200,000 $11,820,000
› Annual subscription fee to IBM for its Connections platform is a monthly charge
of $10 per user
› The Organization incurred $300,000 in professional service fees to help
implement the IBM Connections
› The Organization had 6 FTEs to project manage, architect, and roll-out IBM
Connections across the organization

19. Source: Forrester Total Economic Impact of IBM Connections, a commissioned study conducted by Forrester Consulting on behalf of IBM, July 2015.
After adjusting for risks, the interviewed organization’s
three-year ROI is 168% with a $16.6M NPV, and payback
period between 10-11 months.
($10,000,000)
($5,000,000)
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Initial Year 1 Year 2 Year 3
CashFlows
Financial Analysis (risk-adjusted)
Total Costs Total Benefits Cumulative Total
Initial Year 1 Year 2 Year 3 Total
Present
Value
Total Costs ($1,020,000) ($3,000,000) ($3,600,000) ($4,200,000) ($11,820,000) ($9,878,002)
$0 $4,140,000 $9,315,000 $20,020,500 $33,475,500 $26,503,681
($1,020,000) $1,140,000 $5,715,000 $15,820,500 $21,655,500 $16,625,680
168%
10.7Payback Period (months)
Summary
Total Benefits
Total
ROI

20. Thank you
Anish Shah
ashah@forrester.com