When you’re in charge of sales for a large enterprise, chances are that your sales teams are dispersed. They’re managing a diverse portfolio of products and services. And they’re trying their hardest to stay ahead of an increasing field of competition. 
It’s never easy—but according to Forrester Research the right sales application can make a world of difference. Get insights into the potential cost savings and benefits of SAP Cloud for Sales, today’s modern sales application. Learn how you can achieve: · 12% productivity improvement across sales · 20% improved forecasting effectiveness · 10% reduction in sales cycle times Plus, give your sales team unparalleled advantage of engaging with the right customers at the right time, everytime - easily and faster than ever before. Engage customers like never before: http://sqz.co/Kx9p8DX

1. A Forrester Total Economic
Project Director:
Impact™ Study
Adrienne Breslin
Commissioned By SAP
February 2014
The Total Economic
Impact Of SAP Cloud for
Sales
Cost Savings And Business Benefits
Enabled By SAP Cloud for Sales

2. Table Of Contents
Executive Summary .................................................................................... 1
Disclosures .................................................................................................. 3
TEI Framework And Methodology ............................................................ 3
Analysis ........................................................................................................ 5
Financial Summary ................................................................................... 20
SAP Cloud For Sales: Overview .............................................................. 21
Appendix A: Composite Organization Description .............................. 23
Appendix B: Total Economic Impact™ Overview ................................. 24
Appendix C: Glossary ............................................................................... 25
Appendix D: Endnotes .............................................................................. 25
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3. 1
Executive Summary
In today’s sales organizations, sales effectiveness is the key to staying competitive. These organizations are facing a world
of dispersed sales teams managing a diverse portfolio of products and services, trying to stay ahead of an increasing field of
competition. Sales organizations are looking for applications that support these goals — they need applications to help
salespeople access the right information quickly — whether they’re at their desk or on the road, shorten sales cycles, and
ultimately close more deals. Salespeople need support when guiding their prospects through the buying journey and
orchestrating a deal. Sales organizations want to harness the power of collaboration and analytics without slowing down their
salespeople. This means finding a fast, easy-to-use sales application that aligns with how salespeople want to sell, all while
being a cost-effective solution for the business.
In January 2014, SAP commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine
the potential return on investment (ROI) enterprises may realize by deploying SAP Cloud for Sales. The purpose of this
study is to provide readers with a framework to evaluate the potential financial impact of SAP Cloud for Sales on their
organizations.
To better understand the benefits, costs, and risks associated with an SAP Cloud for Sales implementation, Forrester
interviewed four customers with experience using SAP Cloud for Sales.
SAP CLOUD FOR SALES IMPROVES SALES EFFECTIVENESS
Our interviews with four existing customers and subsequent financial analysis found that a composite organization based on
1
these companies experienced the risk-adjusted ROI, benefits, and costs shown in Figure 1. See Appendix A for a
description of the composite organization.
FIGURE 1
Financial Summary Showing Three-Year Risk-Adjusted Results
ROI:
655%
Total
benefits
(present
value):
$2,420,533
Total costs
(present
value):
($320,753)
Net present
value:
$2,099,780
Source: Forrester Research, Inc.
To further understand the value they are receiving from their investment in SAP Cloud for Sales, the representative
organization based on the four interviews looked at specific metrics across several different benefit areas. These metrics and
their resulting values are outlined in Table 1.

4. 2
TABLE 1
Metrics And Benefit Areas
Value
Increasing revenue/win rates
Increasing sales effectiveness/productivity
Increasing forecasting capability
Reducing sales cycle times
Metric
53 additional deals
12% productivity improvement
across sales
20% improved forecasting
effectiveness
10% reduction in sales cycle
times
Results in
Total
$493,500 additional revenue
generated
Results in
$1,887,638 value captured
Results in
$119,388 value captured
Results in
$105,000 in value captured
Source: Forrester Research, Inc.
›
Benefits. The composite organization experienced the following risk-adjusted benefits that represent those experienced by
the interviewed companies:
•
•
Improved efficiency of sales team members. The easy-to-use features and functionality of SAP Cloud for Sales
supports individual sales team members with their day-to-day tasks, making them more efficient. With SAP Cloud for
Sales, everyday processes are improved, and functionality like mobile access and integration with ERP tools
ensures that sales staff has the information they need whenever they may need it. The social context of the tool also
enables collaboration between the sales team members, helping them work together more efficiently to sell better.
•
Improved collaboration between sales reps, sales managers, and sales directors. SAP Cloud for Sales
enables sales reps, sales managers, and sales directors to work together better, through improving specific activities
like forecasting.
•
Improved time to closure. SAP Cloud for Sales helps shorten the sales cycle by enabling sales staff to cut down
on time spent on sales activities like opportunity follow-up.
•
Time savings on report creation. SAP Cloud for Sales also enables the sales staff to cut down on timely activities
like report creation, providing key information to sales and supporting staff faster.
•
›
Increased sales due to better visibility. By increasing visibility into the sales process and uncovering key analytics
and data, SAP Cloud for Sales enables sales teams to win net new deals.
Savings from reduced legacy system. SAP Cloud for Sales covers the lead-to-quote process and allows for
previous sales support systems to be taken offline, removing the cost for IT maintaining those systems.
Costs. The composite organization experienced the following risk-adjusted costs:
•
Licensing costs. This is the billable cost of SAP Cloud for Sales.
•
Professional services and training costs. This is a one-time cost paid to SAP for professional services that go
toward the planning, implementation, and training for the SAP Cloud for Sales investment.
•
Internal implementation costs. This is the cost for internal team members associated with planning and managing
the deployment, working with SAP Cloud for Sales developing training material, and driving the adoption of SAP
Cloud for Sales.

5. 3
Disclosures
The reader should be aware of the following:
›
›
›
›
The study is commissioned by SAP 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 report to determine the appropriateness of an
investment in SAP Cloud for Sales.
SAP 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.
SAP provided the customer names for the interviews but did not participate in the interviews.
TEI Framework And Methodology
INTRODUCTION
From the information provided in the interviews, Forrester has constructed a Total Economic Impact™ (TEI) framework for
those organizations considering implementing SAP Cloud for Sales. The objective of the framework is to identify the cost,
benefit, flexibility, and risk factors that affect the investment decision.
APPROACH AND METHODOLOGY
Forrester took a multistep approach to evaluate the impact that SAP Cloud for Sales can have on an organization (see
Figure 2). Specifically, we:
›
Interviewed SAP marketing, product management, and sales personnel, along with Forrester analysts, to gather data
relative to SAP Cloud for Sales and the marketplace for SAP Cloud for Sales.
›
Interviewed four organizations currently using SAP Cloud for Sales to obtain data with respect to costs, benefits, and risks.
›
Designed a composite organization based on characteristics of the interviewed organizations (see Appendix A).
›
›
Constructed a financial model representative of the interviews using the TEI methodology. The financial model is
populated with the cost and benefit data obtained from the interviews as applied to the composite organization.
Risk adjustment is a key part of the TEI methodology. While interviewed organizations provided cost and benefit estimates,
some categories included a broad range of responses or had a number of outside forces that might have affected the
results. For that reason, some cost and benefit totals have been risk-adjusted, and is detailed in each relevant section.
Forrester employed four fundamental elements of TEI in modeling SAP Cloud for Sales’ service: benefits, costs, flexibility,
and risks.
Given the increasing sophistication that enterprises have regarding ROI analyses related to IT investments, Forrester’s TEI
methodology serves to provide a complete picture of the total economic impact of purchase decisions. Please see Appendix
B for additional information on the TEI methodology.

6. 4
FIGURE 2
TEI Approach
Perform due
diligence
Source: Forrester Research, Inc.
Conduct
customer
interviews
Design
composite
organization
Construct
financial
model using
TEI framework
Write case
study

7. 5
Analysis
COMPOSITE ORGANIZATION
For this study, we conducted a total of four interviews with representatives from the following companies, which are SAP
customers:
›
›
›
›
A global manufacturing firm for the automotive, aerospace, and industrial industries. The organization is headquartered in
Europe, and spread over 11 countries. It has 1,200 employees worldwide, with 125 licenses for SAP Cloud for Sales.
A global organization focusing on information and communication technology. The company employees around 150
individuals based in Europe, with about 30 using SAP Cloud for Sales.
A college textbook company based in the US, with about 2,000 employees. The company has about 50 users of SAP
Cloud for Sales.
A European-based manufacturer of construction materials. It has 200,000 employees worldwide, and is currently rolling out
SAP Cloud for Sales to its US sales team of about 300 users.
Based on the interviews, Forrester constructed a TEI framework, a composite company, 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:
›
A US-based sales organization with employees spread across the globe.
›
The annual revenue of the composite organization is $50 million a year.
›
The composite organization employs 100 salespeople, with 10 sales managers, three directors, and 12 individuals in sales
support roles.
›
The composite organization has 5,000 deals a year, with an average deal size of $10,000.
›
The composite organization has deployed SAP Cloud for Sales to support its sales professionals and sales support team.
INTERVIEW HIGHLIGHTS
The four interviews uncovered the following drivers behind their need for SAP Cloud for Sales:
›
›
Organizations needed to increase the visibility across their sales organization. Our interviews highlighted that
gaining visibility and transparency into the overall sales process is key to the success of these sales organizations. The
companies we spoke with discussed how they lacked the tools needed to understand how their dispersed global sales
teams were doing, and how they could better support each other through the sales process. “Transparency means we can
see a global view of our customers, and everyone has gotten access to the data they need to have.” Our organizations
lamented that their current means of organizing and gathering information were difficult to manage, time-consuming, and
ultimately did not provide the level of visibility that was needed. “Prior to implementing this, our sales folks had to gather
data and statistical information from a host of internal sources, hard copy, and online sources, and they’d trade information
back and forth over the phone and email — it just wasn’t working.” The old ways of doing things just did not support the
sales efficiency these organizations were looking to drive. They needed a way to easily keep tabs on all aspects of the
sales cycle.
These companies wanted to create a single global sales organization on one system. A main driver behind the hunt
for a sales tool like SAP Cloud for Sales was the need to have everything available in one system — to not only build
visibility, but to create a unified sales team. These organizations discussed how they wanted to support their sales staff,
regardless of location, ensuring that they could quickly access the information they need, when they need it, and easily

8. 6
collaborate with their global sales network, all in one place. “Previously, we had local sales solutions, but they were all
done on a local level by our individual plans in different countries. And then there were others that didn’t have anything and
certainly they weren’t integrated. What drove our need is that we were working very autonomously, and we wanted a
global sales organization.” In order to create their vision, they wanted a common tool to manage the sales process. As
another organization stated, “We needed a single source for all
our agents and support staff to meet and connect on client
information, one stop shopping. We wanted them to have the
ability to meet in a social-networking way to exchange information
“The company vision was to
that we get from the field and also a place where we could also
get us a single source of
tap into metrics and information about specific accounts. This
solution is the answer for us.” SAP Cloud for Sales allowed these
information so we could
organizations to create a single source of truth that connected
improve our efficiency and
their organization.
›
manage our accounts better.”
Organizations needed a tool that increased sales
effectiveness to support the bottom line. Our interviewees
~Director of analytics at textbook company
were realistic about their hunt for a sales application — it needed
to be easy to use, and help increase sales and profitability. They
were not interested in spending money on software that would not
be adopted or would be a waste of time. “Our underlying goal is always to increase sales and increase profitability.” Their
sales solution needed to be quickly put to use to better the company’s bottom line.
Our interviews uncovered that SAP Cloud for Sales was selected not only because it helped the organizations with the
above goals, but also because of its ease of use, ability to integrate with existing SAP applications, and mobile access. Our
interviews discussed how they deployed SAP Cloud for Sales, with everyone up and running in a matter of weeks. To ensure
the success of the deployment and support adoption throughout the company, the organizations discussed how local
champions were identified and engaged to support training and adoption. The investment in SAP Cloud for Sales is regarded
as a key piece of a larger effort to improve the overall sales organization; our interviews uncovered that SAP Cloud for Sales
is a piece of the puzzle in increasing the overall efficiency and effectiveness of the sales team. “Our organization has been
undergoing a lot of huge changes in the last year, reorganization and things to improve our sales organization.” The Cloud
for Sales application supported their overall efforts to become a better sales organization.
The interviews revealed that SAP Cloud for Sales was selected because it:
›
›
›
Is easy to use. Our interviewees were impressed with the overall user experience of SAP Cloud for Sales, and each
company discussed how the easy-to-use interface was key in their decision-making. As one interviewee noted, the
salespeople will not use a solution that is too cumbersome. Interviews noted how intuitive the user interface was and how
that supported adoption efforts. Along with enlisting champions, having an easy-to-use platform helps drive adoption
among users. “The user perception on my team is very good. It has some great features and the user experience in my
group is very good.”
Is a cost-effective, easy-to-implement solution. Our interviewees were impressed with the low cost of ownership for the
solution. “If we looked at it and compared it to the cost, you don’t have to close a lot of additional business to pay for the
cost of it. Certainly one of the benefits of the cloud system is that there isn’t a very high upfront cost. So there is not that
very big investment associated with other solutions.” Because it is cloud based, companies did not need to invest heavily
in maintenance and found that it was easy to get up and running within their sales organizations.
Provides an easy-to-use mobile solution for the on-the-go sales force. Supporting the mobile workforce was another
key reason businesses selected SAP Cloud for Sales. With the solution, they were able to ensure that their sales force had
the key information they required, wherever they were. “We had tried another solution with mobility, but the people weren’t
using it; with Cloud for Sales, the mobile user experience is almost the same as it is on a desktop or notebook and that’s a

9. 7
great benefit for us. The sales reps are on the road and we always want to provide them with the latest information.”
Through implementation of SAP Cloud for Sales, they were able to have an out-of-the-box mobile solution.
›
›
Integrates easily with existing systems. Another key reason SAP Cloud for Sales was selected because organizations
saw the need to pull in different systems and connect different existing applications. “Our objective is to connect different
existing applications, financial data, sales data all together.” SAP Cloud for Sales allowed companies to easily access
back-office information, and helped save the sales team’s time finding important information to close sales.
Enables better team collaboration through social networking. Our interviews highlighted that the social aspects of
SAP Cloud for Sales fosters better collaboration among the team members, bringing global salespeople together to create
and share information and best practices, enabling a discussion that helps to win more deals. “The social context where
we can exchange information among individuals or a group of individuals. We share information about individual accounts
or the industry as a whole, or a particular competitor or a partner. There are a lot of different levels that enable us to be
more collaborative.”

10. 8
BENEFITS
The composite organization experienced a number of quantified benefits in this case study:
›
Increased sales due to better visibility.
›
Improved efficiency of sales team members.
›
Improved collaboration between sales reps, sales managers, and sales directors.
›
Improved time to closure.
›
Time savings on report creation.
›
Savings from retired legacy systems.
Increased Sales Due To Better Visibility
The first benefit identified is the ability to have better visibility into the overall sales process. All of the companies interviewed
noted that SAP Cloud for Sales provided their team with a complete view of the sales processes, giving them a clearer
picture of what needed to be done to win sales. As one interview told us, “Before there were so many different sources to get
the information they need — it was cumbersome. They just didn’t have the information they needed when they needed it;
they couldn’t see it. The tool helps us consolidate all that information into one area.” The tool enables the sales and support
team to see new data that was previously unavailable to them, helps
uncover new analytics and ratios that were not previously analyzed,
and creates better reports than what was previously available,
enabling the team to increase sales by improving the sales process.
“Our sales are increasing with
One organization explained how the tool helped them uncover
them, and we are getting
additional opportunities with one of their largest global clients; before
SAP Cloud for Sales, the sales organizations acted alone — each
better business from countries
sales team concentrating only on understanding the local country
outfit of their global client. With SAP Cloud for Sales, they were able to
where we didn’t get it before.”
leverage best practices and sales information from sales teams in
~Director of customer order management at a
other countries to make better sales and win net new deals. This
global manufacturing firm for the automotive,
organization told us “the fact that they can even just get the
aerospace, and industrial industries
information, to be able to go to a customer in Hungary and say look,
we are already selling to your company in the US and other countries,
and this is what we’re doing there, this is why they are buying from us
and these are the results they are seeing. It builds a very strong case
for our sales organization to get the same from the different country — we are leveraging [information in] SAP Cloud for
Sales to help us make sales in different countries. Our sales are increasing with them, and we are getting better business
from countries where we didn’t get it before.” Another organization told us “before the tool, we were all working separately —
with the tool, we are able to uncover sales leads that weren’t always visible beforehand — that information is now more
accessible.” The tool provided information and insights that provided the sales team with better information to meet their
specific needs, enabling them to make better decisions that resulted in increased sales.

11. 9
TABLE 2
Increased Sales Due To Better Visibility
Ref.
Metric
A1
Number of annual deals
A2
Percent increase in sales due to better visibility
A3
Number of extra deals closed due to better visibility
A4
Average deal size
At
Increased sales due to better visibility
Calculation
Risk adjustment
Atr
Increased sales due to better visibility (risk-adjusted)
Year 1
Year 2
Year 3
5,000
0.3%
0.5%
12.5
15
25
$10,000
A3*A4
5,000
0.25%
A1*A2
5,000
$10,000
$10,000
$125,000
$150,000
$250,000
$141,000
$235,000
 6%
$117,500
Source: Forrester Research, Inc.
To calculate this benefit, the model assumes that our representative organization closes 5,000 deals annually. Forrester
conservatively estimates that the percent increase in sales due to better visibility in the first year is .25%. As the sales team
grows more comfortable with the tool and improves how they use it, the percent increase in sales raises to .3% in Year 2 and
.5% in Year 3. With an assumed average deal size of $10,000, the increase in sales due to better visibility for our
representative organization is valued at $493,500. Table 2 illustrates the calculations used.
Interviewed organizations provided a broad range of details relating to the increase in sales, since there are a variety of
outside forces that might also impact this. To compensate, this benefit was risk-adjusted and reduced by 6%. The riskadjusted present value total benefit resulting from increased sales due to better visibility over the three years was $399,906.
See the section on Risks for more detail.
Improved Efficiency Of Sales Organization Members
Another key benefit from the Cloud for Sales implementation was an overall improved efficiency of sales organization
members. Our interviews uncovered that this was not merely a tool that made salespeople more efficient, but was being
used by the whole team — “Our whole sales team is using this — external salespeople, market segment leaders, sales
managers, internal sales department, technical people, support teams.” Our interviews uncovered that the use of the tool
made the sales reps, sales managers, sales directors, and sales support staff more effective in their everyday activities. Prior
to Cloud for Sales, information to support the sales process was not available in one place. As a result, team members relied
largely on gathering information from different online and offline sources, waiting on other team members to return phone
calls or emails, wasting valuable time that could be used more efficiently. As one organization we spoke with stated: “The
increasing complexity of the marketplace in general means that to stay in the game, we have to be able to respond faster
with more timely, up-to-date information, and this software is a key part of that.”
Interviewees noted improvement across the board on these day-to-day tasks, and a variety of factors impacted this:
›
Our interviews uncovered that the social aspect of Cloud for Sales supported team members to more effectively
collaborate with one another to get best practice information and support sales activities. One interviewee told us how
important this is to his organization: “The social context [of SAP Cloud for Sales] where we can exchange information
among individuals or group of individuals is key to my group. We share information about individual accounts or the
industry as a whole, or a particular competitor or a partner. There are a lot of different levels that enable us to be more
collaborative.” Team members now have instant access to an extended network to gain best practices and expert advice.

12. 10
›
›
›
Mobile access allowed team members to access data, reports, and analytics wherever they were, whenever they need it.
As one organization stated: “Having the mobile capability has improved the sales process for us — it helps us save time,
extract information on the fly. We have up-to-date information available on the fly. We are much more fleet of foot in the
sales effort — we can respond more quickly and are aware of changes in data much quicker. We need that kind of
responsiveness to be competitive. It’s just not fast enough in today’s marketplace without the mobile access.” Mobile
access provided the sales team with agility that was not available to them previously.
Interviewees also noted that a solid user experience made adoption easier, and sales associates were more likely to use
this tool as compared to others in the past. “The user experience and the non-complexity of the solution, that’s a key
benefit of this. Adoption will only happen if the product speaks for itself.” It was easy to use and intuitive, and its easy-tounderstand user interface helped the team get information quickly, in a context that made sense to their sales efforts.
SAP Cloud for Sales back-end integration allowed users better access to information and details about clients and sales
orders. Time is no longer wasted trying to track this information down; they now have access to it in one system, saving
the sales team and support staff valuable time. “All of our different team members are working together for different sales
opportunities, and they all have access to the same information in the ERP system right there — it saves them a lot of time
each week.”
SAP Cloud for Sales helps support the team members through many different processes, helping them better manage
accounts and access information more quickly, which improves their overall efficiency. As one company noted, “Our sales
staff now has more time to engage with the customers.” With the time savings, the sales team can now spend more time on
important tasks and close more deals.
TABLE 3
Improved Efficiency Of Sales Organization Members
Ref.
Metric
B1
Number of sales reps, managers, and support staff
B2
Fully loaded annual salary
B3
Calculation
Year 1
Year 2
Year 3
75
100
125
$105,000
$105,000
$105,000
Percentage productivity improvement
10%
12%
15%
B4
Percent captured
50%
50%
50%
Bt
Improved efficiency of sales organization members
$393,750
$630,000
$984,375
$592,200
$925,313
Risk adjustment
Btr
Improved efficiency of sales organization members (riskadjusted)
B1*B2*B3*B4
 6%
$370,125
Source: Forrester Research, Inc.
To calculate this benefit, the model assumes that our representative organization is using SAP Cloud for Sales to support the
sales reps, sales managers, sales directors and sales support staff. We assume the composite organization starts with 75
salespeople, sales managers, and support staff who have access to SAP Cloud for Sales in Year 1, rolling out to 100 and
125 in Years 2 and 3. Based on the feedback from the interviewed organizations, Forrester conservatively estimates that the
productivity savings to be between 10% and 15%, depending on the growth of adoption over time. Forrester also adjusts
productivity savings by assuming that only 50% of this time saved is used for productive work. With an assumed annual fully
loaded salary of $105,000, the improved efficiency of the entire sales team and support staff is for our representative
organization is valued at $2,008,125. Table 3 illustrates the calculations used.

13. 11
To compensate for the variety of adoption challenges and efficiency gains that could potentially affect this calculation, this
benefit was risk-adjusted and reduced by 6%. The risk-adjusted total benefit resulting from improved efficiency of the team
over the three years was $1,887,638. See the section on Risks for more detail.
Improved Collaboration Between Sales Reps, Sales Managers, And Sales Directors
Several of the organizations noted that use of SAP Cloud for Sales had a positive effect on collaboration between the sales
teams and their upper management. This benefit looks specifically at the usage case of sales members needing to
communicate and collaborate with their management on a specific activity. For the purpose of this analysis, the model
assumes a case where salespeople and their management are creating and collaborating on individual and team forecasts
before and after the implementation of Cloud for Sales. Prior to the use of Cloud for Sales, the process of creating forecasts
for our representative organization was very manual; the data was traditionally kept in spreadsheets, with no universal
formatting methods used among different teams. Different managers would rely on their teams to provide their forecasts, and
then spend time formatting all of these together; it was a manual process to combine forecasts and get a view of the entire
team. The process would then need to be duplicated again for increasingly broad views of the organization. Now, SAP Cloud
for Sales allows for a more automated process that enables easier creating and sharing of forecasts. The user interface
ensures that different levels of the sales team and managers see what they need — it is more easily rolled up based on the
level of the individual. As one interviewed organization shared with us, “It’s the single source of truth from the account
manager all the way up to the senior director at the organization. That’s very important for me because I talk to all of them
and I want transparency in the figures, and I’m now certain that I can get that through them with one simple report. I’m
confident that it’s the truth so I can go to my senior director with the correct information and without any doubt; it’s a good
thing.”
TABLE 4
Improved Collaboration Between Sales Reps, Sales Managers, And Sales Directors
Ref.
Metric
C1
Number of sales reps, managers, and directors
C2
Number of hours spent per week developing
forecasts
C3
Total hours spent developing forecasts before SAP
Cloud for Sales
C4
Hourly sales salary
C5
Estimated time improvement on forecasting activities
Ct
Improved collaboration between sales reps, sales
managers, and sales directors
Calculation
Risk adjustment
Ctr
Improved collaboration between sales reps, sales
managers, and sales directors (risk-adjusted)
Year 1
Year 2
Year 3
56
C3*C4*C5
52
52
52
2,912
4,420
5,876
$48.08
$48.08
20%
C2*C1
113
$48.08
1 hour/week*52 weeks
85
20%
20%
$28,002
$42,503
$56,504
$39,953
$53,113
 6%
$26,322
Source: Forrester Research, Inc.
To calculate this benefit, the model assumes that our representative organization starts with 56 sales reps and their upper
management that have access to SAP Cloud for Sales in Year 1, rolling out to 85 and 113 in Years 2 and 3. For each of
these, we assume that 1 hour a week is spent on forecasting activities prior to SAP Cloud for Sales. Based on the feedback
from the interviewed organizations, the estimated reduction in time spent on forecasting activities is 20% with Cloud for Sales

14. 12
implemented. With an assumed hourly salary of $48.08, the improved collaboration between the sales reps and their upper
management is for our representative organization is valued at $127,008. Table 4 illustrates the calculations used.
Interviewed organizations did note that this benefit could fluctuate, since there are a variety of outside forces that might also
impact this. To compensate, this benefit was risk-adjusted and reduced by 6%. The risk-adjusted total benefit resulting from
improved collaboration between sales reps and their upper management over the three years was $119,388. See the
section on Risks for more detail.
Improved Time To Closure
Using SAP Cloud for Sales has enabled the sales reps to close deals more quickly. This benefit looks specifically at the
usage case of the sales reps shortening time to closure through improved follow-up processes as noted by the interviewed
organizations. For the purpose of this analysis, the model assumes a case where the sales reps are following up on potential
sales opportunities before and after SAP Cloud for Sales is implemented, based on the experience of our interviewed
organizations. Prior to the use of Cloud for Sales, our representative organization did not have a specific process in place to
ensure timely, thorough follow-ups to potential sales opportunities. SAP Cloud for Sales introduced a controlled process that
ensured diligent follow-ups to these opportunities, resulting in less time being wasted, better overall visibility into the
opportunity, and a shorter overall time to closing the deal. As one organization highlighted for us, “When we get an inquiry,
the sales rep has to use the system to send out the follow-up. Now our team worldwide can keep informed on what’s
happening with a particular inquiry or follow-up.”
TABLE 5
Improved Time To Closure
Ref.
Metric
D1
Number of salespeople
D2
Average hourly salary of sales
D3
Time spent in follow-up activities before SAP Cloud
for Sales
D4
Percent decrease with SAP Cloud for Sales
Dt
Improved time to closure
Calculation
Risk adjustment
Btr
Improved time to closure (risk-adjusted)
Year 1
Year 2
Year 3
50
$48.08
$48.08
104
104
104
10%
D1*D2*D3*D4
100
$48.08
2 hours/week*52 weeks
75
10%
10%
$25,002
$37,502
$50,003
$35,252
$47,003
 6%
$23,502
Source: Forrester Research, Inc.
To calculate this benefit, the model assumes that our representative organization starts with 50 sales reps with access to
SAP Cloud for Sales in Year 1, rolling out to 75 and 100 in Years 2 and 3. We assume that 2 hours a week were spent on
follow-up activities prior to SAP Cloud for Sales. Based on the feedback from the interviewed organizations, the estimated
reduction in time spent on follow up activities is 10% now that the organization uses SAP Cloud for Sales to manage the
follow-up process. With an assumed hourly salary of $48.08, the improved time to closure for our representative organization
is valued at $112,507. Table 5 illustrates the calculations used.
To compensate for fluctuations in the follow-up process, this benefit was risk-adjusted and reduced by 6%. The risk-adjusted
total benefit resulting from improved collaboration between sales teams and their management over the three years was
$105,757. See the section on Risks for more detail.

15. 13
Time Savings On Report Creation
SAP Cloud for Sales also helped organizations save time on report creation. Our interviewed organizations highlighted that
creating reports in SAP Cloud for Sales cut down drastically on the time it took to create reports. As one interviewee put it,
“The efforts we have to put in to get the right figures from the system are close to nil.” Previously, all the information for the
different reports was kept in different areas, and it was a labor-intensive process to gather together all the information for any
given type of report. Now all the information is in one area and the sales organization can easily pull data to track sales
cycles, revenue trends, and other reports configured to the specific need of the sales organization. “We used to not be able
to pull these reports too many times a week, once a week maximum, because if you did it every day, it would just take too
much time. Now I’d be shocked if it took five minutes. We decreased the time spent from hours to minutes, definitely.” SAP
Cloud for Sales helps the sales organization get the right information in front of the right people faster so that each team
member’s team can be used more effectively to impact the bottom line.
To calculate this benefit, the model assumes that our representative organization pulls an average of 10 reports a week.
Based on our customer interviews, we assume that, prior to implementing SAP Cloud for Sales, it took 1.5 hours to gather
information and build out each report into a usable format. Based on the feedback from the interviewed organizations, the
estimated reduction in time spent creating reports is 90% now that the organization uses SAP Cloud for Sales. With an
assumed hourly salary of $48.08, the improved time to closure for our representative organization is valued at $33,752.
Table 6 illustrates the calculations used.
While each organization we spoke with noted a dramatic decrease in the time spent creating reports, Forrester risk-adjusted
the benefit by decreasing it by 1% in order to account for any circumstances that may impact this benefit. The risk-adjusted
benefit resulting from time savings on report creation each year is $33,415. See the section on Risks for more detail.
TABLE 6
Time Savings On Report Creation
Ref.
Metric
Calculation
Year 1
Year 2
Year 3
E1
Number of reports pulled per week
10 reports*52 weeks
520
520
520
E2
Time before SAP Cloud for Sales on pulling reports
1.5 hours per report
780
780
780
E3
Percent savings creating reports
90%
90%
90%
E4
Hourly sales salary
$48.08
$48.08
$48.08
Et
Time savings on report creation
$33,752
$33,752
$33,752
$33,415
$33,415
Risk adjustment
Etr
Time savings on report creation (risk-adjusted)
E1*E2*E3*E4
 1%
$33,415
Source: Forrester Research, Inc.
IT Savings From Reduced Legacy Systems
As we heard from interviewed organizations, implementing SAP Cloud for Sales eliminated the need for the representative
organization to continue maintaining two legacy applications that are no longer used. This represents the savings from the
cost of maintaining those two systems, for a total savings of $300,000. Table 7 illustrates the calculations used.
To compensate for variations in the annual cost of maintenance for legacy systems, Forrester risk-adjusted the benefit by
decreasing it by 6%. The risk-adjusted total benefit resulting from time savings on report creation over the three years was
$282,000. See the section on Risks for more detail.

16. 14
TABLE 7
IT Savings From Reduced Legacy Systems
Ref.
Metric
F1
Annual cost of maintenance
Ft
Savings from reduced legacy systems
Year 1
Number of retired legacy systems
F2
Calculation
Year 3
2
2
$50,000
F1*F2
2
$50,000
$50,000
$100,000
$100,000
$100,000
$94,000
$94,000
 6%
Risk adjustment
Ftr
Year 2
IT Savings From Reduced Legacy Systems (risk-adjusted)
$94,000
Source: Forrester Research, Inc.
Total Benefits
Table 8 shows the total of all benefits across the six areas listed above, as well as present values (PVs) discounted at 10%.
Over three years, the composite organization expects risk-adjusted total benefits to be a PV of more than $2.4 million.
TABLE 8
Total Benefits (Risk-Adjusted)
Ref.
Atr
Btr
Ctr
Benefit
Increased sales due to better
visibility
Improved efficiency of sales
organization members
Improved collaboration between
sales reps, sales managers, and
sales directors
Year 1
Year 2
Year 3
Total
Present value
$117,500
$141,000
$235,000
$493,500
$399,906
$370,125
$592,200
$925,313
$1,887,638
$1,521,100
$26,322
$39,953
$53,113
$119,388
$96,852
Dtr
Improved time to closure
$23,502
$35,252
$47,003
$105,757
$85,813
Etr
Time savings on report creation
$33,415
$33,415
$33,415
$100,244
$83,097
Ftr
Savings from reduced legacy
systems
$94,000
$94,000
$94,000
$282,000
$233,764
Total benefits
$664,863
$935,819
$1,387,844
$2,988,526
$2,420,533
Source: Forrester Research, Inc.
In addition to these benefits, our representative organization considered additional metrics across several different benefits
areas to further understand the value they are receiving from their investment in SAP Cloud for Sales. These metrics and
their resulting values are outlined in Table 9.

17. 15
TABLE 9
Metrics And Benefit Areas
Value
Metric
Total
Increasing revenue/win rates
53 additional deals
Results in
$493,500 additional revenue
generated
Increasing sales
effectiveness/productivity
12% productivity improvement
across sales
Results in
$1,887,638 value captured
Increasing forecasting capability
20% improved forecasting
effectiveness
Results in
$119,388 value captured
Reducing sales cycle times
10% reduction in sales cycle times
Results in
$105,000 in value captured
Source: Forrester Research, Inc.

18. 16
COSTS
The composite organization experienced a number of costs associated with the Cloud for Sales solution:
›
Licensing costs.
›
Professional services and training costs.
›
Internal implementation costs.
These represent the mix of internal and external costs experienced by the composite organization for initial planning,
implementation, and training associated with the solution.
Licensing Costs
The composite organization incurs a monthly fee of $80 per license. Note that this is the list pricing, and different
organizations may have different licensing agreements. The composite organization started in Year 1 with licensing for 75
sales reps, managers, directors, and support staff, increasing to 100 in Year 2 and 125 in Year 3. Table 10 illustrates the
calculations for these for a total of $288,000 in licensing fees over three years.
TABLE 10
Licensing Costs
Ref.
Metric
G1
Number of users
G2
License cost per month
Gt
Licensing cost (not risk adjusted)
Calculation
Year 1
Year 2
Year 3
75
100
125
$80
$80
$80
($72,000)
($96,000)
($120,000)
Source: Forrester Research, Inc.
Professional Services And Training Costs
The composite organization paid a one-time upfront cost to SAP Cloud for Sales for professional services helping with the
planning, implementation, and development of training for the Cloud for Sales investment. In addition, the composite
organization requires training, regardless of role, for all users of Cloud for Sales. The organization incurs two types of internal
costs to train users on the tool. The first cost, to train new users on the tool, is assumed to be $75 per new user. The model
assumes that 75 users start in Year 1, with an additional 25 new users in Year 2 and Year 3. The second cost is for recurring
training to ensure that users are up-to-date with the tool. The model assumes that the recurring training costs $50 per user.
The model assumes that the initial 75 users take recurring training in Year 2, and the following year, 100 users take the
recurring training. Table 11 illustrates how this was calculated.
Forrester found that what was spent on training varied from organization to organization. To compensate, this cost was riskadjusted up by 8%. For more information, see the section on Risks.

19. 17
TABLE 11
Professional Services And Training Costs
Ref.
Metric
Calculation
H1
Professional services and training
H2
Cost of new user training per user
H4
Total cost of new user training
H5
Number of users for recurring training
H6
Cost of recurring training per user
H7
Total cost of recurring training
Ht
Professional services and training costs (not
risk-adjusted)
Year 1
Number of users for new user training
H3
Initial
Year 3
$20,000
75
25
$75
$75
$5,625
$1,875
$1,875
75
100
$50
$50
$3,750
H2*H3
25
$75
$5,000
($5,625)
($6,875)
($6,075)
($7,425)
H5*H6
H1+H4+H7
($20,000)
($5,625)
 8%
Risk adjustment
Htr
Year 2
Professional services and training costs (riskadjusted)
($21,600)
($6,075)
Source: Forrester Research, Inc.
Internal Implementation Costs
Based on feedback from the interviewed organizations, Forrester estimates the composite organization will spend 1,000
man-hours for planning, training, and supporting the SAP Cloud for Sales to get up and running. Table 12 outlines the
calculation for this cost.
TABLE 12
Internal Implementation Costs
Ref.
Metric
I1
Average hourly salary
Itr
Internal implementation costs (not risk-adjusted)
Initial
Man-hours spent on implementation and training development
I2
Calculation
1,000
$48.08
I1*I2
Source: Forrester Research, Inc.
Total Costs
Table 13 shows the total of all costs as well as associated present values, discounted at 10%. Over three years, the
composite organization expects total risk-adjusted costs to total a net present value of a little more than $320,000.
$48,080

20. 18
TABLE 13
Total Costs (Risk-Adjusted)
Ref.
Cost
Initial
Year 1
Year 2
Year 3
Total
Present value
$0
($72,000)
($96,000)
($120,000)
($288,000)
($234,951)
Gtr
Licensing
Htr
Professional services and
training
($21,600)
($6,075)
($6,075)
($7,425)
($41,175)
($37,722)
Itr
Internal implementation
costs
($48,080)
$0
$0
$0
($48,080)
($48,080)
Total costs (risk-adjusted)
($69,680)
($78,075)
($102,075)
($127,425)
($377,255)
($320,753)
Source: Forrester Research, Inc.
FLEXIBILITY
Flexibility, as defined by TEI, represents an investment in additional capacity or capability that could be turned into business
benefit for some future additional investment. This provides an organization with the “right” or the ability to engage in future
initiatives but not the obligation to do so. There are multiple scenarios in which a customer might choose to implement Cloud
for Sales and later realize additional uses and business opportunities. Flexibility would also be quantified when evaluated as
part of a specific project described in more detail in Appendix B.
One particular scenario that could realize additional benefits in the future is further integration with back-end systems, with
the expectation that this will help organizations accelerate the sales cycles, drive more revenue, and deliver more value to
their customers.
RISKS
Forrester defines two types of risk associated with this analysis: “implementation risk” and “impact risk.” “Implementation risk”
is the risk that a proposed investment in Cloud for Sales may deviate from the original or expected requirements, resulting in
higher costs than anticipated. “Impact risk” refers to the risk that the business or technology needs of the organization may
not be met by the investment in Cloud for Sales, resulting in lower overall total benefits. The greater the uncertainty, the
wider the potential range of outcomes for cost and benefit estimates.

21. 19
TABLE 14
Benefit And Cost Risk Adjustments
Benefits
Adjustment
Increased sales due to better visibility
 6% — Medium
Improved efficiency of sales organization members
 6% — Medium
Improved collaboration between sales reps, sales managers, and sales directors
 6% — Medium
Improved time to closure
 6% — Medium
Time savings on report creation
 1% — Low
Savings from reduced legacy systems
 6% — Medium
Costs
Adjustment
Licensing
None
Professional services and training
 8% — Medium
Internal implementation costs
None
Source: Forrester Research, Inc.
Quantitatively capturing investment risk and impact risk by directly adjusting the financial estimates results provides more
meaningful and accurate estimates and a more accurate projection of the ROI. In general, risks affect costs by raising the
original estimates, and they affect benefits by reducing the original estimates. The risk-adjusted numbers should be taken as
“realistic” expectations since they represent the expected values considering risk.
The following impact risks that affect benefits are identified as part of the analysis:
›
Slower adoption than anticipated.
›
Employees resisting using new processes and methodologies through SAP Cloud for Sales.
›
Variability in efficiencies gained and time saved depending on employee engagement.
›
Variability in average deal size.
The following implementation risk that affects costs is identified as part of this analysis:
›
Internal labor needed for planning, implementation and training is higher than expected.
Table 14 shows the values used to adjust for risk and uncertainty in the cost and benefit estimates. Readers are urged to
apply their own risk ranges based on their own degree of confidence in the cost and benefit estimates.

22. 20
Financial Summary
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback
period for the organization’s investment in Cloud for Sales.
Table 15 below shows the risk-adjusted ROI, NPV, and payback period values. These values are determined by applying the
risk-adjustment values from Table 14 in the Risks section to the unadjusted results in each relevant Costs and Benefits
section.
FIGURE 3
Cash Flow Chart (Risk-Adjusted)
Financial analysis (risk-adjusted)
$3,000,000
$2,500,000
Cash flows
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
($500,000)
Initial
Year 1
Total Costs
Year 2
Total Benefits
Year 3
Running Total
Source: Forrester Research, Inc.
TABLE 15
Cash Flow: Risk-Adjusted
Initial
Total costs
Year 1
Year 2
Year 3
Total
Present value
($69,680)
($78,075)
($102,075)
($127,425)
($377,255)
($320,753)
$0
$664,863
$935,819
$1,387,844
$2,988,526
$2,420,533
($69,680)
$586,788
$833,744
$1,260,419
$2,611,271
$2,099,780
Total benefits
Net benefits
ROI
Payback period
655%
1.4 months
Source: Forrester Research, Inc.

23. 21
SAP Cloud For Sales: Overview
The following information is provided by SAP. Forrester has not validated any claims and does not endorse SAP or its
offerings.
High-performing sales organizations are super-charging their sales forces with SAP Cloud for Sales. Built for the needs of
today’s sellers with a beautiful user experience, SAP Cloud for Sales is a modern, smart sales solution that goes far beyond
sales force automation. SAP Cloud for Sales drives sales effectiveness through social collaboration, real-time customer
insight, out-of-the-box analytics, flawless deal orchestration and complete mobile apps — all without putting a strain on IT.
Sales professionals and sales managers target the right accounts, gain the insight they need to proactively guide customers
through the buying journey, execute deals flawlessly and deliver a great buying experience that keeps customers coming
back. Learn more now about SAP Cloud for Sales and its key features:
Personalization And Productivity
›
›
›
›
Drive rapid adoption with a
“consumerized” sales rep-centric
user experience.
Improve efficiency with quick-create
and shortcut capabilities.
Use the Shelf to bookmark tagged
and flagged items for one-click
access to the information that’s most
important to you.
Personalize and organize layouts and
tabs based on your preferences and
working style.
In-Context Social Collaboration
›
Use native Feed for instant
collaboration with team members and
your sales network in the context of
your accounts, contacts,
opportunities, competitors, and more.
›
Crowdsource and share sales best practices and find the right experts relevant to each stage of the deal.
›
Collaborate on customer documents, and plan and prepare for customer interactions more effectively.
›
Connect with customers in real time to answer questions without delay and accelerate decision-making.
Social Selling
›
Learn what your customers care about and leverage your network to engage with decision-makers earlier in the buying
journey.
›
Turn every cold call into a warm introduction.
›
Make every interaction personalized and relevant.

24. 22
Prospecting And Predictive Lead And Opportunity Management
›
Create and track marketing and sales campaigns.
›
Gain predictive insights on the right leads to focus on.
›
Understand who the key decision-makers are and identify their trusted advisors.
›
Leverage insight from marketing automation systems to know where your prospects have been, what they’ve responded
to, and when they’re ready to engage.
›
Easily track opportunity stage, status, and value, and relevant products, contacts, account team, activities, and more.
›
Collaborate with team members and customers in the context of each deal.
Account Management And Sales Intelligence
›
Target the right accounts — ones that align to your value prop and have the greatest propensity to buy.
›
Manage accounts easily and more effectively.
›
Gain real-time account updates and sales intelligence.
›
Uncover new sales opportunities quickly and have everything you need to know about your customers in one place.
Flawless Deal Orchestration
›
›
Provide sales professionals real-time pricing, quoting, sales orders, and more through native integration to your existing
enterprise systems.
Seamlessly orchestrate the end-to-end opportunity from prospect to payment.
Complete Mobile Apps
›
Have the entire office in your pocket while on the road — out-of-the-box in minutes without the cost or complexity of
custom apps.
›
Use your favorite device with support for Apple iOS, Android, and BlackBerry devices.
›
Orchestrate deals flawlessly — anytime, anywhere.
Microsoft Outlook And Lotus Notes Support
›
Increase productivity with convenient access to SAP Cloud for Sales in Microsoft Outlook and Lotus Notes.
›
Automatically sync emails, appointments, tasks, contacts, and more — no double data entry.
Insightful Sales Analytics
›
Track real-time sales performance with a complete library of prebuilt dashboards.
›
Generate and review forecasts and easily create configurable reports.
›
Identify how best to make your number and where to focus with pipeline simulation.

25. 23
Appendix A: Composite Organization Description
For this TEI study, Forrester has created a composite organization to illustrate the quantifiable benefits and costs of
implementing SAP Cloud for Sales. The composite company is intended to represent US-based sales organization with
employees spread across the globe and is based on characteristics of the interviewed customers.
The composite company has the following characteristics:
›
›
The annual revenue of the composite organization is $50 million a year.
The composite organization employs 100 salespeople, with 10 sales managers, three directors and 12 individuals in sales
support roles.
›
The composite organization has 5,000 deals a year, with an average deal size of $10,000.
›
The composite organization has deployed SAP Cloud for Sales to support its sales team and sales staff.
FRAMEWORK ASSUMPTIONS
Table 16 provides the model assumptions that Forrester used in this analysis.
The discount rate used in the PV and NPV calculations is 10% and time horizon used for the financial modeling is three
years. Organizations typically use discount rates between 8% and 16% based on their current environment. Readers are
urged to consult with their respective company’s finance department to determine the most appropriate discount rate to use
within their own organizations.
TABLE 16
Model Assumptions
Ref.
Metric
Calculation
Value
C1
Hours per week
40
C2
Weeks per year
52
C3
Hours per year (M-F, 9-5)
2,080
C4
Hours per year (24x7)
8,736
C5
Average fully loaded salary
C6
Average hourly salary
Source: Forrester Research, Inc.
$105,000
$48.08

26. 24
Appendix B: Total Economic Impact™ Overview
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decisionmaking 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.
The TEI methodology consists of four components to evaluate investment value: benefits, costs, flexibility, and risks.
BENEFITS
Benefits represent the value delivered to the user organization — IT and/or business units — by the proposed product or
project. Often, product or project justification exercises focus just on IT cost and cost reduction, leaving little room to analyze
the effect of the technology on the entire organization. The TEI methodology and the resulting financial model place 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. Calculation of benefit estimates involves a clear dialogue with the user organization to understand
the specific value that is created. In addition, Forrester also requires that there be a clear line of accountability established
between the measurement and justification of benefit estimates after the project has been completed. This ensures that
benefit estimates tie back directly to the bottom line.
COSTS
Costs represent the investment necessary to capture the value, or benefits, of the proposed project. IT or the business units
may incur costs in the form of fully burdened labor, subcontractors, or materials. Costs consider all the investments and
expenses necessary to deliver the proposed value. In addition, the cost category within TEI captures any incremental costs
over the existing environment for ongoing costs associated with the solution. All costs must be tied to the benefits that are
created.
FLEXIBILITY
Within the TEI methodology, direct benefits represent one part of the investment value. While direct benefits can typically be
the primary way to justify a project, Forrester believes that organizations should be able to measure the strategic value of an
investment. Flexibility represents the value that can be obtained for some future additional investment building on top of the
initial investment already made. As an example, an embedded collaboration feature may translate to greater worker
productivity if activated. The collaboration can only be used with additional investment in training at some future point.
However, having the ability to capture that benefit has a PV that can be estimated. The flexibility component of TEI captures
that value.
RISKS
Risks measure the uncertainty of benefit and cost estimates contained within the investment. Uncertainty is measured in two
ways: 1) the likelihood that the cost and benefit estimates will meet the original projections, and 2) the likelihood that the
estimates will be measured and tracked over time. TEI applies a probability density function known as “triangular distribution”
to the values entered. At a minimum, three values are calculated to estimate the underlying range around each cost and
benefit.

27. 25
Appendix C: Glossary
Discount rate: The interest rate used in cash flow analysis to take into account the time value of money. Companies set
their own a discount rate based on their business and investment environment. Forrester assumes a yearly discount rate of
10% for this analysis. Organizations typically use discount rates between 8% and 16% based on their current environment.
Readers are urged to consult their respective organizations to determine the most appropriate discount rate to use in their
own environment.
Net present value (NPV): The present or current value of (discounted) future net cash flows given an interest rate (the
discount rate). A positive project NPV normally indicates that the investment should be made, unless other projects have
higher NPVs.
Present value (PV): The present or current value of (discounted) cost and benefit estimates given at an interest rate (the
discount rate). The PV of costs and benefits feed into the total NPV of cash flows.
Payback period: The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs)
equal initial investment or cost.
Return on investment (ROI): A measure of a project’s expected return in percentage terms. ROI is calculated by dividing
net benefits (benefits minus costs) by costs.
A NOTE ON CASH FLOW TABLES
The following is a note on the cash flow tables used in this study (see the example table below). The initial investment
column contains costs incurred at “time 0” or at the beginning of Year 1. Those costs are not discounted. All other cash flows
in Years 1 through 3 are discounted using the discount rate (shown in Framework Assumptions section) at the end of the
year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations are not calculated until the
summary tables are the sum of the initial investment and the discounted cash flows in each year.
TABLE [EXAMPLE]
Example Table
Ref.
Metric
Calculation
Year 1
Year 2
Year 3
Source: Forrester Research, Inc.
Appendix D: Endnotes
1
Forrester risk-adjusts the summary financial metrics to take into account the potential uncertainty of the cost and benefit
estimates. For more information see the section on Risks.