the total economic impact™ of opentextmimage.opentext.com/alt_content/binary/pdf/opentext...after...

A Forrester Total Economic

Impact™ Study

Commissioned By

OpenText

Project Director:

Anish Shah

December 2014

The Total Economic

Impact™ Of OpenText Cost Savings And Business Benefits

Enabled By OpenText Customer

Experience Management (CEM) Suite

Table Of Contents

Executive Summary .................................................................................... 3

Disclosures .................................................................................................. 5

TEI Framework And Methodology ............................................................ 6

Analysis ........................................................................................................ 7

Financial Summary ................................................................................... 16

OpenText Experience Suite: Overview ................................................... 17

Appendix A: Interviewed Organization Description ............................. 18

Appendix B: Total Economic Impact™ Overview ................................. 19

Appendix C: Forrester And The Age Of The Customer ....................... 20

Appendix D: Glossary ............................................................................... 21

Appendix E: Endnotes .............................................................................. 22

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3

Executive Summary

OpenText commissioned Forrester Consulting to conduct a

Total Economic Impact™ (TEI) study and examine the

potential return on investment (ROI) enterprises may

realize by deploying OpenText Customer Experience

Management (CEM) Suite solutions. The OpenText CEM

Suite includes capabilities from the following products:

OpenText Web Experience Management (WEM),

OpenText High Performance Web Delivery (caching),

OpenText Media Management (DAM), OpenText Adobe

Drive Connector, OpenText Media Hub Portlets, OpenText

Tempo Social, OpenText Portal, OpenText Customer

Communication Management (CCM), OpenText AppWorks

Gateway, and OpenText Directory Services. The purpose

of this study is to provide readers with a framework to

evaluate the potential financial impact of implementing

OpenText CEM Suite on their organizations, to leverage

the software and related solutions to win, serve, and retain

customers.

To better understand the benefits, costs, and risks associated with an OpenText CEM Suite implementation, Forrester

interviewed an existing customer (Sprint) with multiple years of experience using the software platform to enhance its

customer experience across channels by leveraging responsive design and display content and engaging prospects and

customers with more content-centric touch points and experiences.

Prior to using OpenText’s CEM Suite and web content management solution, Sprint was using two disparate portals — one

for its sales team and the other for the rest of the organization, including HR, finance, and other business groups, providing

an inconsistent experience and increased overhead for management. Sprint developed an internal business case to move to

OpenText CEM Suite, combining the portals into one content system that has the same look and feel and a single hierarchy

of navigation protocols.

OPENTEXT CEM SUITE REDUCES MARKETING COSTS AND INCREASES IT AND BUSINESS PRODUCTIVITY

Our interview with Sprint and subsequent financial analysis found that the organization experienced the risk-adjusted ROI,

benefits, and costs shown in Figure 1.1 The analysis points to three-year benefits of about $3.9 million versus initial license

and implementation costs of $1.3 million and ongoing labor and support costs of $440,000 per year, adding up to a three-

year net present value (NPV) of $810,000.

FIGURE 1

Financial Summary Showing Three-Year Risk-Adjusted Results

ROI: 34%

Payback: 23-24 months

Three-year benefits: $3.9 million

Three-year NPV: $810,000

Source: Forrester Research, Inc.

OpenText CEM Suite can help increase revenue

through delivering more-relevant and targeted

customer experience, increase IT productivity, and

increase marketing efficiency through its web

content management platform, which helps create

targeted customer interactions across geographies.

The costs and benefits over three years for Sprint,

the United States’ third-largest telecommunications

provider, based on an in-depth interview with a

senior manager of CEM, are:

License and maintenance costs: $936,000.

Professional service fees: $712,600.

Annual labor cost: $975,000.

Total three-year benefits: $3.9 million.

4

› Benefits. The interviewed organization experienced the following risk-adjusted benefits:

• An up to 10% increase in customer

acquisition. The OpenText CEM Suite enabled

an increase in new customer acquisitions by up

to 10% by having the ability to more easily

access, store, and share information. As a result,

in Year 1, Forrester estimates Sprint realized a

5% attribution of revenue lift, increasing to 10%

by Year 3. This data is based on Forrester

Research assumptions of Sprint’s environment.

• A 25% increase in IT productivity. Forrester

estimates Sprint realized IT productivity

efficiencies of 25% over its previous ways of

managing information and content.

• Marketing efficiencies of approximately

$287,000 per year. Forrester estimates that

Sprint experienced cost savings of approximately

$287,000 per year through an increase in

productivity of the marketing team, which is

responsible for analytics and updating the

website’s content. This data is based on

Forrester Research assumptions of Sprint’s

environment.

› Costs. The interviewed organization experienced the

following risk-adjusted costs:

• Initial enterprise license and annual

maintenance costs totaling $936,000 over

three years. Sprint purchased enterprise wide

licenses of OpenText CEM Suite for $585,000.

Additionally, annual support and maintenance

fees of $117,000, including software upgrades,

were incurred.

• Professional service fees to implement the

solution and then ongoing direct and indirect

labor costs of approximately $1.7 million over three years. Sprint paid professional service fees of $712,600 to

implement the OpenText CEM suite into its environment. Additionally, Sprint has both direct full-time employees

(FTEs) who manage OpenText CEM Suite in-house at Sprint, as well as indirect FTEs, including database and

system architects, who support the solution on an ongoing basis. The direct and indirect costs are approximately

$325,000 per year.

“With OpenText CEM Suite, we now

are getting message consistency and

information consistency to better

service our customers across all of

our channels.”

~ Senior manager of CEM, Sprint

5

Disclosures

The reader should be aware of the following:

› The study is commissioned by OpenText 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 OpenText CEM Suite.

› OpenText 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.

› OpenText provided the customer name for the interview but did not participate in the interviews.

6

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 OpenText CEM Suite. The objective of the framework is to identify the cost,

benefit, flexibility, and risk factors that affect the investment decision, to help organizations understand how to take

advantage of specific benefits, reduce costs, and improve the overall business goals of winning, serving, and retaining

customers.

APPROACH AND METHODOLOGY

Forrester took a multistep approach to evaluate the impact OpenText CEM Suite can have on an organization (see Figure 2).

Specifically, we:

› Interviewed OpenText marketing, sales, and/or consulting personnel, along with Forrester analysts, to gather data relative

to the marketplace for OpenText CEM Suite.

› Interviewed one organization currently using OpenText, to obtain data with respect to costs, benefits, and risks.

› Constructed a financial model representative of the interview using the TEI methodology. The financial model is populated

with the cost and benefit data obtained from the interview.

› Risk-adjusted the financial model based on issues and concerns the interviewed organization highlighted in interviews.

Risk adjustment is a key part of the TEI methodology. While the interviewed organization 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 are detailed in each

relevant section.

Forrester employed four fundamental elements of TEI in modeling OpenText CEM Suite: 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.

FIGURE 2

TEI Approach


Perform due diligence

Conduct customer interview

Construct financial model using TEI

framework

Write case study

7

Analysis

INTERVIEWED ORGANIZATION

For this study, Forrester conducted an in-depth

interview with the senior manager of CEM for Sprint,

which has been a customer of OpenText for over 10

years.

Based on the in-depth interview, Forrester constructed

a TEI framework and an associated ROI analysis that

illustrates the areas financially affected. Sprint is the

customer of OpenText that Forrester interviewed, and

has the following characteristics:

› Is the third-largest telecommunications and wireless

network operator in the US.

› Has annual revenues of over $35 billion.

› Is headquartered in Overland, Kansas with over

30,000 employees worldwide.

› Serves more than 55 million customers.

› Operates wireless and wireline networks to serve

individual consumers and business customers.

› Is widely recognized for developing, engineering, and

deploying innovative technologies, including the first

wireless 4G service from a national carrier in the

United States.

› Continues to operate leading prepaid brands such as

Virgin Mobile USA, Boost Mobile, and Assurance Wireless.

INTERVIEW HIGHLIGHTS

Situation

Forrester interviewed a senior manager of CEM, who is responsible for managing the OpenText CEM Suite within Sprint as

well as for managing the relationship with OpenText. Sprint made the decision to move to a comprehensive CEM platform

because the corporation was managing two separate, disparate web experience management platforms. One was solely

dedicated to the sales team, and the other was for all the other businesses, including HR and finance teams.

Additionally, there were challenges with managing information across different parts of the organization. Sprint customer

service representatives were not getting access to critical customer care information to effectively understand and resolve

customer issues. This unconsolidated information led to inconsistent messaging being provided to customers and

employees. Sprint also wanted to rationalize its applications and drive operational efficiencies.

The senior manager of CEM said, “Both of our platforms that we had running were old and in need of an update, and rather

than updating two, we took that as an opportunity to get in a cutting-edge software stack with which we can reap the rewards

of operational efficiencies and deliver a great experience to our customers.”

“OpenText CEM Suite has brought new

cutting-edge software and brand new

hardware that allows Sprint to engage

our customers better while realizing

operational efficiencies and reduce

burden on the IT team from a backend

support perspective. OpenText CEM

Suite has made Sprint much more

organized, and it is a much better

solution for us. We are more definitely

more productive as a result.”


8

After reviewing comparable customer experience management solutions, Sprint selected OpenText CEM Suite Web

Experience Management (WEM) 8.1. The decision was made because of the platform’s ability to provide an enterprise wide

solution to integrate its content across businesses and manage it as one critical asset.

Results

The interview with Sprint’s senior manager of CEM revealed that:

› OpenText CEM Suite creates a richer, more interactive online experience and is consistent across multiple

channels, which allows Sprint to win, serve, and retain customers. There is integration across Sprint’s websites,

mobile devices, and social networks, which

will manage the content across the

customer life cycle without sacrificing the

organization’s information governance

requirements.

› OpenText CEM Suite increases customer

acquisition for Sprint. The interview

revealed that due to more-consistent and

targeted communication across various

customer touch points, Sprint is able to

more effectively acquire new customers.

› OpenText CEM Suite increases IT

productivity through decreasing the

support cost of managing disparate

systems and having a more user-friendly

interface to manage software. Sprint was

able to increase its IT support productivity

by decreasing the percentage of time

managing content across multiple channels.

› A centralized system to dynamically and

consistently engage customers across

the Web and other channels allows

Sprint to be more efficient with its

marketing efforts. OpenText CEM Suite provides a software platform that is built for high volume across multiple

channels. Sprint was able to gain productivity and reduce its costs related to executing marketing campaigns and

messaging to its customers in line with both internal and external government policies and guidelines.

“We chose OpenText CEM solution because

it was just a much more robust system that

you can do a lot more with. Sprint had

different use cases, and OpenText CEM

Suite applications had the ability to meet

most of them without much customization

or major development efforts.”


9

BENEFITS

As part of the analysis, Forrester estimated Sprint experienced a number of quantified benefits related to the OpenText

platform:

› Increase in customer acquisition rate by 5% to 10%.

› Increase in IT support productivity by 25%.

› Reduction in marketing costs of 40%.

Increase In Customer Acquisition Rate

The interview with Sprint indicated that implementing OpenText CEM Suite allowed the corporation to more

effectively convert prospects into customers through its channels. OpenText CEM Suite allowed Sprint to leverage

responsive design to display content consistently across mobile devices and platforms and gather real-time

customer insights and optimize its content, which had a direct impact on its customer acquisition rate.

Based on Forrester’s own research, an increase in Sprint’s customer acquisition rate was calculated (see Table 1)

based on an estimate that 20% of Sprint’s net new annual customers can be linked to customer engagement

activities across the Web and other channels. OpenText CEM solutions enable Sprint to deliver meaningful

conversations with its prospects and in its first three years attributed to about 5% to 10% of net new customer

acquisitions.

TABLE 1

Increase In Customer Acquisition Rate


Ref. Calculation Initial Year 1 Year 2 Year 3 Total

Present

Value

A1 275,000 300,000 325,000

A2 20% 20% 20%

A3 200$ 200$ 200$

A3 5% 7% 10%

At $0 $550,000 $840,000 $1,300,000 $2,690,000 $2,170,924

100%

Atr $0 $550,000 $840,000 $1,300,000 $2,690,000 $2,170,924

Net contribution from new

customer per year

Metric

Total number of new Sprint

subscribers (customers)

Direct revenue from increase in

customer acquisition

Risk Adjustment

Direct revenue from

increase in customer

acquisition (Risk-Adjusted)

Percentange of customer

acquisition increased due to

customer experience and

touchpoiints

Percentage of direct attribution

linked to CEM Suite

10

Increase In IT Productivity

Sprint indicated that another key benefit from the OpenText CEM Suite implementation was a significant savings

in IT support required to manage its customer management and experience technology tools across multiple

channels. Prior to its investment in OpenText CEM Suite, Sprint had IT resources dedicated with specialists

managing content and providing support across web, mobile, and social media channels. As a result, there was

an increased burden and demand on the IT resources to provide consistent support across multiple platforms.

Upon implementing OpenText CEM Suite, Sprint saw a measureable impact to its IT staff productivity. Sprint has

30 IT employees dedicated to supporting marketing channels. It has seen a 25% increase in productive time,

which results in a risk-adjusted three-year NPV of approximately $320,000 (see Table 2).

TABLE 2

Increase In IT Productivity



Present

Value

B1 30 30 30

B2 75$ 75$ 75$

B3 2,040 2,040 2,040

B4 100% 100% 100%

B5 50% 50% 50%

B6 25% 25% 25%

Bt B1*B2*B3*B6 $0 $143,438 $143,438 $143,438 $430,313 $356,708

90%

Btr $0 $129,094 $129,094 $129,094 $387,281 $321,037

Increase in IT Productivity

from the additional time

savings - OpenText CEM

Solution Suite (Risk-

Adjusted)

Average hourly burden rate IT

employee

Number of working hours per

year

Increase in IT Productivity from

the additional time savings -

OpenText CEM Solution Suite

Metric

Number of IT Employees

supporting marketing channels

Risk Adjustment

Percentage increase in

productive time from efficiency

gains by implementing CEM

solution

Percentage of IT employees

time managing Web, Mobile,

and Online applications

11

Reduction In Marketing Costs

Sprint indicated that an additional value derived from the OpenText CEM Suite implementation is its ability to

make its internal marketing team more productive. Based on Forrester’s own research, the marketing team

gained 350 hours of efficiencies within its marketing team, which is responsible for using analytics to deliver

campaigns and update as well as author new content on Sprint’s website.

Sprint increased its marketing team productivity by 40%, which resulted in savings of approximately $319,000 per

year (see Table 3).

TABLE 3

Reduction In Marketing Costs



Present

Value

C1 350 350 350

C2 12 12 12

C3 190$ 190$ 190$

C4 40% 40% 40%

Ct $0 $319,200 $319,200 $319,200 $957,600 $793,803

90%

Ctr $0 $287,280 $287,280 $287,280 $861,840 $714,423

Metric

Average time (hours) dedicated

to analytics, segmentation,

and authoring website content

Reduction in marketing cost

per FTE (marketing efficiency)

Risk Adjustment

Reduction in marketing cost

per FTE (marketing

efficiency) (Risk-Adjusted)

Number of marketing team

FTEs

Average hourly cost of

marketing FTE

Increase in marketing team

productivity from implementing

CEM solution

12

Total Benefits

Table 4 shows the total of all benefits across the three areas listed above, as well as present values (PVs) discounted at

10%. Over three years, Sprint experienced risk-adjusted total benefits to be a present value of about $3.2 million.

TABLE 4

Total Benefits (Risk-Adjusted)


Ref. Initial Year 1 Year 2 Year 3 Total

Present

Value

Atr $0 $550,000 $840,000 $1,300,000 $2,690,000 $2,170,924

Btr $0 $129,094 $129,094 $129,094 $387,281 $321,037

Ctr $0 $287,280 $287,280 $287,280 $861,840 $714,423

$0 $966,374 $1,256,374 $1,716,374 $3,939,121 $3,206,384

Benefit Category

Direct Revenue from increase in customer

acquisition rate (Forrester Research &

Assumptions)

Reduction in Marketing Costs (Forrester Resarch

& Assumptions)

Total Benefits (Risk-Adjusted)

Increase in IT support productivity

13

COSTS

Sprint experienced the following two costs associated with the OpenText CEM Suite:

› Enterprise software license and annual maintenance costs.

› Initial professional service costs and ongoing direct and indirect labor costs.

These represent the costs experienced by Sprint for initial implementation and ongoing maintenance associated with the

solution.

Enterprise Software License And Annual Maintenance Costs

Sprint incurred $585,000 in fees to acquire software licenses to implement OpenText CEM Suite into its

environment. Additionally, Sprint spends about $117,000 in annual maintenance costs, which includes support

services, integration of other systems, and ongoing software updates. This resulted in about $936,000 in costs

over three years for Sprint (see Table 5).

Implementation and maintenance costs vary from organization to organization, considering different licensing

agreements, what other products may be licensed from the same vendor, and other discounts.

TABLE 5

Enterprise Software License And Annual Maintenance Costs


Initial Professional Service Costs And Ongoing Direct And Indirect Labor Costs

Sprint incurred about $712,000 in professional service fees to implement OpenText’s CEM solution into its

environment. Sprint also incurs about $325,000 in both direct and indirect labor costs to support OpenText CEM

Suite each year. Sprint has 2.5 full-time support resources of the environment. It has one dedicated resource in

the US and another 1.5 offshore resources who support the OpenText CEM solution. Additionally, Sprint incurs

indirect labor costs from the support of other engineers, developers, DBAs, and architects. This amounts to about

an additional $150,000 in labor costs for the organization. For Sprint, this resulted in a three-year PV cost of

about $1.5 million (see Table 6).


Present

Value

D1 $585,000

D2 $117,000 $117,000 $117,000 $351,000 $290,962

100%

Dtr $585,000 $117,000 $117,000 $117,000 $936,000 $875,962

Metric

Enterprise Software License

Annual Maintenance and

Support Costs

Risk Adjustment

Annual Maintenance and

Support Costs (Risk-

Adjusted)

14

Maintenance costs are more variable from organization to organization, considering some organizations

outsource and some manage this in-house, perhaps augmented with third-party consulting help.

TABLE 6

Initial Professional Service Costs And Ongoing Direct And Indirect Labor Costs


Total Costs

Table 7 shows the total of all costs as well as associated present values, discounted at 10%. Over three years, the

interviewed organization expects total costs to total a net present value of about $2.4 million.

TABLE 7

Total Costs



Present

Value

E1 $100,000 $100,000 $100,000

E2 $75,000 $75,000 $75,000

E3 $150,000 $150,000 $150,000

E4 $712,600

Et $712,600 $325,000 $325,000 $325,000 $1,687,600 $1,520,827

100%

Etr $712,600 $325,000 $325,000 $325,000 $1,687,600 $1,520,827

Metric

Onshore FTEs to manage

CEM solution suite (1 FTE

@$100,000/Year)

Total Implementation and

Ongoing Labor Costs

Professional Service Fees

(Implementation)

Risk Adjustment

Total Implementation and

Ongoing Labor Costs (Risk-

Adjusted)

Offshore FTE to manage CEM

solution (2 FTE @

$50,000/year)

Indirect Labor - DBAs, System

Architects, Engineers

Ref. Initial Year 1 Year 2 Year 3 Total

Present

Value

Dtr ($585,000) ($117,000) ($117,000) ($117,000) ($936,000) ($875,962)

Etr ($712,600) ($325,000) ($325,000) ($325,000) ($1,687,600) ($1,520,827)

($1,297,600) ($442,000) ($442,000) ($442,000) ($2,623,600) ($2,396,789)

Cost Category

Enterprise software license and annual

maintenance costs

Total Costs (Risk-Adjusted)

Professional fees and onging direct and indirect

labor costs

15

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 flexibility 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 OpenText CEM Suite 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).

OpenText CEM Suite instances at Sprint have the potential for more customization and functionality. Sprint has the

opportunity to use more-sophisticated features and functionality through customization that will allow Sprint to further

manage and share disparate amounts of content across its organization. Additionally, Sprint has the flexibility to scale up the

number of users who can both engage with the platform as well as benefit from its value additions, without increasing costs.

OpenText CEM Suite, including its Web Experience Management (WEM), is built for high-volume, transaction-oriented web

applications across all customer-centric touchpoints. It offers great scalability both to manage the company’s internal intranet

or outside-facing websites, extranets, and individual product or marketing-campaign specific microsites. The solution is

architected for the global enterprise, and its interface is designed for business users. Its simplified features and ease of

integration with other systems provides a lot of flexibility for the company in the way it engages with its prospects and

customers and delivers an overall experience that is unique and targeted to its customers.

RISK

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 OpenText CEM Suite 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 OpenText CEM Suite, resulting in lower overall total benefits. The greater

the uncertainty, the wider the potential range of outcomes for cost and benefit estimates.

TABLE 8

Benefit And Cost Risk Adjustments

Benefits Adjustment

Increase in customer acquisition rate N/A

Increase in IT productivity 10%

Reduction in marketing costs 10%


Quantitatively capturing implementation 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.

16

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 interviewed organization’s investment in OpenText CEM Suite.

Figure 3 below shows the risk-adjusted ROI, NPV, and payback period values. These values are determined by applying the risk-adjustment values from Table 8 in the Risks section to the unadjusted results in each relevant cost and benefit section.

FIGURE 3

Cash Flow Chart (Risk-Adjusted)


TABLE 9

Cash Flow (Risk-Adjusted)


($1,500,000)

($1,000,000)

($500,000)

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

Initial Year 1 Year 2 Year 3

Cas

h F

low

s

Financial Analysis (risk-adjusted)

Total Costs Total Benefits Cumulative Total

Initial Year 1 Year 2 Year 3 Total

Present

Value

Total Costs ($1,297,600) ($442,000) ($442,000) ($442,000) ($2,623,600) ($2,396,789)

$0 $966,374 $1,256,374 $1,716,374 $3,939,121 $3,206,384

($1,297,600) $524,374 $814,374 $1,274,374 $1,315,521 $809,595

34%

23.4

ROI

Payback Period (months)

Summary

Total Benefits

Total

17

OpenText Experience Suite: Overview

Organizations are seeing a rise in customer-centric behavior and looking at digital transformation within their internal

departments and across their partner ecosystem. Technology and customer interactions have advanced to a height that

requires a rich and consistent digital presence across many channels for success in the global marketplace. The challenge is

to extract value from managed content and optimize and personalize information delivery to bridge the chaotic interactive

world with the secure data repositories behind the firewall.

OpenText is helping organizations orchestrate data, media, interactions, and transactions across a digital enterprise. The

complexity of managing a consistent brand presence across media, languages, cultural expectations, and governmental

regulations requires a platform built for pervasive connectivity and new ways of interacting that go beyond point-and-click.

The OpenText Experience Suite helps business leaders harmonize the technology applications with the customer

experience across every department in the organization. Whether the organization’s first priority is to get a handle on all of

the rich media (video, audio, print, imagery, etc.) or to streamline its communications, invoices, or web presence, the

OpenText Experience Suite platform offers market-leading digital asset management, web content management,

customer communications management, and social and portal capabilities to address them all in one solution.

The OpenText Experience Suite platform offers a media library to house digital assets from creation to distribution. It also

provides a web experience intelligence engine to keep track of where content has been shared and published to keep the

destination channels (mobile, web, social, apps) up to date with changing content. The platform also has access to an

application gateway, OpenText AppWorks, to build mobile, web, or print-based applications. Developers can augment the

base Experience Suite platform to deliver industry- or functional-specific business apps. As the platform is built on open

standards such as HTML5 and responsive design concepts, the end user can implement true omnichannel experiences.

18

Appendix A: Interviewed Organization Description

For this TEI study, Forrester interviewed the senior manager of CEM at Sprint, based in the United States. The financial

analysis and case study to illustrate the quantifiable benefits and costs of implementing OpenText CEM Suite are based on

this in-depth interview. The interviewed organization has the following characteristics:

› Is the third-largest telecommunications and wireless network operator in the US.

› Has annual revenues of over $35 billion.

› Is headquartered in Overland, Kansas and has over 30,000 employees worldwide.

› Serves more than 55 million customers.

› Operates wireless and wireline networks to serve individual consumers and business customers.

› Is widely recognized for developing, engineering, and deploying innovative technologies, including the first wireless 4G

service from a national carrier in the United States.

› Continues to operate leading prepaid brands such as Virgin Mobile USA, Boost Mobile, and Assurance Wireless.

FRAMEWORK ASSUMPTIONS

Table 10 provides the model assumptions that Forrester used in this analysis.

The discount rate used in the PV and NPV calculations is 10%, and the 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 10

Model Assumptions

Ref. Metric Calculation Value

C1 Hours per year 2,040

C2 Average hourly cost — knowledge worker

globally $75

C3 Average hourly cost — IT support FTE $75

C4 Average hourly cost — compliance $150


19

Appendix B: Total Economic Impact™ Overview

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. TEI assists technology vendors in winning, serving, and retaining

customers.

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. For instance, an investment in an enterprisewide upgrade of an office productivity Suite can

potentially increase standardization (to increase efficiency) and reduce licensing costs. However, 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 risk factors are based on a probability density function known as

“triangular distribution” to the values entered. At a minimum, three values are calculated to estimate the risk factor around

each cost and benefit.

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Appendix C: Forrester And The Age Of The Customer

Technology-empowered organizations now know more about products and services, pricing, and reputation. Your

competitors can copy or undermine the moves you take to compete. The only way to win, serve, and retain customers is to

become customer-obsessed.

A customer-obsessed enterprise focuses its strategy, energy, and budget on processes that enhance knowledge of and

engagement with customers and prioritizes these over maintaining traditional competitive barriers.

CMOs and CIOs must work together to create this companywide transformation.

Forrester has a four-part blueprint for strategy in the age of the customer, including the following imperatives to help

establish new competitive advantages:

Transform the customer experience to gain sustainable competitive advantage.

Accelerate your digital business with new technology strategies that fuel business growth.

Embrace the mobile mind shift by giving customers what they want, when they want it.

Turn big data into business insights through innovative analytics.

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Appendix D: Glossary

Discount rate: The interest rate used in cash flow analysis to take into account the time value of money. Companies set

their own 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 the 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.

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.

TABLE [EXAMPLE]

Example Table

Ref. Metric Calculation Year 1 Year 2 Year 3


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Appendix E: 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.

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