The total economic impact (TEI) analysis performed by Forrester is truly an eye-opener for corporate decision-makers. It analyzes a number of variables, which play a key role in determining the return on investment (ROI). The report provides a detailed outline of initial and ongoing costs, such as license fees and training expenses. Google commissioned the study to help businesses understand the real value of its cloud-based tools on day-to-day operations. Until now, many entities lacked detailed insights when it comes to quantifying the monetary benefits.
Key Findings of Cloud to Cloud Migration Study
Known for its user flexibility and robust security, Google Apps for Work has gained considerable traction in the enterprise realm. These gains are spurred by the number of organizations switching to the platform.
The following TEI findings will help you fully understand the difference Google Apps brings to your company.
- Improved mobility - the flexibility of cloud-based apps for business enables your team to reduce travel costs. It becomes easy to work in the moment using a variety of devices in any location. Applications like Hangout transform how your team communicates and holds meetings.
- Increased ROI – Forrester analysts revealed that companies can enjoy a massive risk-adjusted return on investment of up to 304 percent over three years.
- Monetary benefits of collaboration efficiency – using Google Docs, Sheets and Slides to collaborate streamlines operational processes, which saves your team at least two hours per week. In turn, this translates to over $8 million in savings in a period of three years.
- Lower legacy IT costs – Google's cloud-based solutions eliminate or reduce your company's dependency on on-premise storage options like servers. This helps lower costs associated with licensing, maintenance and updates. Decommissioning legacy servers and software has the capacity to save millions.
- Legacy telephony cost savings – using Google Apps for Work for meetings or communication is a practical way to lower videoconferencing and telephone costs.
TEI framework and methodology
Forrester conducted the economic impact analysis using organizations, which were planning to switch to Google. The consulting firm focused on a variety of factors that influence investment decisions, such as flexibility, risk factors, benefit and costs. The primary objective of the analysis was to help companies make informed decisions. In addition, the study allows businesses to maximize benefits by gaining a deeper understanding of how to take advantage of specific operational benefits.
Forrester Consulting evaluated the impact that Google Apps for Work on company operations by taking a multistep approach. Some of the steps taken include:
- Forrester analysts interviewed Google product personnel and several companies already using Google Apps. This was aimed at obtaining specific data relating to benefits, risks, costs and the marketplace.
- The experts used the TEI methodology to formulate a financial model that is representative of the interviews. Risk adjustment was a key factor in the development of the model.
- The analysts created a composite organization based on the structural characteristics of the companies involved in the interviews. The hypothetical entity is a multinational services firm involved in business-to-business (B2B) activities. It has 10,000 employees and an annual revenue of $4 billion.
Change management for Cloud Productivity
The total economic impact (TEI) analysis highlighted the need for companies to adopt proper change management practices. The approach helps maximize adoption by employees. For this reason, Forrester hired a third-party entity to handle change management communications and to design training materials for the composite organization. This was aimed at maximizing the benefits of integrating Google Apps for Work. The analysts adjusted change management costs of the composite organization to compensate for differences, which occur between firms. The variations are attributed to various factors, including budget and levels of resistance to adoption, among other external and internal factors.
In the impact study, the hypothetical firm accrued change management services expenses of up to $212,500. The amount rose by 20 percent to $255,000 after risk adjustment. Analysts highlighted the need to conduct proper training, in spite of these costs. On the other hand, the majority of companies can take advantage of the popularity of some Google Apps for Business. This translates to considerable savings when it comes to training because many employees are already familiar with applications like Google Docs, Gmail and Google Drive. As such, costs of internal training can vary depending on staff exposure to Google Apps for Business before the integration.
However, the analysts urge decision-makers to avoid assuming that every employee is familiar with all Google applications. In addition, there is a marked difference between using Google apps on a personal level and for work. Employees need to understand productivity-enhancing features and supporting behaviors. Training highlights the importance of using filters and the priority inbox in Gmail. Also, the staff requires an in-depth understanding of a wide variety of Google Docs functions and levels. This makes it easier to collaborate effectively. The levels of training typically vary between highly and less collaborative users.
Flexibility of Google Apps for Work
The TEI analysis also outlines business benefits drawn from investing in a variety of supplemental capabilities. In turn, this allows an entity to engage in a wide variety of activities, thus providing flexibility. The Google App for Work environment offers the ability to integrate additional applications developed by third parties. These third-party software modules are regarded as flexibility options. They allow organizations to take advantage of wide-ranging operational opportunities. However, the third-party app marketplace options were not part of the TEI evaluation due to varying levels of adoption.
Risks of Cloud to Cloud Migration
Forrester identified two risks linked to integration: impact risk and implementation risk. The analysts defined impact risk as the probability that Google Apps may not meet an organization's operational and technology needs. This reduces overall benefits of integration. Meanwhile, implementation risk refers to the possibility that the investment in the apps may lead to unexpected costs. Such a scenario can be due to a deviation from the original implementation requirements.
Evaluating these risks allows your company to accurately project return on investment. The evaluation process also requires direct adjustment when it comes to financial estimates. This is a practical way to form realistic expectations because risk-adjusted figures paint a true picture of adoption values.
Forrester identified a number of impact risks, which include:
- Professional services – some companies may face higher costs and implementation timeframes depending on the service rendered by third-party vendors as well as the complexity of integration. For this reason, analysts applied a risk adjustment of 10 percent.
- Reduced legacy IT costs – a 10 percent risk adjustment is necessary depending on the size of current storage and email infrastructure.
- Internal training costs – a further 10 percent risk adjustment is applicable owing to the learning curve of your entity's workforce.
- Improved mobility – this aspect results in another 10 percent risk adjustment due to varying travel requirements.
Google Apps for Work makes it easier for companies to remain competitive by boosting productivity and operational efficiency. An economic impact analysis conducted by Forrester Consulting revealed the quantifiable value of switching to Google Apps. The benefits of integrating the cloud-based suite include both cost savings and collaborative efficiency. The tools enable teams to work from anywhere, share ideas and engage customers in real-time. This competitive landscape counteracts the limitations of legacy desktop-centric computing.