The Total Economic Impact™ Of OpenTextmimage.opentext.com/alt_content/binary/pdf/OpenText...by...

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 Process Suite

Table Of Contents

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

Disclosures .................................................................................................. 4

TEI Framework And Methodology ............................................................ 5

Analysis ........................................................................................................ 6

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

OpenText Process 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 to examine the

potential return on investment (ROI) enterprises may realize

by deploying OpenText Process Suite. The purpose of this

study is to provide readers with a framework to evaluate the

potential financial impact of implementing Process Suite on

their organizations, to leverage the technology and related

process improvements to win, serve, and retain customers.

To better understand the benefits, costs, and risks associated

with an OpenText Process Suite implementation, Forrester

interviewed an existing customer with multiple years of

experience using the software platform to provide an increase

in transparency, automation of complex business processes, and a more consistent and efficient way to manage processes

across its various business lines.

Prior to using OpenText Process Suite, the financial services organization was using a third-party vendor that was providing

business process management services for its workflow needs. However, the company, which conducts over 125,000

separate transactions, needed a platform that could manage end-to-end processes across systems and applications with

integration across all their work-flows. The customer also wanted to gain more process alignment across its business and IT

groups and automate key processes to take the strain off internal resources. With OpenText’s Process Suite, the customer

was able to streamline and automate processes across key functions and lines of business, enabling it to meet its objectives,

increase productivity, and keep costs in check. Said the senior IT Procurement Manager, “OpenText Process Suite plays an

important part in helping us evaluate opportunities, and it helps our business become more productive, allowing them to

make faster decisions.”

OPENTEXT PROCESS SUITE REDUCES OPERATIONAL COSTS AND INCREASES INFORMATION MANAGEMENT

AND BUSINESS PRODUCTIVITY

Our interview with an existing customer and subsequent financial analysis found that the organization experienced the risk-

adjusted ROI, benefits, and costs shown in Figure 1.1 (See Appendix A for a description of the interviewed organization.) The

analysis points to three-year benefits of about $4.4 million versus implementation costs of $1.2 million and ongoing costs of

$480,000, adding up to a three-year net present value (NPV) of about $2 million. The three-year net benefits over the three-

year costs results in an ROI of 90% for the financial services organization.

FIGURE 1

Financial Summary Showing Three-Year Risk-Adjusted Results

ROI: 90%

Payback: 12 to 13 months

Three-year benefits: $4.4 million

Three-year NPV: $2.1 million

Source: Forrester Research, Inc.

OpenText Process Suite can help save costs and

improve both business and IT alignment and

productivity.

The costs and benefits for the interviewed global

financial services organization of 10,000

employees, based on our customer interview, are:

Investment costs: $1.2 million.

Annual costs: $480,000.

Total three-year benefits: $4.4 million.

4

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

• An increase in business productivity through faster decision-making by 10% to 15%. The interviewed

organization’s knowledge workers gained productivity after implementing OpenText’s Process Suite by having the

ability to evaluate investment decisions faster. In Year 1, they experienced 10% productivity, which increased to

15% by Year 3.

• A 30% increase in IT productivity. The interviewed organization increased its IT productivity by 30% for the staff

who support workflow management and business process tasks. An example of the increase in productivity is in the

faster execution of changes that can be implemented through Open Text’s virtual configuration functionality.

• Compliance and auditing cost savings of $270,000 per year. The interviewed organization experienced a

reduction in compliance- and auditing-related costs due to better recordkeeping and archiving of workflow tasks after

its implementation of OpenText Process Suite in its environment.

› Costs. The interviewed organization experienced the following risk-adjusted costs:

• Initial implementation costs totaling about $2.4 million over three years. The interviewed organization

experienced $2.4 million in implementation costs. This includes enterprise-wide software license, system integration,

training, and outside professional service costs. In addition, this includes costs over the first three years that the

organization incurred for customizing the platform to its specifications and business needs.

• Annual maintenance fees of $80,000. This is a recurring fee paid to OpenText for continued ongoing maintenance

and support of the business process management (BPM) software tools.

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 Process 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 interview.

5

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 Process Suite solution. The objective of the framework is to identify

the cost, benefit, flexibility, and risk factors that affect the investment decision in order 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 that Process 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 Process 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 Process 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

6

Analysis

INTERVIEWED ORGANIZATION

For this study, Forrester conducted an in-depth interview with

the senior contract manager of IT procurement from a financial

services company, which is an OpenText customer located in

the U.S.

Based on the in-depth interview, Forrester constructed a TEI

framework and an associated ROI analysis that illustrates the

areas financially affected. The OpenText customer that

Forrester interviewed is an organization with the following

characteristics:

› Is a large financial institution that provides loans

to over 180 countries for capital programs.

› Is headquartered in the US with over 10,000

employees across 120 offices worldwide.

› Deploys capital of over $4 billion a year through

approximately 135,000 separate transactions

ranging from $50,000 to $200 million.

› Makes investments in various verticals including

education, health, public administration,

infrastructure, financial and private sector

development, agriculture, and environmental

and natural resource management.

INTERVIEW HIGHLIGHTS

Situation

Forrester interviewed a senior IT procurement manager who is responsible for the procurement side of IT needs for the

organization. The IT procurement team is responsible for initiating, assessing, and making purchase decisions on IT needs

including software, telecommunications, or staff augmentation. The team is responsible for evaluating OpenText Process

Suite and managing the contract with OpenText.

The key decision to evaluate a more robust workflow and business process software tool was made because of the

organization’s need to more efficiently manage an in-house bidding tool it built for evaluating projects and evaluating

additional operational and technical resources and consultants to augment its current staff as projects came in. The

interviewed organization not only deploys capital for various projects but also hires technical and operational consultants to

help manage the projects. To accomplish this, the organization prequalifies resources and projects and then evaluates the

merits based on technical, pricing, and operational parameters. The organization needed an online tool to record all

documents, work with its technical and business counterparts to score projects and resources, and communicate via email to

vendors and resources, as well as provide clearances and approvals in a consistent manner for approximately 125,000

“OpenText Process Suite’s

workflow tool is the foundation

for how we interact between the

businesses and evaluate

opportunities.”

~ Senior IT procurement manager, global financial

services organization

“We customized OpenText’s Process Suite

platform per our needs and policies, and

now we take advantage of the

automation of the tool that makes us all

more efficient.”

~ Senior IT procurement manager, global financial services

organization

7

different projects. The interviewed organization needed a software tool to consistently manage this workflow as well as

customize features based on its operational needs.

Additionally, the interviewed organization, which has over 10,000 full-time employees and outside consultants, needed a

repository to keep all of the transactions and procurement processes in one place.

Solution

The interviewed organization selected OpenText Process Suite BPM solution for its ability to provide a configurable solution

that can be easily customized based on the organization’s requirements and for its breadth of functionalities and features to

manage its end-to-end workflow needs.

Results

The interview revealed that:

› Automating workflow tasks such as documentation, communication, and evaluation of projects and consultants

improves business productivity. The most significant benefit that the organization experienced was the faster decision-

making that OpenText Process Suite offers, as the large financial institution has approximately 135,000 yearly

transactions.

› An increase in IT productivity is realized through the decreasing support cost of managing disparate systems and

automation. The interviewed organization

was able to increase its IT support

productivity by decreasing the percentage of

time supporting business processes and

tasks to ensure each project was

documented and evaluated in a consistent

format.

› Quality of document management and

archiving reduces compliance and

auditing costs for the interviewed

organization. The interviewed organization

described OpenText Process Suite as an

important part of its compliance strategy.

With over 10,000 full-time employees and

135,000 separate transactions, the

organization found it very important that

archiving of documentation is readily

available for its auditing- and compliance-

related efforts.

“For us, we had to have a tool in place that

we could actually [use to] gather

information and then audit the information

that we were gathering. So that’s why we

really needed a workflow tool, and we went

with OpenText Process Suite.”

~ Senior IT procurement manager, global financial services

organization

8

BENEFITS

The interviewed organization experienced a number of quantified benefits in this case study:

› Increase in business productivity through faster decision-making.

› Increase in IT productivity.

› Reduction in the organization’s compliance and auditing costs.

Another important benefit the interviewed organization mentioned was that OpenText Process Suite made its evaluation

process of projects and the deployment of capital more fair through transparency.

Increase in Business Productivity — Faster Decision-Making

The interviewed organization indicated that a key benefit from implementing OpenText Process Suite was the

increase in productivity from the knowledge workers who are responsible for deploying the financial institutions

capital, identifying and assessing suitable projects, and hiring outside consultants for project execution. The

interviewed organization has 500 knowledge workers, and 35% of their time is directly dedicated to decision-

making for deploying capital and making project decisions.

Following the implementation of OpenText Process Suite tools to manage the organization’s workflow needs, the

knowledge workers increased their productivity through increased automation, transparency, and documentation

management across the evaluation process. Productivity was increased 10% in Year 1, 12% in Year 2, and 15%

in Year 3. The organization was able to realize benefits of 40% of this increase in productivity from its knowledge

workers, which results in a risk-adjusted three-year net benefit of $2.9 million (see Table 1).

9

TABLE 1

Increase In Business Productivity (Knowledge Workers) From Faster Decision-Making


Increase In IT Productivity

The interviewed organization indicated that a key benefit from the OpenText Process Suite implementation was a

significant savings in IT support required to manage its workflow and business process management needs.

Prior to its investment in OpenText Process Suite, there was a lot of strain on the internal IT team to support

business processes and tasks related to evaluating projects, communicating with vendors, making investment

decisions, and archiving documents for compliance purposes. As a result, the interviewed organization largely

relied on multiple systems and processes to manage its workflow operations, requiring heavy IT support.

Additionally, before implementing OpenText Process Suite, the interviewed organization had outsourced its

business process management needs to an outside vendor but lacked end-to-end automated processes across

all lines of business globally.

Ref. Calculation Initial Year 1 Year 2 Year 3 Total

Present

Value

A1 500 500 500

A2 2,040 2,040 2,040

A3 35% 35% 35%

A4 75$ 75$ 75$

A5 10% 12% 15%

A6 40% 40% 40%

At A1*A2*A3*A4*A5*A6 $0 $1,071,000 $1,285,200 $1,606,500 $3,962,700 $3,242,772

90%

Atr $0 $963,900 $1,156,680 $1,445,850 $3,566,430 $2,918,495

Metric

Number of knowledge workers

making investment decisions

Increase in productivity —

faster decision-making

Risk adjustment

Increase in productivity —

faster decision-making (risk-

adjusted)

Number of hours per year

Avg. time knowledge worker

spends on evaluating projects

Avg. hourly cost per FTE

Efficiency gained by having

comprehensive evaluation and

process management tool

Actual productivity gained from

increased efficiency

10

The interviewed organization has 400 IT employees and claimed that about 35% of their time was spent

managing workflow and business process tasks. Since the implementation of OpenText Process Suite, the

organization has seen an increase of 30% in productive time due to the automation of its business process

needs across different divisions. The interviewed organization estimated that about 25% of this increased

productive time is translated into efficiency gains for the company. This results in a risk-adjusted three-year NPV

of approximately $900,000 (See Table 2).

TABLE 2

Increase In IT Productivity


Reduction In Auditing Costs

The interviewed organization indicated that it gained significant value from its OpenText Process Suite

implementation through savings in auditing and compliance costs.. One important objective in investing in the

OpenText BPM solution was to have a tool in place that the organization could easily use to gather information

and then audit the information that it had received across business lines and geographies. The interviewed


Present

Value

B1 400 400 400

B2 75$ 75$ 75$

B3 2,040 2,040 2,040

B4 35% 35% 35%

B5 30% 30% 30%

B6 25% 25% 25%

Bt $0 $401,625 $401,625 $401,625 $1,204,875 $998,782

90%

Btr $0 $361,463 $361,463 $361,463 $1,084,388 $898,904

Increase in IT productivity —

OpenText Process Suite

(risk-adjusted)

Average hourly burden rate for

IT employee

Number of working hours per

year

Increase in IT productivity —


Metric

Number of IT employees

Risk adjustment

Percentage increase in

productive time from efficiency

gains

Percentage of time supporting

business processes and tasks

and processes to ensure each

project is in consistent format

11

organization saved 200 hours a year across 10 auditors (internal and external), with an average cost of $150 per

hour. This savings resulted in three-year risk-adjusted direct cost savings of about $670,000.

TABLE 3

Reduction In Auditing Costs


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, the composite organization expects risk-adjusted total benefits to be a PV of more than $4.4 million.

TABLE 4

Total Benefits (Risk-Adjusted)



Present

Value

C1 200 200 200

C2 10 10 10

C3 150$ 150$ 150$

Ct $0 $300,000 $300,000 $300,000 $900,000 $746,056

90%

Ctr $0 $270,000 $270,000 $270,000 $810,000 $671,450

Metric

Average time saved/year

Direct cost avoidance —

auditors

Risk adjustment

Direct cost avoidance —

auditors (risk-adjusted)

Number of auditors

Hourly cost per auditor

Ref. Initial Year 1 Year 2 Year 3 Total

Present

Value

Atr $0 $963,900 $1,156,680 $1,445,850 $3,566,430 $2,918,495

Btr $0 $361,463 $361,463 $361,463 $1,084,388 $898,904

Ctr $0 $270,000 $270,000 $270,000 $810,000 $671,450

$0 $1,595,363 $1,788,143 $2,077,313 $5,460,818 $4,488,849

Benefit Category

Increase in Productivity - Faster Decision Making

Reduction in organizations auditing costs

Total benefits (risk-adjusted)

Increase in IT Productivity - OpenText Process

Suite

12

COSTS

The interviewed organization experienced the following two costs associated with the OpenText Process Suite:

› Implementation and customization costs.

› Annual maintenance costs.

These represent the mix of internal and external costs experienced by the interviewed organization for initial planning,

implementation, and ongoing maintenance associated with the solution.

Implementation And Customization Costs

Implementation costs and further customization costs for OpenText Process Suite were incurred during the

implementation period over three years. Initial implementation costs were $800,000, which included system

integration, training, and outside professional fees. Additionally, the interviewed organization purchased the

enterprise license, for which they paid $375,000 in initial fees. In subsequent years, the organization spent

$400,000 in costs for both internal and external consultants to customize the solution per its policies and

business process management needs. This resulted in about $2.1 million in costs over three years for the

organization (See Table 5).

Implementation 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

Implementation And Customization Costs



Present

Value

E1 $800,000

E2 $375,000

E3 $400,000 $400,000 $400,000

Et $1,175,000 $400,000 $400,000 $400,000 $2,375,000 $2,169,741

100%

Etr $1,175,000 $400,000 $400,000 $400,000 $2,375,000 $2,169,741

Metric

Initial implementation costs

(including training, linking to

other internal systems,

professional service fees)

Total implementation and

customization costs

Risk adjustment

Total implementation and

customization costs (risk-

adjusted)

Enterprise license fees —


Customization of platform by

bank (development, testing,

deployment)

13

Annual Maintenance Costs

Each year, the composite organization incurred maintenance for ongoing access to OpenText Process Suite

software. The maintenance fee included support and software upgrades developed by OpenText that enhance

core functionalities and expand the range of industry-specific features. The interviewed organization incurred

$80,000 of annual maintenance costs, which results in a three-year PV cost of about $200,000 (see Table 6). An

organization’s annual maintenance fees may vary slightly from year to year.

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

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

TABLE 6

Annual Maintenance 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 a little more than $2.3 million.

TABLE 7

Total Costs



Present

Value

D1 $80,000 $80,000 $80,000

Dt A1 $0 $80,000 $80,000 $80,000 $240,000 $198,948

100%

Dtr $0 $80,000 $80,000 $80,000 $240,000 $198,948

Metric

Annual maintenance cost


Risk adjustment


(risk-adjusted)

Ref. Initial Year 1 Year 2 Year 3 Total

Present

Value

Dtr $0 ($80,000) ($80,000) ($80,000) ($240,000) ($198,948)

Etr ($1,175,000) ($400,000) ($400,000) ($400,000) ($2,375,000) ($2,169,741)

($1,175,000) ($480,000) ($480,000) ($480,000) ($2,615,000) ($2,368,689)

Cost Category

Annual Maintenance Cost

Total Costs (Risk-Adjusted)

Implementation & OpenText Process Suite

Customization Costs

14

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

OpenText Process 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 Process Suite software consists of various solutions that offer business process delivery and can integrate across

all OpenText product suites. This allows organizations to more easily scale volumes of data and integrate other business

lines, which in turn accelerates their time-to-value for customers and enhances their ability to integrate and innovate critical

process and capabilities.

Organizations can quickly automate complex processes and address complex case management challenges within a single

platform. The solution includes a full set of tools within the core platform, which makes it more efficient to adapt the software

tools to their business needs. The tools include:

› Business process management. Efficiently and effectively manage end-to-end processes across systems and

applications covering integration-centric and human-centric workflows.

› Dynamic case management. Empower knowledge workers to achieve business outcomes and goals for cases or work

units that combine structured data and unstructured information. Knowledge workers are guided through the process and

have the ability to influence and change the process as per their judgment while keeping full transparency at the same

time.

› Master data management (MDM). Manage your critical business data within a uniform, single-source platform.

› Business rules management. Seamlessly integrate rules within business processes and business objects during

modeling and design time.

› OpenText Process Component Library. This set of prebuilt service delivery components and reports enables

organizations to “assemble” rather than code applications and deploy them much faster than traditional tools.

› Process experience. Support a single and intuitive work experience for users, no matter which process engine may be

driving a process on the back end.

› OpenText AppWorks Gateway. This is a set of RESTful APIs and developer resources across the broader enterprise

information management (EIM) stack to allow developers to easily create solutions that span the breadth of the OpenText

EIM portfolio.

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 the OpenText Process 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 Process Suite, resulting in lower overall total benefits. The

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

15

TABLE 8

Benefit And Cost Risk Adjustments

Benefits Adjustment

Increase in business productivity (knowledge workers)

from faster decision-making 10%

Increase in IT productivity 10%

Reduction in auditing 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 the OpenText Process 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

$2,500,000

$3,000,000

$3,500,000

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 ($1,175,000) ($480,000) ($480,000) ($480,000) ($2,615,000) ($2,368,689)

$0 $1,595,363 $1,788,143 $2,077,313 $5,460,818 $4,488,849

($1,175,000) $1,115,363 $1,308,143 $1,597,313 $2,845,818 $2,120,160

90%

12.5

Summary

Total Benefits

Total

ROI

Payback Period (months)

17

OpenText Process Suite: Overview

By 2020, organizations must have aggressive digital strategies for customer engagement, supply chain, and internal

operations to achieve the agility, efficiency, and productivity to remain competitive. OpenText calls this the “digital

transformation.”

OpenText has the tools and techniques to help their customers take a different look at their enterprises. Instead of

automating these more challenging human-centric processes using the perspectives of boxes, arrows, decisions, and rules,

OpenText allows organizations to represent themselves with digital objects, which represent physical and logical entities both

inside and outside the organization. They better identify and map the information, processes, relationships, context, and

dependencies, and help organizations better manage their assets and entities as they drive their digital transformation.

To assist customers in transforming their organizations, OpenText has created a set of digital solutions to help

organizations more easily transform their high-value and human-centric business functions. These out-of-the-box

applications and frameworks lower the cost, increase the speed of deployment, and capture process best

practices to help organizations maximize the benefits of their digital transformations. These solutions include

Cloud Service Brokerage, ROSMA Procurement Performance Management, Contract Management, Digital Media

Supply Chain, Case Management Framework, Project Management Framework, and Supply Chain Optimization.

The Process Suite is a comprehensive process and case management foundation for an organization’s digital

transformation. This suite includes a platform with a cloud-based process engine and strong integration capabilities, including

a SOA framework, ESB functionality, MDM, and prebuilt connectors. The Process Component Library (PCL), as part of the

Process Suite, provides prebuilt case and project management frameworks and other service components and UIs to help

speed solution development. Also included with the Process Suite is Process Intelligence, providing advanced big data

analytics and visualization.

The OpenText Process Suite, combined with OpenText’s digital solutions, provides the needed capabilities to power digital

transformations. It will simplify an organization’s information management, transform its processes, and accelerate its

business cadence, providing the competitive advantage needed to be a market leader in the digital age of 2020.

18

Appendix A: Interviewed Organization Description

For this TEI study, Forrester interviewed a large financial services organization based in the United States. The financial

analysis and case study to illustrate the quantifiable benefits and costs of implementing OpenText’s Process Suite is based

on an in-depth interview with the organization, which has the following characteristics:

› Is a large financial institution that provides loans to over 180 countries for capital programs.

› Is headquartered in the US, with over 10,000 employees across 120 countries.

› Deploys capital of over $4 billion a year through approximately 135,000 separate transactions ranging from $50,000 to

$200 million.

› Makes investments in various verticals including education, health, public administration, infrastructure, financial and

private sector development, agriculture, and environmental and natural resource management.

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 — auditor $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.

20

Appendix C: Forrester And The Age Of The Customer

Your technology-empowered customers now know more than you do about your 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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