Forrester study: ROI of Office 365

As with any critical business decision, organizations considering Office 365 should first ask the question: Is it really worth it?

A recent study conducted by Forrester Consulting answers that question with a resounding YES. The study, which was commissioned by Microsoft and analyzes the total economic impact of Office 365 on midsize businesses, found that Office 365 delivers an ROI of 321 percent with a payback period of two months for the composite midsize organization. Now that’s value!

To complete its analysis, Forrester interviewed seven mid-sized businesses and then created a composite midsize organization based on the experience of these organizations. The composite organization had 150 employees, with some mobile workers, others at corporate headquarters and another group in global branch offices. The June 2011 study found that the three-year risk-adjusted benefits of Office 365 add up to $1.17 million with a payback period of two months. With costs of $277,000, the net present value of Office 365 is $890,000.

The study lists the non-risk adjusted benefits a midsize organization can expect to see, attaching a monetary value to each, where applicable. Here are a few that were on the list:

1. Knowledge worker productivity gain: $657,000 across all employees in the organization
2. Mobile worker incremental productivity gain: $168,750 over three years
3. Eliminated hardware: Savings of $64,000 over three years
4. Eliminated third-party software: Savings of $10,000 over three years
5. Web conferencing savings: Savings of $25,000 over the life of the study
6. Substituted Microsoft licenses: Savings of $125,000 in the initial period of the study
7. Avoided on-premises planning and implementation labor: Savings of $35,000 in internal labor and professional services costs
8. Reduced IT support effort: Savings of $206,350 over three years
9. Reduced travel costs and corresponding CO2 emissions: Savings of $260,625 over the life of the study and a reduction of 47,000 kg of CO2 emissions from air travel

Of all the benefits Office 365 delivers, the primary reason the interviewed companies cited for implementing the service was reducing their total cost of ownership (TCO) for productivity and collaboration tools. Says one study participant: “The cost savings that we see from a cloud-based solution are reason enough to choose Office 365. It saves the company money and allows our IT staff to work on business problems that add more value to the company.”

To learn more, please check out the full Forrester study.