Forrester PP TEI 2024
In 2024 Microsoft commissioned a 2024 Forrester Total Economic Impact™ study to support investment decisions and quantified Power Platform’s impact. The study highlights a 224% ROI, USD82 million in net-present value (NPV), and a payback period of under six months. These benefits stem from reduced development timelines and IT costs, time savings for users, and faster revenue growth from quicker solution deployment. You can find a link to the Microsoft post here: Reduce development times and increase ROI with Microsoft Power Platform - Microsoft Power Platform Blog
The paper is based on 10 real Microsoft customer organisations - these examples have been translated into a model organisation used to base line those savings. In the model organisation in the example are 30k employees and $10 billion of revenue.
I’ve reviewed the paper and it’s really great and helps to demonstrate real value achieved with the Power Platform (prior to AI and Copilot.)
Summary of Total Economic Impact of Power Platform for a composite organisation of 30k employees, $10B revenue, over 3 years
Over the 3 years modeled it demonstrated a Net Present Value of $81.7 Million from tale saved by Power Platform soutions, Operational cost reduction, Revenue growth, and IT Cost savings. In the following pictures I’ve summarised the report. Full details and additional context are available in the report.
Summary of the business challenges and outcomes prior to implementing Power Platform and scenario and outcomes achieved after implementation
Prior to implementation they were seeing business growth and improvement needs but were development capacity constrained and couldn’t deliver on it. They also had limited visibility across their supply chains. This resulted in manual activities, repetitive activities, workarounds, shadow IT, high inventory and over spending. The outcomes of this were increased risk and costs.
In the 3 years after Power Platform was implemented they saw increased availablility of data on which to make decisions and improved supply chain processes that increased productivity and reduced costs. Employees had more time and increased their digital capability and built numerous solutions solving business problems through the organisation. IT development time was reduced which also increased problem solving and solutions which improved efficiency and increased innovation. The resulted in streamlining of employee tasks, addressing needs to improve internally, and meeting customer needs through rapid prototyping and reduced time to market. The outcome of this was increased productivity, lower costs, increased revenue, and greater focus on strategic activities.
If we take these outcomes from these 10 example organisations and the key outcome areas we can flip these as our Strategy items as we spoke about in my earlier post on Vision, Strategy, and OKRs. We can then break these down and define how to target these in our organisation to recreate this success ourselves!
Breakdown of costs and value themes that make up the ROI of 224% and Net Present Value of $81.7 Million and how these align to value categories from my previous blog post
In my previous blog post on Value hypothesis I spoke about how we need to evaluate value from a broader perspective than just that of the individual use case and the process that it enables.
In the TEI paper we can see that the value types of Process Value, IT Value, People Value, and Organisational Value are reflected here with some of the specific value types being mentioned. If we go back and look at that post we can see there are other value examples we also identified that could be considered to form an even wider business case, or might shape the strategy according to what we want to achieve in our organisation.
Summary of 3 year timeframe of TEI model demonstrating an initial 9 month implementation phased
This is a great report (download the whole report from here) and gives a lot of insights into potential value areas for organisations to explore, insights into approaches used to target that value, and phases they should consider and plan for from implementation through to impacting the whole organisation. The numbers are modeled and obviously have a number of assumptions around them but the key messaging stands strong…. Once you’ve identified the value opportunity for your organisation across Process, People, Organisation, and IT value categories then GO FOR IT!
Define business opportunity against your value categories and outcomes. Include all value types, and align them to your organisation level, or business unit level, KPIs - Re-read my Value post to explore these.
Take a strategic approach to implement a secure, safe, scalable foundation to your platform (Go back and re-read my other blog posts to explore how to set your platform strategy! - Start with the scalable governance model v2 post).
Identify and implement the governance structure, team, tooling and processes, you’ll need to realise and track this value
START! GO! GO! GO!
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