September 2009 Economic Impact Of A BlackBerry Solution In North American Enterprises A Study Of The Adoption And Total Economic Impact (TEI) Of BlackBerry At Enterprise Organizations A commissioned study conducted by Forrester Consulting on behalf of Research In Motion (RIM)
TABLE OF CONTENTS Executive Summary...3 Key Findings...3 Introduction...4 Study Approach And TEI Methodology...8 Study Approach...8 TEI Methodology...9 Study Disclosures...9 Cost and Benefit Definitions...10 Profile Of Enterprises In Each BlackBerry Maturity Deployment Stage...13 Reactive Deployment Stage...13 Proactive Deployment Stage...16 Integrative Deployment Stage...19 Comparison Across Mobile Maturity Stages...22 Study Conclusions...25 Appendix A: Profile Of Quantitative Survey Respondents...27 Appendix B: Total Economic Impact Overview...29 Appendix C: Glossary...32 Appendix D: TEI and ROI Model Details...33 Appendix E: Endnotes...39 2009, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to www.forrester.com. - 2 -
Executive Summary In September 2008 Research In Motion (RIM) commissioned Forrester Consulting to examine the total economic impact and potential return on investment (ROI) enterprises can realize by deploying mobility solutions using BlackBerry smartphones and BlackBerry Enterprise Server software. 1 Forrester defines a BlackBerry enterprise solution as consisting of both BlackBerry smartphones and the BlackBerry Enterprise Server which together deliver a range of benefits to the organization. BlackBerry smartphones are mobile handheld devices that enable companies to deploy a variety of wireless voice and data applications including push e-mail, wireless calendaring, voice, text messaging, multimedia applications, and Web browsing. The BlackBerry Enterprise Server is mobile middleware software that provides a secure wireless gateway for BlackBerry devices and connects to enterprise network software to redirect emails and synchronize information between desktop and mobile software. Enterprises are in various s of deploying BlackBerry enterprise solutions and mobile applications to improve the productivity of mobile employees within their organizations. To quantify the total economic benefits and impact of deploying BlackBerry solutions in enterprise organizations Forrester used a multi-faceted research approach including quantitative surveys and qualitative discussions with mobility decision makers to determine the range of economic costs, benefits and ROI impacts of deploying BlackBerry enterprise solutions. Sources of information used to calculate the TEI ranges included: 1) quantitative interviews with 150 IT and mobile decision makers working in enterprises headquartered in North America with a minimum of 1,000 employees; 2) qualitative interviews with mobility decision maker stakeholders; 3) in depth discussions with enterprises that have deployed BlackBerry smartphones, and 4) Forrester knowledge and expertise related to enterprise mobility trends and initiatives in North America. Key Findings Forrester used results from this study to categorize enterprises into three BlackBerry mobile solution maturity s: reactive deployment, proactive deployment, and integrative deployment. Key factors driving an organization s maturity include the breadth of BlackBerry smartphone deployment across employees in the organization and the range of mobile applications the company is deploying. Reactive organizations deploy BlackBerry smartphones to CXO s, managers, and sales personnel, and implement basic mobile applications such as email, calendar, and personal information management (PIM). Organizations in the proactive deploy BlackBerry smartphones and mobile applications to a broader range of employees including customer service and support and IT personnel in addition to the executives and sales personnel. Companies in the integrative deployment view mobility solutions as key strategic initiatives and have widely deployed BlackBerry smartphones and mobile solutions to a broad array of employees in the enterprise. Forrester also created a calculator tool to help organizations identify which mobile solution maturity they are in and to quantify the key productivity benefits, costs, and ROI analysis associated with deploying BlackBerry solutions. Key results from this study include: Employees in the sales, field service and executive management roles achieve the largest increases in productivity. BlackBerry solution deployment and mobile applications enhance the productivity of a wide range of employees in the organization. Results from this study show that sales force personnel, field service workers, and executive management achieve the greatest productivity increases each week using BlackBerry devices. Productivity benefits range from saving 1 to 2 hours per week for sales, field service, and executive managers in reactive organizations, to improving productivity by 13 to 21 hours per week for sales personnel in integrative deployment enterprises. - 3 -
Enhanced business efficiency benefits account for the majority of BlackBerry solution deployment benefits across all maturity s. We define business efficiency benefits as improved employee productivity and increased employee satisfaction. These productivity benefits vary depending on the type of employee using the BlackBerry device, the range of mobile applications deployed over these devices, and the maturity deployment of the organization Business efficiency benefits account for the vast majority of benefits associated with BlackBerry solution deployment across all s of the maturity model. More specifically, business efficiency benefits account for more than 75% of the benefits achieved in reactive organizations, 68% of proactive benefits, and approximately 60% of business benefits in integrative organizations. Mobile security benefits are a key benefit enterprises achieve from deploying BlackBerry solutions. Mobile security benefits from BlackBerry solution deployment including better corporate regulatory compliance and reduced cost to maintain mobile device security account for 20% to 30% of total benefits. Regulatory compliance benefits are the result of creating audit trails to adhere to government and industry regulations (e.g. SOX, HIPAA, PCI). Reduced security costs are achieved by avoiding BlackBerry smartphone security maintenance costs and reducing security breach issues when devices are lost or stolen.security benefits are also due to the inherent security components of the BlackBerry Enterprise Server. These security benefits become increasingly important as companies evolve to more advanced mobile maturity s because a greater amount of proprietary and sensitive corporate information is deployed over BlackBerry smartphones. Voice and data plan costs account for the majority of total costs across all maturity s. Interviews with existing BlackBerry customers and surveys of North American enterprise organizations show that the monthly price of voice, data, and combined voice and data plans is standard across enterprise organizations. The majority of costs associated with owning BlackBerry smartphones are from cellular voice and/or data plans, which account for up to 75% of the total costs in reactive organizations, and at least 58% of total costs in integrative organizations. The ROI range improves dramatically for each BlackBerry solution maturity.. CXO s in enterprise organizations are putting intense focus on justifying mobile device and solution investments based on the ROI ratios and timelines. Results of the this TEI study show that the three year risk adjusted ROI for each deployment improves significantly at each. The three year risk adjusted ROI for each of the mobile maturity model is: 560% to 827% in the reactive ; 825% to 1,251% in the proactive, and 1,589% to 2,829% in the integrative maturity. These ROI benefits are achieved as enterprises expand their mobile device usage and application deployment across a wider group of enterprises in the organization. Introduction In September 2008 RIM commissioned Forrester Consulting to examine the TEI and potential ROI enterprises can realize by deploying BlackBerry smartphones and BlackBerry enterprise solutions to employees. Forrester defines a BlackBerry enterprise solution as consisting of both BlackBerry smartphones and BlackBerry Enterprise Server software, which together deliver a range of benefits to the organization. BlackBerry smartphones enable companies to deploy a variety of wireless voice and data applications to employees including push e-mail, wireless calendaring, voice, text messaging, Web browsing, field service applications, customer service and support applications, expense management and others. The BlackBerry Enterprise Server is often a key component of these mobility solutions that provides a secure wireless gateway for BlackBerry devices and connecting enterprise network software to redirect emails and synchronize information between - 4 -
desktop and mobile software. Companies are in various s of deploying BlackBerry solutions and mobile applications to improve the productivity of mobile employees within their organizations. To quantify the total economic benefits and impact of deploying BlackBerry devices to employees, Forrester used a multi-faceted research approach including quantitative surveys and qualitative discussions with mobility decision makers to determine the range of economic costs, benefits and ROI impacts of deploying BlackBerry enterprise solutions. Sources of information used to calculate these ranges include: 1) quantitative interviews with 150 IT and mobile decision-makers working in enterprises headquartered in North America with a minimum of 1,000 employees; 2) qualitative interviews with mobility decision-maker stakeholders; 3) in-depth discussions with enterprises that have deployed BlackBerry smartphones; and 4) Forrester knowledge and expertise related to enterprise mobility trends and initiatives in North America.. BlackBerry Maturity Deployment Stages Using the combined study results Forrester Research developed the BlackBerry Maturity Model which categorized enterprises into three BlackBerry solution maturity s: reactive deployment, proactive deployment, and integrative deployment. As a company expands the use of BlackBerry smartphones and solutions across a wider range of employees in the enterprise and broaden the array of mobile applications deployed over these devices, the company s BlackBerry maturity will evolve. The maturity an enterprise is in depends on how evolved the organization s use of BlackBerry smartphones and applications are throughout the organization. A brief description of each of these deployment s is included below. Reactive deployment : Enterprises in the reactive focus their BlackBerry smartphone and solution deployments primarily on CXO executives, sales personnel, and managers who are road warriors. Mobile applications are primarily focused on email, calendar, and PIM. These reactive enterprises are followers when it comes to deploying new mobile technology initiatives. Proactive deployment : Organizations in the proactive deploy BlackBerry smartphones and mobile solutions to a broader range of employees including not only senior executives, managers, and sales personnel, but also to personnel in the customer service business units. These organizations are also likely to use more than one type of mobile operating system platform to address the smartphone device and mobile solution requirements of various types of business users in the company. Integrative deployment : Companies in the integrative deployment are the most progressive in their smartphone and mobile solution initiatives. These organizations view BlackBerry smartphones and mobility solutions as key strategic initiatives. BlackBerry smartphone deployment is wide reaching in these companies with deployment to a wide variety of employees including executive assistants, IT and finance personnel, and customer service agents, in addition to CXO s, managers, and sales force personnel. Additional details showing the profile of the 150 respondents participating in the quantitative survey are included in Appendix A. Many North American Enterprises Use BlackBerry Smartphones Over the past few years, the concept of mobility solutions for enterprises has gained momentum, and many enterprises are revisiting their mobile device and application usage to address the needs of an increasing number of mobile workers who can use these devices and applications to improve worker productivity and efficiencies. - 5 -
Enterprises identify expanding mobility support to employees as a top 10 telecom priority for the year. Nearly 35% of all enterprise respondents identified offering more mobility support such as supporting more mobile devices, deploying additional mobile operating systems, and implementing more mobile applications for employees as a critical or high priority in the coming year. 2 We expect mobile priorities to continue to rise in importance as new types of mobile devices make their way into the corporate environment and force enterprises to develop and formalize their corporate strategy for dealing with mobile devices, applications, and the increasing number of employees who want to receive mobile device and application support from the corporation. More than three quarters of North American enterprises support or manage the BlackBerry operating systems. The smartphone landscape in enterprises is quite fragmented with many different operating system vendors including BlackBerry, Windows Mobile, and Symbian. More recently iphone, Android and Palm Pre have entered the game. Most North American enterprises support more than one mobile operating system (see Figure 1). The BlackBerry operating system is the most commonly used in North American enterprises, with more than 75% of enterprises supporting or managing smartphones using the BlackBerry operating system. The Windows Mobile operating system is also used by many North American enterprises, and approximately 50% of these enterprises support more than one operating system. Enterprises are moving beyond mobile email and calendar application deployment. Forrester s Enterprise And SMB Networks And Telecommunications Survey results show that adoption of wireless email or BlackBerry email is well on its way among North American enterprises (see Figure 2). Mobile email is a widely available application in enterprises, and 78% of North American enterprises have already implemented or are expanding their implementation of wireless email or BlackBerry email applications. Email applications tend to be deployed to senior-level executives, managers, and sales personnel who are road warriors or are away from their desks often. We expect the next wave of mobile application adoption to be driven by addressing the needs of mobile line-of-business workers. Examples of line-of-business employees include field service professionals, truck and bus drivers, and emergency or critical support workers in the government setting. - 6 -
Figure 1: BlackBerry Devices Have A Strong Presence In North American Enterprises - 7 -
Figure 2: Enterprises Are Broadening Mobile Application Deployment Beyond Email And Calendaring What are your firm's plans to implement or expand its use of the following mobile applications? (implementing or expanding use) Wireless email or BlackBerry 82% Personalized contacts and calendar 62% Emergency/critical response applications Inventory management Sales force applications Field service applications Customer-facing applications (e.g., application customers can use) Logistics applications Enterprise asset management Location-based applications (e.g., asset tracking, GIS, AVL) Mobile printing 25% 25% 24% 21% 20% 18% 17% 15% 10% Base: 302 IT decision-makers with mobile decision authority at North American enterprises with 1,000+ employees (multiple responses accepted) Source: Enterprise And SMB Networks And Telecommunications Survey, North America And Europe, Q1 2009 Study Approach And TEI Methodology Study Approach The approach to this study included primary qualitative and quantitative research as well as knowledge and expertise from Forrester reports related to enterprise mobility trends and adoption factors. The five sources of insight Forrester used for this study were: 1. Data from existing Forrester reports and studies related to overall enterprise mobility trends and BlackBerry adoption among North American enterprises. 2. Interviews with RIM marketing executives and sales personnel to fully understand the potential value proposition associated with deploying RIM/BlackBerry solutions. 3. In-depth interviews with eight North American enterprise organizations that have deployed and are currently using BlackBerry devices. 4. Online survey of 150 mobility decision makers in enterprises with 1,000 or more employees headquartered in North America. The survey focused on the current and future lifecycle costs and benefits of BlackBerry device deployment to enterprise employees. 5. Based on results from the in-depth interviews, online survey results, and discussions with RIM executives, Forrester constructed a financial model and an interactive calculator to help enterprise organizations determine the ROI and total financial value of deploying - 8 -
BlackBerry devices to employees. This financial model identified a range of economic costs, benefits, and ROI analysis of deploying BlackBerry enterprise solutions based on input from quantitative surveys and qualitative discussions with mobility decision makers. TEI Methodology RIM selected Forrester for this project because of its industry expertise in mobility and Forrester s TEI methodology. TEI not only measures costs and cost reduction (areas that are typically accounted for within IT) but also weighs the enabling value of a technology in increasing the effectiveness of overall business processes. TEI is a methodology developed by Forrester Research that enhances a company s technology decision-making process and helps vendors communicate 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. Using information from the in-depth interviews with enterprise organizations in North America and results from the quantitative survey of 150 enterprise mobility decision makers in North America, Forrester constructed a TEI framework to be used by enterprises with 1,000 plus employees that are considering BlackBerry solution deployment. The objective of the TEI framework is to identify the cost, benefit, flexibility, and risk factors that impact the investment decision. This framework was used to model an interactive ROI calculator that can assist RIM s prospects and current customers with evaluating the financial impact of deploying the BlackBerry solution in the organization. The results of this framework and analysis are detailed in this study. Forrester employed four fundamental elements of the TEI methodology to model the BlackBerry solution impacts: 1. Costs: Forrester included all direct and indirect costs to acquire, support and maintain BlackBerry smartphones and BlackBerry Enterprise Server solutions. 2. Benefits: Forrester quantified typical hard and soft benefits of deploying BlackBerry smartphones and solutions among business users and IT executives. 3. Risk: Forrester s analysis captures the uncertainty in the cost and benefits estimates to reflect challenges associated with large scale IT investments (e.g. BlackBerry solution deployment). 4. Flexibility: Forrester also evaluated potential financial investments in the form of expanded deployment to gain business agility and other benefits at some additional cost. Please see Appendix C for additional information on the TEI methodology. Study Disclosures The reader should be aware of the following: The study is commissioned by RIM and delivered by the Forrester Consulting group. RIM reviewed the study results and provided feedback to Forrester. However, Forrester maintains editorial control over the study and its findings, and does not accept changes that contradict Forrester s analysis of the study results. - 9 -
The names and contact information for the eight in depth customer interviews were provided by RIM. Forrester makes no assumptions regarding the potential ROI that other organizations will receive. Forrester strongly advises readers to use their own estimates within the framework described in this report to determine the appropriateness of investing in RIM or BlackBerry devices. This study is not meant to be used for competitive product analysis. Cost and Benefit Definitions Costs A key component of the TEI methodology is identifying the costs and benefits associated with deploying BlackBerry devices across the organization. A detailed description of each of the costs and benefits captured in the TEI analysis and calculator tool is included below (see Figure 3). Figure 3: Costs Of BlackBerry Solution Deployment Captured In The TEI Analysis Cost category BlackBerry Enterprise Server Reactive deployment Proactive deployment Integrative deployment $48 $100 $45 BlackBerry smartphones $639 $739 $741 User support $66-$73 $71-$75 $171-$206 End user training $52-$77 $231-$254 $240-$289 Voice and data plans $2,363 $2,459 $2,079 Mobility applications $0 $72 $193.Total three-year cost per BlackBerry $3,168-$3,200 $3,672-$3,699 $3,470-$3,552 smartphone Average annual cost Per BlackBerry smartphone $1,056-$1,067 $1,224-$1,233 $1,156-$1,184 Cost drivers Variances are driven by the number of BlackBerry Enterprise Servers, whether the organization has separate testing, production, or back-up servers, the cost of each server, and the maintenance fees. Costs vary due to the number of BlackBerry smartphones supported and corporate liable device policy. User support costs increase along with the number of mobile applications deployed. Costs driven by the number of users and the number of mobile applications available to users. Voice and data plans are the key driver of costs across all deployment s. Costs driven by the number of mobile applications beyond email Deployment strategies drive total BlackBerry Enterprise Server costs. BlackBerry Enterprise Server costs include the license fees, hardware and software costs for the solution, the professional service fees, and labor costs related to BlackBerry Enterprise Server implementation and ongoing maintenance. Companies use various BlackBerry Enterprise Server deployment strategies which impact these costs. Some firms purchase a back-up server for each BlackBerry Enterprise Server in the production environment, while other companies purchase separate testing and trial servers. Another option is to use a managed BlackBerry Enterprise Server solution. Voice and data plan expenses account for the vast majority of deployment costs. Between 59% and 75% of costs are due to voice and data expenses. These expenses include the monthly costs for cellular voice and cellular data plans for each BlackBerry smartphone. These costs are also driven by the corporate liability policies for smartphones. - 10 -
Some companies pay for a certain percentage of these voice and data costs while others allow employees to expense back these charges to the organization. BlackBerry smartphone devices account for approximately 20% of total BlackBerry solution deployment costs. Total BlackBerry solution deployment costs include the BlackBerry Enterprise server cost, the cost to purchase each device, the cost of internal labor or professional services to customize, configure, test, deploy, and train users, and the cost of mobile applications. A key variable driving BlackBerry smartphone costs is the percent of these costs paid by the enterprise. Some enterprises pay for all of these device costs for employees while others are willing to subsidize a portion of these device costs. These smartphone expenses also include the cost of customizing, testing, configuring, and deploying each of these smartphones. Benefits A wide range of benefits are achieved by deploying BlackBerry smartphones to employees throughout the organization. These benefits are categorized into enhanced business efficiency, security benefits, cost avoidance benefits, and workflow benefits. Definitions of specific benefits achieved through BlackBerry smartphone and solution deployment, as well as key drivers impacting these benefits are identified below (see Figure 4). Enhanced business efficiencies are the primary benefits achieved through BlackBerry deployment. BlackBerry devices enable workers to be more efficient and productive in their daily work activities. These productivity benefits vary depending on the type of employee using the BlackBerry device, the range of mobile applications deployed over these devices, and the maturity deployment of the organization (see Figure 5). For example sales professionals can improve weekly productivity by 1 to 2 hours per week in a reactive deployment organization, 4 to 7 per week hours in a proactive organization, and 13 to 21 hours per week in an integrative organization. Significant productivity benefit ranges are also achieved by field service and executive management personnel. Addressing security benefits are important drivers of BlackBerry deployment. Many companies identify security benefits as key reasons for deploying BlackBerry devices. There are two types of security benefits: regulatory compliance benefits and reduced mobile security costs. Regulatory compliance improvements are calculated based on reducing time spent by employees on ensuring regulatory compliance through audit trails and adhering to SOX, PCI, and HIPAA regulations. Reduced mobile security costs are achieved by reducing time spent maintaining mobile device security due to using BlackBerry devices as opposed to other types of mobile operating systems. Companies can achieve additional workflow benefits as a result of BlackBerry device deployment. As companies evolve their BlackBerry deployment initiatives across a range of employees in the organization and move to a more integrative deployment, additional efficiency benefits can be achieved in certain workflow processes (see Figure 6). For example IT personnel can improve performance by using BlackBerry devices to resolve help desk requests more quickly and to increase the number of help desk questions each staff member can address. In addition back office benefits are achieved when employees use BlackBerry devices to improve the efficiency and timeliness of booking, maintaining, and collecting payments on monthly account receivables. - 11 -
Figure 4: Business Efficiency, Security, and Cost Avoidance Benefit Definitions Enhanced business efficiency Security benefits Costavoidance benefits Benefits Definition Key drivers Increased employee productivity Increased employee satisfaction leading to reduced employee turnover Improved regulatory compliance Reduced mobile security costs Savings on hardware and software fees by using a single device vendor Cost avoidance of Wi-Fi or hotspot connectivity Reduced staff overtime charges These benefits are determined by the number of hours of improved productivity each functional employee in the organization achieves by using BlackBerry smartphones. The benefit calculations are also based on the FTE hours for employees in each employee functional area that achieved these productivity gains. These satisfaction benefits are calculated based on reductions in the annual employee attrition rates. These attrition benefits are due to the flexibility that is provided to employees who have the ability to work remotely and to access mobile applications through BlackBerry smartphones. Regulatory compliance benefits are calculated by the reduction in time spent by employees in ensuring regulatory compliance by creating audit trails and adhering to SOX, PCI, and HIPAA regulations. Reduced mobile security costs are based on the reduction in time spent on maintaining the security of mobile devices in an organization due to using BlackBerry smartphones as opposed to other types of smartphoneoperating systems. Some enterprises may standardize on one mobile operating system and will only support employees who use those smartphone devices. Cost benefits are achieved because the organization does not need to replicate costs of managing multiple mobile operating systems or to use mobile device management vendors to support a heterogeneous environment. Benefits are calculated by determining the reduction in costs associated with connecting to the Internet via a laptop or minimizing Wi-Fi connection costs at hotels or airports. Some benefits can be achieved by avoiding overtime charges that are not necessary due to employees being able to be more efficient during normal work hours. Business efficiencies increase as more mobile devices and mobile applications are deployed to address the needs of various types of workers in the organization. As the number of employees who use BlackBerry smartphones increases, the attrition rate should decline because employees have the flexibility to stay in contact with the office while they are away from their desk. Regulatory compliance benefits will vary depending on specific vertical industry requirements (e.g., SOX requirements in financial services and HIPAA regulations in healthcare). Mobilesecurity benefits are based on the number of confidential corporate and customer records at risk and the probability of a catastrophic event occurring that jeopardizes the confidentiality of those records. Efficiencies are achieved because these companies do not need to duplicate investments in hardware and software to support a multi-operating-system environment As more employees use their BlackBerry smartphones to communicate while they are at the hotel, in airports, or at hot-spot locations, the Internet connectivity costs and Wi- Fi fees will decline. Improvements in employee productivity by using BlackBerry smartphones during normal office hours will help enterprises avoid paying overtime fees to workers. Figure 5: Productivity Hours Achieved Per Week By Employees Using BlackBerry Devices Functional area Reactive deployment Proactive deployment Integrative deployment Sales 1-2 4-7 13-21 IT 1 1-2 2.5-3.5 Admin/finance/HR 0.5 0.5 0.5 Field service 1-2 4-6 5-10 Customer service 1 1 2-3 Supply chain 1 1 1 Executive management 1-2 4-5 4-8 Physical plant/security team 1 1 1-12 -
Figure 6: Additional Workflow Benefits Can Be Achieved Through BlackBerry Deployment Benefits Definition Key drivers Shorten sales cycle Shortened sales cycle benefits include the time saved through more effective internal communication and reducing delays in the proposal development process. These benefits include the time spent accessing product experts, pricing information, and legal review. IT personnel can improve their performance using BlackBerry smartphones to resolve help desk requests quicker and increase the efficiency of resolving issues and the number of help desk questions the IT staff can address. With improved communication, the ability to contact others on the road, and reservationless conferencing capabilities, the time to develop sales proposals may be reduced. Improved IT performance The type of mobile applications developed for and used by the IT organization, beyond email, drive these benefits. Accelerate back-office support Back-office benefits are achieved when employees use BlackBerry smartphones to improve the efficiency and timeliness associated with booking, maintaining, and collecting payments on monthly account receivables. Support staff with BlackBerry smartphones reduce the time required for workflow authorization, which leads to faster billing cycles and quicker expense authorization. Improve field service Management Field service employees can decrease the number of hours associated with scheduling and dispatch as a result of improved availability and status trackingthrough BlackBerry device usage. Employees optimize communication processes that improve the scheduling and dispatching of service staff, minimizing cost and maintaining good customer service. Workflow benefits Improved resolution of customer issues Reduction in number of Level 1 and Level 2 customer service and support calls as a result of resolving customer issues more quickly and efficiently Enhanced communication between customer service personnel and subject matter experts via BlackBerry smartphones enables customer issues to be resolved more quickly, and increases the number of issues resolved. Increase customer experience and retention BlackBerry smartphones can help improve customer experience by decreasing the response time of resolving customer concerns and decreasing the corporate losses attributable to poor customer service. BlackBerry smartphones can help shorten the project completion time because BlackBerry smartphones improve communication among employees in various groups in the organization. Improved communication between customer service and subject matter experts, through presence awareness, call forwarding, and other tools, enables customer issues to be resolved quickly and improves customer retention. Shorten time-to-market Improved communication among project teams reduces project completion time, which can decrease time-tomarket for new products. Improve ability to address and resolve corporate issues Benefits are calculated based on the number of hours saved by using BlackBerry smartphones to reach senior executives and resolve questions affecting revenue generation. Improved communication by your organization's executive team improves the ability to address and resolve pressing corporate issues and reduces the need for executives to travel to external sites and branch offices. Hasten response to physical security and plant incidents Plant security benefits are achieved by using BlackBerry smartphones to quickly identify plant security issues and reach a member of the security team to address physical security and plant incidents. BlackBerry smartphones deployed to the physical plant/security team enable a company to shorten the time to address a plant security incident. Profile Of Enterprises In Each BlackBerry Maturity Deployment Stage Using study results Forrester constructed a TEI framework and calculator to help enterprises identify the costs, benefits, and ROI to deploying BlackBerry solutions and to determine which phase of the BlackBerry Maturity Scale they are in. Based on the breadth of BlackBerry smartphone and solution deployment, as well as on the types of mobile applications used by employees over these devices, Forrester identified a three BlackBerry Maturity Scale. These three deployment s are: reactive, proactive, and integrative. For each maturity, a range of costs, benefits and ROI analysis results was identified based on input from quantitative surveys and qualitative discussions with mobility decision makers. A profile of the BlackBerry solution deployment and application initiatives of companies in each of these s is included below. Reactive Deployment Stage Enterprises in the reactive deployment of maturity are in the early s of BlackBerry smartphone deployment. These organizations generally take a cautious, conservative view when implementing new types of technology (such as mobility solutions and applications) and may wait until their competitors have deployed a new technology before implementing it in their organization. The three-year ROI per BlackBerry smartphone in reactive- organizations is 560% to 827% (see Figure 7). Reactive organizations deploy BlackBerry smartphones primarily to CXO-level executives, managers, and sales personnel who are often away from their desks or are road warriors. The mobile applications used by workers in reactive - 13 -
organizations are primarily email, calendar, and PIM functionality. Future mobile device deployment initiatives will be conservative and driven by competitor activities as these companies are considered to be followers when it comes to implementing new mobile technology initiatives. Figure 7: ROI Analysis For A Reactive-Deployment-Stage Enterprise Three-Year Risk-Adjusted ROI 827% Three-Year Risk-Adjusted ROI 560% Voice and data plan expenses account for a majority of reactive deployment costs. The three-year cost per device of reactive deployment companies is primarily driven by voice and data plan expenses, which account for nearly 75% of total costs (see Figure 8). The cost of BlackBerry smartphones account for about 20% of total costs. There are no additional mobility application expenses included in reactive organization costs because these companies do not deploy mobility applications beyond basic email and calendaring. User support and end user training costs are also minimal, each accounting for about 2% of overall costs because training expenses and end user support requirements are minimal for these basic, easy-to-use mobile applications. - 14 -
Figure 8: Detailed Cost Breakdown For Reactive Stage Deployment $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Cost Category $2,363 $2,363 $639 $639 $52 $48 0% $66 0% Low Range High Range Three-Year Cost Per BlackBerry Smartphone $77 $48 $73 Voice and Data Plans BlackBerry Smartphones End User Training BlackBerry Enterprise Server User Support Mobility Applications Percent of Total BlackBerry Smartphone Cost BlackBerry Enterprise Server $48 1.5% BlackBerry Smartphones $639 20.2% - 19.9% User Support $66 - $73 2.1% - 2.3% End User Training $52 - $77 1.6% - 2.4% Voice and Data Plans $2,363 74.6% - 73.8% Mobility Applications $0 0% Total 3-Year Cost Per BlackBerry Smartphone $3,168 - $3,200 - Average Annual Cost Per BlackBerry Smartphone $1,056 - $1,067 - Business efficiency benefits account for approximately 80% of total benefits. Total three-year business efficiency benefits per each BlackBerry device in reactive organizations are $16,736 to $22,638 (see Figure 9). Employees achieving these business efficiency benefits are primarily sales executives, field service, and executive management professionals who are on the road or away from their desks most of the time. Employees in each of these functional areas achieve productivity enhancements of 1 to 2 hours per week by using BlackBerry devices. - 15 -
Figure 9: Benefit Breakdown For Reactive Stage Deployments Proactive Deployment Stage Enterprises in the proactive deployment are deploying BlackBerry devices to a broader range of employees in their organization. Employees using BlackBerry devices and mobile applications in these companies include not only CXOs, managers, and sales professionals but also individuals in the IT and customer service organizations. The three-year ROI per BlackBerry smartphone for proactive- organizations is 825% to 1251% (see Figure 10). Proactive organizations enable a wider range of employees to use BlackBerry smartphones. These employees include not only managers, CXOs, and sales professionals but also business unit personnel in the IT and customer service and support organizations. These companies deploy two to three mobile applications beyond email to address the functional requirements of these mobile business users. - 16 -
Figure 10: ROI Analysis For A Proactive-Deployment-Stage Enterprise Three-Year Risk-Adjusted ROI 1,251% Three-Year Risk-Adjusted ROI 825% Voice and data plan expenses account for about 67% of proactive deployment costs. Voice and data plan expenses are two-thirds of the total costs associated with BlackBerry smartphone deployment in proactive organizations (see Figure 11). The cost for BlackBerry smartphones is 20% of these total costs. These organizations deploy up to two additional mobile applications beyond email to address the mobility needs of business users. Mobile application development expenses are about 2% of total expenses for smartphones. End user training expenses increase to about 6% of total costs because proactive organizations need to invest more in training business units on how to use these new mobility applications. - 17 -
Figure 11: Detailed Cost Breakdown For Proactive Stage Deployment Cost Category Three-Year Cost Per BlackBerry Smartphone Percent of Total BlackBerry Smartphone Cost BlackBerry Enterprise Server $100 2.7% BlackBerry Smartphones $739 20.1% - 19.9% User Support $71 - $75 1.9% - 2.0% End User Training $231 - $254 6.3% - 6.9% Voice and Data Plans $2,459 67.0% - 66.5% Mobility Applications $72 1.9% Total 3-Year Cost Per BlackBerry Smartphone $3,672 -$3,699 - Average Annual Cost Per BlackBerry Smartphone $1,224 - $1,233 - Business efficiency accounts for approximately 70% of total benefits in proactive enterprises. The three-year business efficiency benefits for each BlackBerry smartphone in proactive organizations are between $23,798 and $33,877 (see Figure 12). Executive management, sales professionals, and field service professionals achieve a minimum of 4 hours of productivity benefits per week from using BlackBerry smartphones, with the upper range of productivity benefits from 5 to 7 hours per week. Security benefits from improved regulatory compliance and reduced mobile security costs are nearly 28% of proactive organization benefits. These significant security benefits are due to mobile applications using proprietary corporate data and customer profile information to support the needs of business users. - 18 -
Figure 12: Benefit Breakdown For Proactive Stage Enterprises Benefit category Three-Year Benefit Per BlackBerry Smartphone Percent of Total BlackBerry Smartphone Benefit Enhanced Business Efficiency $23,798 - $33,877 69.6% - 68.3% Improved Regulatory Compliance $6,465 - $10,775 18.9% - 21.7% Reduced Mobile Security Costs $3,157 - $3,946 9.2% - 7.9% Workflow Benefits $507 - $724 1.5% Cost Avoidance Benefits $276 0.8% - 0.6% Total 3-Year Benefit Per BlackBerry Smartphone $34, 203 - $49,598 - Average Annual Benefit Per BlackBerry Smartphone $11,401 - $16,533 - Integrative Deployment Stage Companies in the integrative deployment are at the forefront of smartphone and application deployment. These organizations view BlackBerry smartphones and enterprise mobility solutions as key strategic initiatives in their organization. They are proactively developing an overarching, corporate mobility strategy that uses one or two mobile platforms to support their mobile application requirements. The three-year ROI for each BlackBerry smartphone in integrative organizations is 1589% to 2829% (see Figure 13). Integrative organizations view smartphones and mobile applications as important strategic initiatives. The mobile applications implemented by these organizations go well beyond email and PIM to include applications that address many different organizational business units. These companies often deploy mobile solutions over more than one mobile operating system platform to support mobility solution requirements of employees in many business units. BlackBerry smartphones are deployed broadly to many groups of employees, including executive assistants, IT and finance personnel, and customer service agents, in addition to CXOs, managers, and sales force personnel. - 19 -
Figure 13: ROI Analysis For Integrative-Deployment Stage Enterprises Three-Year Risk-Adjusted ROI 2829% Three-Year Risk-Adjusted ROI 1589% Voice and data plans account for about 59% of integrative- deployment costs. In integrative- organizations, voice and data plan expenses still account for the greatest percent of total costs (see Figure 14). These organizations deploy four or more additional mobile applications beyond email to address the needs of a variety of business users in the organization. Due to the deployment of a wide range of mobile applications, the end user support requirements increase to approximately 5% of total costs per smartphone. End user training expenses increase to about 8% of total costs because integrative organizations need to train BlackBerry smartphone users on how to use these various types of new mobility applications. BlackBerry smartphone device costs are about 20% of total costs. - 20 -
Figure 14: Detailed Cost Breakdown For Integrative Stage Deployment Cost Category Three-Year Cost Per BlackBerry Smartphone Percent of Total BlackBerry Smartphone Cost BlackBerry Enterprise Server $45 1.3% BlackBerry Smartphones $741 21.4% - 20.9% User Support $171 - $206 4.9% - 5.8% End User Training $240 - $289 6.9% - 8.1% Voice and Data Plans $2,079 59.9% - 58.5% Mobility Applications $193 5.6% - 5.4% Total 3-Year Cost Per BlackBerry Smartphone $3.470 -$3,552 - Average Annual Cost Per BlackBerry Smartphone $1,156 -$1,184 - Business efficiency accounts for 59% to 64% of total benefits in integrative firms. The three-year business efficiency benefits for each BlackBerry smartphone in integrative organizations are between $35,506 and $64,780 (see Figure 15). A wide range of employees from many different business units use BlackBerry smartphones and mobile applications to improve their productivity. These benefits increase dramatically as enterprises expand the number of mobile applications deployed over BlackBerry smartphones to address the needs of these business users. For example, sales professionals can improve their productivity by between 13 and 21 hours per week, field service professionals can improve their productivity by 5 to 10 hours per week, and executive management professionals can improve productivity by between 4 and 8 hours per week. Additional productivity benefits are gained by IT, customer service, and supply chain personnel. Security benefits also increase to nearly 30% of integrative organization benefits. - 21 -
Figure 15: Benefit Breakdown For Integrative Stage Enterprises Benefit category Three-Year Benefit Per BlackBerry Smartphone Percent of Total BlackBerry Smartphone Benefit Enhanced Business Efficiency $35,506 - $64,780 59.2% - 63.8% Improved Regulatory Compliance $13,505 - $19,293 22.5% - 19.0% Reduced Mobile Security Costs $5,112 - $7,303 8.5% - 7.2% Workflow Benefits $5,310 - $9,697 8.9% - 9.5% Cost Avoidance Benefits $541 0.9% - 0.5% Total 3-Year Benefit Per BlackBerry Smartphone $59,974 - $101,614 - Average Annual Benefit Per BlackBerry Smartphone $19,991 - $33,871 - Comparison Across Mobile Maturity Stages A comparison of the study results and profiles for each of the BlackBerry Maturity Model highlights key differences in the ROI, costs, and benefits for each deployment (see Figure 16). Figure 16: ROI Analysis Comparison Across BlackBerry Maturity Stages BlackBerry deployment maturity Reactive deployment Proactive deployment Integrative deployment Percent of employees with smartphones 19% 47% 89% Percent of smartphone users with BlackBerry smartphones Number of functional areas with applications beyond email Calculated mobility maturity score (0 to 100%) 48% 57% 73% 0 to 1 2 to 3 4-plus 30% 58% 73% Three-year risk-adjusted ROI 560% to 827% 825% to 1589% to - 22 -
1251% 2829% Three-year net present value (NPV) costs per BlackBerry smartphone $3,168 to $3,200 $3,671 to $3,698 $3.470 to $3,552 Three-year NPV benefits per BlackBerry smartphone $20,919 to $29,371 $34,203 to $49,598 $59,974 to $101,614 The three-year risk-adjusted ROI range improves for each deployment ranging from a low of 560% in the reactive deployment to a high of 2829% in integrative- organizations. The variation in ROI is driven mainly by penetration of BlackBerry smartphones throughout the workforce and the maturity and sophistication of the business mobility applications running on these smartphones. The three-year total cost of ownership (TCO) of BlackBerry smartphones increases as enterprises move up the BlackBerry Maturity Model deployment s (see Figure 17). The three-year total cost per BlackBerry smartphone ranges from $3,168 in the reactive deployment to $3,552 in the integrative deployment. Voice and data plan costs are the dominant drivers of costs across all s of deployment. The cost of BlackBerry Enterprise Servers varies in each depending on organizational policies. For example, some organizations require the purchase of a backup server for each production server while other enterprises have separate testing servers. Figure 17: Costs Category Comparisons Across BlackBerry Maturity Stages Cost category BlackBerry Enterprise Server Reactive deployment Proactive deployment Integrative deployment $48 $100 $45 BlackBerry smartphones $639 $739 $741 User support $66-$73 $71-$75 $171-$206 End user training $52-$77 $231-$254 $240-$289 Voice and data plans $2,363 $2,459 $2,079 Mobility applications $0 $72 $193.Total three-year cost per BlackBerry $3,168-$3,200 $3,672-$3,699 $3,470-$3,552 smartphone Average annual cost Per BlackBerry smartphone $1,056-$1,067 $1,224-$1,233 $1,156-$1,184 Cost drivers Variances are driven by the number of BlackBerry Enterprise Servers, whether the organization has separate testing, production, or back-up servers, the cost of each server, and the maintenance fees. Costs vary due to the number of BlackBerry smartphones supported and corporate liable device policy. User support costs increase along with the number of mobile applications deployed. Costs driven by the number of users and the number of mobile applications available to users. Voice and data plans are the key driver of costs across all deployment s. Costs driven by the number of mobile applications beyond email However, the benefits achieved by deploying BlackBerry smartphones and associated mobile applications to support the needs of business users far outweigh the costs. The three-year benefits per device range from $20,919 in the reactive integration to $101,614 in the integrative deployment (see Figure 18). - 23 -
Figure 18: Benefit Category Comparisons Across BlackBerry Maturity Deployment Stages Benefit category Reactive deployment Proactive deployment Integrative deployment Enhanced business efficiency $16,736-$22,638 $23,798-$33,877 $35,506-$64,780 Improved regulatory compliance $2,336-$4,672 $6,465-$10,775 $13,505-$19,293 Reduced mobile security costs $1,675-$1,861 $3,157-$3,946 $5,112-$7,303 Workflow benefits $76-$103 $507-$724 $5,310-$9,697 Cost-avoidance benefits $95 $276 $541 Total three-year benefit per BlackBerry smartphone $20,919-$29,371 $34, 203-$49,598 $59,974-$101,614 Average annual benefit per BlackBerry smartphone $6,973-$9,790 $11,401-$16,533 $19,991-$33,871 Benefit drivers Business efficiencies increase as more mobile applications are deployed across the organization. Regulatory compliance benefits may vary depending on vertical industry requirements. Security benefits are based on number of records at risk and the probability of a catastrophic event. Workflow benefits increase as BlackBerry mobile applications are distributed in more business units. Cost-avoidance benefits are primarily driven by decreased Internet connectivity and Wi-Fi fees. Business productivity and mobile security benefits account for the majority of benefits in all deployment s. Business productivity benefits range from 59% in integrative organizations to 80% in reactive organizations. These business efficiency benefits vary depending on the number of hours of improved productivity each employee functional area achieves by using BlackBerry smartphone as well as the number of employees in each functional area who have BlackBerry smartphones. Benefits achieved from security cost reductions and regulatory compliance improvements account for between 20% and 31% of the total benefits (see Figure 19). - 24 -
Figure 19: Detailed Benefits Achieved By BlackBerry Deployment Enhanced business efficiency Benefit category Reactive deployment Proactive deployment Integrative deployment Increased productivity $16,698-$22,591 $23,748-$33,823 $35,438-$64,712 Increased employee satisfaction $38-$47 $50-$55 $68 Improved regulatory compliance $2,336-$4,672 $6,465-$10,776 $13,505-$19,293 Reduced mobile security costs $1,675-$1,861 $3,157-$3,946 $5,112-$7,303 Shortened sales cycle $48-$65 $362-$515 $5,071-$9,261 Improved IT performance $0 $0-$1 $1 Accelerated back-office support $0 $7-$11 $2-$4 Improved field service management $27-$37 $41-$59 $108-$197 Workflow benefits Improved resolution of customer issues $0 $61-$88 $20-$36 Increased customer experience $0 $24-$34 $60- $110 Shorten time-to-market $0 $10-$14 $42-$77 Improved ability to resolve issues $0 $1 $0-$1 Faster security response $0 $2-$3 $6-$10 Cost-avoidance benefits Multivendor cost avoidance $0 $0 $0 Internet connectivity cost avoidance $95 $117 $224 Reduced staff overtime charges $0 $159 $317 Total three-year benefit per BlackBerry smartphone $20,919-$29,371 $34,203-$49,598 $59,974-$101,614 Additional workflow benefits can be achieved as business users implement BlackBerry smartphones and mobile applications to help them complete their work tasks quicker and more efficiently. In the reactive deployment workflow benefits are minimal because BlackBerry smartphones are not widely deployed to employees. However, as enterprises move up the mobile maturity, workflow benefits are achieved by a variety of different types of business users. For example IT and customer service personnel can complete some of their help desk calls more quickly and efficiently by using their BlackBerry smartphones, or sales executives may be able to close a deal faster. The workflow benefit of each of these transactions by leveraging BlackBerry solutions varies significantly. For example, the monetary benefit of completing an IT call through leveraging BlackBerry solutions is significantly less than the revenues generated from using BlackBerry smartphones and mobile applications to shorten the sales cycle timeline and close a new sales deal. Study Conclusions Forrester s in-depth interviews with current BlackBerry customers and the extensive survey of 150 enterprise mobility decision-makers in North American headquartered organizations yielded several key study findings: Enterprise organizations can realize significant benefits in the form of enhanced business efficiency, improved regulatory compliance, and reduced mobile security costs by deploying - 25 -
BlackBerry smartphones and the BlackBerry Enterprise Server to employees. These companies can also realize various additional workflow benefits, depending on which functional areas within an organization are equipped with BlackBerry smartphones and on the number of, and sophistication of, mobility applications available over these smartphone devices. The three s of BlackBerry device maturity deployment are: reactive, proactive, and integrative. The financial analysis included in this study provides organizations with a model and calculator tool that can be used to evaluate the value achieved from deploying BlackBerry smartphones. Based on results from this study, Forrester calculated a three-year riskadjusted ROI for each of the BlackBerry deployment model. The ROI achieved through BlackBerry deployment ranges between 560% in reactive organizations to more than 2800% for those integrative- enterprises that are leveraging BlackBerry smartphones and BlackBerry enterprise solutions strategically as a vital business enablement tool throughout the organization. Within each of these deployment s, there are ROI ranges that are based on the results from the quantitative and qualitative survey results. Several factors contribute to the difference in ROIs across each deployment. These factors include the number of BlackBerry Enterprise Servers needed, time and effort to train and support BlackBerry smartphone users, and costs to develop, maintain, and support mobility applications for BlackBerry smartphones. In general, more mature organizations experience greater costs in terms of support and mobility applications. Despite this, the major cost components for all deployment s are voice and data plan costs, which account for between 59% and 75% of the total costs. The key benefits achieved by BlackBerry solution deployment are focused on improving employee business efficiency. These productivity improvements vary depending on the type of worker using BlackBerry smartphone devices and the range of mobile applications deployed over these smartphones. More specifically, employees in executive management, sales force, and field service achieve the greatest productivity improvements as a result of using BlackBerry smartphones. IT and customer service personnel also achieve significant productivity benefits from BlackBerry smartphone devices and mobile solutions. - 26 -
Appendix A: Profile Of Quantitative Survey Respondents A key component of the study conducted by Forrester on behalf of RIM is the quantitative online survey of 150 IT and mobility decision-makers at enterprises with 1,000-plus employees with headquarters in North America (i.e., US or Canada). The purpose of this online survey was to examine the current and future life-cycle costs of a RIM/BlackBerry enterprise environment. These survey respondents included IT administrators, mobile administrators, and senior IT management with a title of director or above (e.g., senior manager, director of IT, SVP of IT, or CIO/CTO). Survey respondents were personally responsible for mobile device initiatives in their organization, including: recommending smartphones and/or wireless carriers/plans, working with business unit executives to identify mobile solutions for employees, developing mobile strategy and policy, managing costs related to mobile devices and service plans, administering mobile servers, and developing or specifying applications for mobile devices. Additional profile details of the online survey respondents are included in Figure A1 and Figure A2 below. Figure A1: Profile Of 150 North American Enterprise Survey Respondents Reactive deployment Proactive deployment Integrative deployment Average number of smart mobile devices supported Average number of BlackBerry smartphones supported Average number of BlackBerry Enterprise Servers supported* Average number of functional areas using mobile applications on BlackBerry smartphones Average BlackBerry maturity score calculated by the TEI tool 4,155 9,118 17,679 1,981 5,192 12,966 16 33 41 1 3 5 25% 50% 78% *Note: There is a wide range of BlackBerry Enterprise Servers used because enterprises use a variety of deployment strategies. Some have separate servers for test, production, and backup, and some of these BlackBerry Enterprise Servers have a minimal number of devices on them during certain testing and production times. - 27 -
Figure A2: Survey Respondents Are Distributed Across Industry Vertical Markets And Mobile Maturity Deployment Stages Reactive Deployment Stage Proactive Deployment Stage Integrative Deployment Stage Total Chem and petroleum manufacturing 1% 2% 1% 4% Consumer products manufacturing 5% 6% 1% 12% Financial services 6% 9% 4% 19% Government 1% 2% 0% 3% Healthcare 0% 3% 0% 3% High-tech products manufacturing 1% 7% 2% 10% Industrial products manufacturing 1% 1% 0% 3% Insurance 1% 3% 0% 4% Media, entertainment, and leisure 1% 5% 0% 6% Primary products manufacturing 1% 1% 1% 3% Professional services 1% 8% 3% 13% Public services 1% 1% 0% 2% Retail 1% 5% 0% 5% Telecom carriers 1% 3% 1% 5% Transportation and logistics services 1% 3% 0% 4% Utilities 1% 1% 0% 1% Wholesale 1% 2% 0% 3% Grand Total 27% 61% 13% 100% - 28 -
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. The TEI methodology used in this study uses four components to evaluate investment value: benefits, costs, risks, and flexibility. 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. Risk Risk is the third component within the TEI model; it is used as a filter to capture the uncertainty surrounding different cost and benefit estimates. For the purpose of this analysis, Forrester riskadjusts cost and benefit estimates to better reflect the level of uncertainty that exists for each estimate. If a risk-adjusted ROI still demonstrates a compelling business case, it raises confidence that the investment is likely to succeed because the risks that threaten the project have been taken into consideration and quantified. The TEI model uses a triangular distribution method to calculate risk-adjusted values. To construct the distribution, it is necessary to first estimate the low, most likely, and high values that could occur within the current environment. The risk-adjusted value is the mean of the distribution of those points. The risk-adjusted numbers should be taken as realistic expectations, since they represent the expected values considering risk. The components of risk considered in this analysis are: Implementation risk: the risk that the proposed technology investment may deviate from original resource requirements needed to implement and integrate the investment into the environment. This could occur if the required resources for project implementation are inadequate or the technology causes unforeseen disruption to the environment. Implementation risk generally applies to cost estimates within an investment. - 29 -
Impact risk: the risk that the business or technology needs of the organization may not be met by the technology investment. If the technology is an internal-facing investment, this could occur if the end user does not change his or her behavior or if the organization lacks the political will to change its behavior. If the technology is externally focused, then potential risks could include lower than anticipated use by customers or external groups. Impact risk generally applies to benefit estimates within an investment. Strategic risk: the risk that the proposed technology investment may not meet the strategic goals of the organization. This could occur if the strategic goals are not clear or understood or if the strategic goals change or evolve after the investment is approved. Measurement risk: the risk that there is not an effective process for measuring and tracking cost and benefit estimates after project implementation. This could occur if the organization has not set specific baselines for improvement or it has not been able to tie specific estimates to the organization s bottom line. From an implementation perspective, the following risk factors could potentially affect the original variables used to construct the cost estimates: Technology: the risk that the project will not fit into the current technology environment. As a result, an organization may have to incur additional costs in order for the original investment to be realized. For example, an organization decides to implement an asset management solution not realizing that it has inadequate server requirements to fully roll out the investment. This could potentially cause an increase in costs for the portal to meet the organization s original expectations. Vendor: the risk that a chosen vendor will fail to deliver needed features and functionality or components in a usable state in a timely basis. This would also include the possibility that the vendor may not support a given technology, leading in turn to additional management and support costs. For example, an asset management vendor is acquired forcing organizations to renegotiate their maintenance contracts over time. This would cause the potential for management and maintenance costs to increase. Education: the risk that IT personnel do not have sufficient skills to implement and run the proposed technology. In addition, this risk includes the likelihood that external service providers do not have adequate skills to implement the proposed technology solution. For example, an organization decides to implement an asset management solution with the assumption that the existing IT organization has sufficient skills to implement and manage the new technology. If the skills are insufficient, this could cause an increase in the implementation costs of the new technology. From an impact perspective, the following risk factors could potentially affect the original variables used to construct the benefit estimates: Culture: the risk that users are adverse to change and ultimately do not change their behavior. For example, mismatching tools and users will decrease potential benefits. Training: the risk that the users will be insufficiently trained to derive any benefit from the new solutions/tools. This would lead to potentially lower adoption of the proposed technology solution. For example, an organization may not have adequately provided training during the rollout of an asset management solution. Ineffective or inadequate training will cause lower adoption of the new system than anticipated. - 30 -
Market: the risk that the market will change between project definition and benefits realization, decreasing the usefulness of the system or potentially rendering it obsolete. This risk applies primarily to externally facing systems where customer adoption remains a key component. For example, if a pharmaceutical organization designs a portal for its customers specifically about a new drug, declining market share could reduce the expected traffic to the site. The risk factors for both implementation and impact risk are used as a guide to determine how the cost and benefit assumptions can change from our original estimates. 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 enterprise-wide 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 in time. However, having the ability to capture that benefit has a present value that can be estimated. For the purposes of this study, the flexibility component of TEI captures that value in the form of direct benefits with a likelihood of occurring greater than 75%. - 31 -
Appendix C: Glossary Discount rate. The interest rate used in cash flow analysis to take into account the time value of money. Although the Federal Reserve Bank sets a discount rate, companies often set a 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 organization 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. 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. - 32 -
Appendix D: TEI and ROI Model Details The data used to inform findings articulated in this report was analyzed using a custom-built TEI financial model to calculate the value proposition and ROI of deploying Blackberry smartphones. The financial impact of a BlackBerry solution on an organization is calculated using formulas and macros that model Forrester s well-known Total Economic Impact (TEI) methodology, which systematically looks at the potential effects of technology investments across four dimensions: (1) costs; (2) benefits; (3) flexibility; and (4) risks. Development Methodology To develop this calculator, known as the BlackBerry Value Calculator, Forrester drew on a number of resources. First, the team drew on the expertise of Forrester analysts, data, and published research to develop an understanding of current market conditions and features of mobility in general. Concurrently, Forrester studied materials provided by RIM to establish a background in the specific features and benefits offered to enterprise organizations that deploy BlackBerry solutions. In addition, Forrester scheduled interviews with stakeholders from RIM to further understand typical patterns of deployment and the achievement of commensurate benefits. Stakeholders included sales, marketing, product management, and professional services personnel who provided perspectives on product positioning and current sales processes. Forrester also conducted in-depth interviews and quantitative surveys with RIM customers to validate and enhance the data gathered about the total cost of ownership and total direct and indirect benefits an enterprise organization can expect from deploying BlackBerry solutions. Maturity Analysis Based on Forrester s research, the ROI and value of BlackBerry solution deployment varies greatly depending on the maturity of an organization in deploying BlackBerry smartphones and solutions strategically to employees in the organization to as a valuable business enablement tool. As this report highlights, enterprise organizations typically deploy BlackBerry smartphones across their workforce in three different s: Reactive, Proactive, and Integrative. Prior to quantifying the benefits and costs of deploying BlackBerry solutions, the BlackBerry Value Calculator assesses the current maturity of an organization s BlackBerry solution deployment by analyzing the answers to a series of questions regarding the user s smartphone deployment initiatives. Answers to these questions influence 10 different factors of Forrester s maturity model and a raw score is computed which is used to adjust the costs and benefits quantified by the calculator. The raw score can range from 0 to 100 and is converted into percentage terms to determine the maturity of a particular deployment (see Figure A3). Figure A3: Factors Influencing The BlackBerry Deployment Maturity Stage Of An Enterprise Factor Weight Reactive Deployment Stage (Raw Score: 0-35) Proactive Deployment Stage (Raw Score: 36-65) Integrative Deployment Stage (Raw Score: 66-100) # Mobile smart devices as % of employees (maximum) 28% 0-10% 11-25% 26-100% # Functional areas with at least 50 BB devices 23% 0-3 4-5 6+ (maximum) # Functional areas with mobile 23% 0-1 2-3 4+ - 33 -
applications beyond email (max) % BB users accessing: Email/PIM 8% 0-90% 91-95% 96-100% Productivity/Document Mgmt/Collaboration/Messaging 8% 0-25% 26-50% 51-100% Time and Billing 3% 0-5% 6-10% 11-100% CRM/Sales/FieldService 3% 0-5% 6-10% 11-100% Location-Based Services 3% 0-2% 3-5% 6-100% BI/ERP/Help Desk 3% 0-2% 3-5% 6-100% Industry Specific 3% 0-2% 3-5% 6-100% 100% Benefit Analysis Based on the calculated maturity score, the calculator quantifies the total hard and soft financial benefits deploying BlackBerry solutions across an enterprise organization. Forrester s research of existing customer organizations with sizable deployments identified the following potential benefits (see Figure A4). Figure A4: Benefits Achieved From BlackBerry Solution Deployment Enhanced Business Efficiency Increased Productivity Increased Employee Satisfaction Improved Regulatory Compliance Reduced Mobile Security Costs Shortened Sales Cycle Improved IT Performance Accelerated Back Office Support Improved Field Service Management Workflow Benefits Improved Resolution of Customer Issues Increased Customer Experience Shorten Time to Market Improved Ability to Resolve Issues Faster Security Response Cost Avoidance Multi-Vendor Cost Avoidance - 34 -
Benefits Internet Connectivity Cost Avoidance Reduced Staff Overtime Charges Each of these benefits are quantified using responses to targeted questions. The following table indicates how each of these benefits are computed (see Figure A5). Figure A5: Factors Driving Calculation of Benefits Benefit Category Summary Calculations Number of hours saved per user per week Increased Productivity X Average fully-loaded salary per hour Percent decrease in attrition rate X # Increased Employee Satisfaction BlackBerry smartphone Users X Cost of replacing an employee Decreased number of hours spent on compliance-related activities X Average Improved Regulatory Compliance fully-loaded salary per hour X Likelihood of being audited and facing penalties if noncompliant X Typical financial penalty Decreased number of hours spent on mobile security-related activities X Average fully-loaded salary per hour X Number of records available on smartphones during a catastrophic event X Average cost of addressing each record in a catastrophic event X Probability of a Reduced Mobile Security Costs catastrophic event occurring Multi-Vendor Cost Avoidance Internet Connectivity Cost Avoidance Reduced Staff Overtime Charges Shortened Sales Cycle Improved IT Performance NOTE: A company avoids these catastrophic event costs because of the security benefits of implementing BlackBerry Enterprise Servers and BlackBerry smartphones. Number of mobile operating systems supported X Hours spent per week managing each system X Percent time saved as a result of standardizing on the BlackBerry mobile operating system Percent employees that are mobile X Average cost of internet connections saved per month per mobile employee Number of BlackBerry smartphone users paid hourly X Minimum fully-loaded hourly salary X Decrease in number of hours paid overtime Number of working days per year X Number of days for a typical sales process X Percent of time that can be saved through using BlackBerry smartphones X Number of proposals handled concurrently X Percent of proposals resulting in sales X Average revenue per sales deal X Profit margin Number of help desk requests solved - 35 -
Accelerated Back Office Support Improved Field Service Management Improved Resolution of Customer Issues Increased Customer Experience Shorten Time to Market Improved Ability to Resolve Issues Faster Security Response faster per month X Average time saved per help desk request because of BlackBerry usage X Duration of each help desk request X Average fully-loaded salary per hour Average amount of receivables per day that could accrue interest X reduced time to collect receivables because of improved approval process from BlackBerry solution implementation X prevailing interest rate + average amount of payables per day that could accrue interest X increased time to earn interest X prevailing interest rate. Number of additional calls each FTE can make X value of a successfully completed FSM call Number of second-level support calls that could be avoided X Cost of successfully resolving a second-level support call Annual revenue lost due to poor service but reclaimed due to BlackBerry usage Number of additional projects completed annually due to improved productivity and communication X Average profit margin per project Number of incidents annually requiring direct/immediate access to executive X Time saved in ability to reach quicker with BlackBerry X Average fully-loaded salary rate per hour Number of incidents annually requiring direct/immediate security response X Time saved in ability to address incident quickly with BlackBerry X Cost per incident per hour Cost Analysis The BlackBerry Value Calculator also quantifies the total direct and indirect costs of deploying BlackBerry solutions across an enterprise organization. The table below identifies costs which need to be taken into consideration when quantifying the total cost of ownership and also provides details as to how each cost category is computed (see Figure A6). Figure A6: Costs Incurred As A Result Of BlackBerry Solution Deployment Cost Category Summary Calculations BES BlackBerry Devices Number of BlackBerry Enterprise Servers in use X annual license fee per BlackBerry Enterprise server + Cost of professional services for deployment/support + Number of days to install/deploy servers by a FTE X Number of FTEs to install/deploy servers X Daily wage per FTE + additional acquisition cost for servers + annual maintenance fees for BlackBerry Enterprise servers + Number of days to maintain servers by a FTE X Number of FTEs to maintain servers X Daily wage per FTE + Cost of IT BlackBerry Enterprise Server training Number of devices supported X Cost of each device paid X percent of device cost paid by company + cost of professional services to - 36 -
User Support End User Training Voice and Data Plans Mobility Applications customize/configure/test/deploy devices + average annual cost of provisioning + Number of FTEs to customize/configure/test/deploy devices X Number of hours spent on customize/configure/test/deploy X Hourly FTE salary rate + Additional costs to customize/configure/test/deploy devices and extend warranty Annual billable cost of BlackBerry solution T support X Number of FTEs providing BlackBerry solution support X Time spent on BlackBerry solution support X IT FTE salary + Cost to train IT FTEs Cost to train BlackBerry smartphone users + Time spent developing training materials X Number of FTEs developing training Number of devices with just voice plans X Average annual cost for voice plan + Number of devices with just data plans X Average annual cost for data plan + Number of devices with voice and data plans X Average annual cost for combined plan + International roaming charges Total cost of initial license fees for off-the-shelf applications + cost of annual maintenance fees for off the shelf applications + cost of custom-developed applications Framework Assumptions Table 1 lists the discount rate used in the PV and NPV calculations and time horizon used for the financial modeling. Table 1: General Assumptions Ref. General assumptions Value A1 Discount rate 10% A2 Length of analysis Three years Organizations typically use discount rates between 8% and 16% based on their current environment. Readers are urged to consult with Finance to determine the most appropriate discount rate to use within their own organizations. In addition to the financial assumptions used to construct the cash flow analysis, Table 2 provides salary assumptions used within this analysis. Table 2: Salary Assumptions Ref. Metric Value A1 Hours per work day 8 A2 Weeks per year 48 A3 Work days per week (M-F) 5 A4 Average annual fully-loaded salary $103,750-37 -
A5 A6 A7 A8 A9 A10 A11 A12 Sales $140,000 IT $80,000 Admin/finance/HR $60,000 Field service $75,000 Customer Service $75,000 Supply Chain $75,000 Executive management $250,000 Physical plant/security team $75,000-38 -
Appendix E: Endnotes 1 BlackBerry, RIM, Research In Motion, SureType, SurePress and related trademarks, names and logos are the property of Research In Motion Limited and are registered and/or used in the U.S. and countries around the world. Used under license from Research In Motion Limited. 2 Additional information on overall trends and adoption of enterprise mobility initiatives among enterprise and small and medium organizations in North America and Europe are available. See the July 28, 2009, Demand Insights: Enterprise Mobility 2009 report. [46844] - 39 -