August 2022

The Total Economic Impact™ Of Ensono IT Infrastructure Management Services

Cost Savings And Business Benefits Enabled By Ensono IT Infrastructure Management Services

Ensono logo

A Forrester Total Economic Impact™ Study Commissioned By Ensono, August 2022

Table Of Contents

Outsourcing in the post-pandemic era is evolving beyond legacy infrastructure maintenance to meet today’s challenging and complex business needs. In the midst of rapid change, enterprises considering outsourcing must look beyond hard cost savings to enable activities that accelerate innovation, improve retention, and create differentiation. Ensono’s infrastructure transformation and modernization services help organizations accelerate digital transformation and achieve lasting business outcomes.

Ensono provides IT infrastructure transformation and modernization services, enabling organizations to digitally transform and modernize across platforms to achieve business outcomes with a broad portfolio of management services and capabilities, including cloud-native development, managed public cloud, private cloud, and mainframe services. Ensono provides a flexible engagement model that includes any combination of remote or hosted management of customer IT infrastructure, replacement with Ensono-owned equipment, and data center or cloud migrations.

Ensono commissioned Forrester Consulting to conduct a Total Economic Impact (TEI) study.1 The purpose of this study is to examine the potential return on investment (ROI) enterprises may realize by deploying Ensono’s IT infrastructure management services and provide readers with a framework to evaluate the potential financial impact on their organizations.

To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed and surveyed decision-makers at four organizations using Ensono’s IT infrastructure management services. Forrester also surveyed 54 CEOs, CIOs, and VPs whose organizations invested in or are planning to invest in an IT infrastructure managed service provider (MSP). This survey, commissioned by Ensono, was designed to gain a more granular understanding of the current and anticipated business impacts of recent market trends including the Great Resignation. Results were combined into a single composite organization, a global, multibillion-dollar organization with 3,600 employees, a hybrid-IT infrastructure environment, and operations in a general regulated industry.

Prior to using Ensono’s IT infrastructure management services, the interviewees’ organizations struggled with antiquated technology, capacity limitations, and the loss or lack of internal expertise, which exposed them to a host of issues including unreliable application performance, slow application development, and increased security risk. Several interviewees cited difficulties acquiring and retaining IT talent given tight labor market conditions. Likewise, 79% of the IT executives surveyed believe that current employee attrition trends, commonly referred to as the Great Resignation, have had or will have some degree of impact on their business.2 For most organizations, IT was not the main focus of the business, and the challenges it presented distracted from their abilities to achieve their business goals.

After the investment in Ensono’s IT infrastructure management services, interviewees’ and survey respondents’ organizations were able to reduce their IT infrastructure and labor costs by a significant degree. Ensono was also able to deliver security and performance improvements that reduced network downtime. After investing in an MSP, their companies gained numerous strategic improvements, including being able to take advantage of more growth opportunities, freeing IT staff to spend more time on higher-value tasks and increasing staff productivity.

Consulting Team:
  • André Girard, Caro Giordano

Key Statistics

  • icon
    ROI
    43%
  • icon
    Benefits PV
    $4.72M
  • icon
    NPV
    $1.41M
  • icon
    IT COSTS
    >5% lower

Key Findings

Benefits. Three-year, risk-adjusted present value (PV) quantified benefits and the top unquantifiable benefits for the composite organization include:

  • Strategic value of MSP partnership.

    The composite organization considers Ensono to be a significant business partner and adviser to its business operations. Stakeholders especially appreciate Ensono’s culture as a relentless ally, which is evident in proximity to senior management, transparency, willingness to collaborate, and follow-through on challenging technical issues.

  • $1.2 million avoided in IT infrastructure and software license costs.

    The composite organization is able to do more with the same or fewer resources thanks to process improvements, increased automation, and optimized and streamlined production flows. Ensono eliminates underutilized capacity and helps it negotiate better pricing on cloud services and software licenses. Over three years, the savings are worth more than $1.2 million to the composite organization.

  • More business opportunities.

    Ensono empowers the composite organization to expand its business by providing the ability to tap additional processing capacity when needed.

  • More effective business and employee “flow.”

    Outsourcing infrastructure management to Ensono gives the composite organization a more efficient IT environment to operate in, removing technology barriers that interrupt flow and can contribute to employee frustration and dissatisfaction. As a result of working with Ensono, employees can focus on more strategic work, such as expanding the composite organization’s customer base, supporting new business initiatives, and enabling faster time-to-market.

  • More than $1.6 million saved in IT infrastructure labor costs.

    Contracting with Ensono enables the composite organization to avoid the challenges of finding and hiring IT infrastructure expertise. The company can reallocate existing hires and avoid future planned staffing. Over three years, the savings amount to more than $1.6 million for the composite organization.

  • Reduction in network downtime, avoiding $1.8 million in lost revenue.

    Ensono reduces weekly initial program load (IPL) processing times and brings structure and best practices to security functions, improving network uptime. The recaptured uptime is estimated to save the composite organization $1.8 million over three years.

Additional unquantified benefits. Benefits that are not quantified in this study include:

  • Strong account team.

    Ensono supports customers through associates assigned to each account that include the customer success team, account managers, director of operations, and help desk staff. The teams are focused on providing transparency, openness, quick response times, and overall helpfulness.

  • Depth and breadth of Ensono's expertise.

    Ensono provides superior technical experts who are willing to engage and collaborate with customers’ own internal staff. Decision-makers at the composite organization believe that Ensono’s technicians help the IT team better understand the organization’s infrastructure and how to manage it, making it easier to communicate with senior management on reasons for making changes.

  • Modernized technology.

    Ensono modern IT management technologies, systems integration, and management practices enables organizations to achieve higher levels of application performance, availability, and business performance.

  • Improved security.

    Ensono services include restructuring and upgrading customer networks and putting improved security monitoring and patching processes into place, which can result in faster response to and resolution of issues.

Costs. Three-year, risk-adjusted PV costs for the composite organization include:

  • Ensono services cost.

    Ensono’s IT infrastructure management services are customized for each customer and vary based on the customer’s infrastructure and the specific services provided. The risk-adjusted PV of Ensono’s IT infrastructure management services costs for the composite organization come to just less than $2.9 million over three years.

  • Internal labor costs for IT infrastructure modernization and migration projects.

    The composite organization takes six months to plan, migrate, test, and deploy the IT infrastructure modernization initially needed for making the switch to Ensono. In subsequent years, these costs are reduced by more than half. The three-year, risk-adjusted PV associated with these costs comes to $407,100.

The representative interviews and financial analysis found that a composite organization experiences benefits of $4.72 million over three years versus costs of $3.31 million, adding up to a net present value (NPV) of $1.41 million and an ROI of 43%.

“There’s a genuine level of care. They want to do the right thing and do right by their customers and grow the business honestly. That’s something I personally value. I can have a good relationship with Ensono based on that level of trust.”

VP of infrastructure, retail

Benefits (Three-Year)

TEI Framework And Methodology

From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Ensono IT infrastructure management services.

The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Ensono IT infrastructure management services can have on an organization.

  • icon
    DUE DILIGENCE

    Interviewed Ensono stakeholders and Forrester analysts to gather data relative to Ensono IT infrastructure management services.

  • icon
    INTERVIEWS

    Interviewed four representatives at organizations using Ensono IT infrastructure management services to obtain data with respect to costs, benefits, and risks.

  • icon
    COMPOSITE ORGANIZATION

    Designed a composite organization based on characteristics of the interviewees’ organizations.

  • icon
    FINANCIAL MODEL FRAMEWORK

    Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.

  • icon
    CASE STUDY

    Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.

DISCLOSURES

Readers should be aware of the following:

This study is commissioned by Ensono 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 study to determine the appropriateness of an investment in IT infrastructure management services.

Ensono 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.

Ensono provided the customer names for the interviews but did not participate in the interviews.

NEXT SECTION: The Ensono IT Infrastructure Management Services Customer Journey

Interviews

Role Industry Revenue Region Employees Data Centers Mainframes
VP of managed services Software $250M to $500M Global 4,500 2 (1 in process of migration) 1 remote hosted
Mainframe tech delivery specialist Insurance $2B to $5B Global 3,500 1 2 remote hosted
Director of IT Utilities $10M to $25M US 375 1 0
VP of infrastructure Retail $500M to $1B Global 6,500 1 0
“When you look at the cost of hiring two infrastructure people and compare that to what Ensono costs, it’s not even close because Ensono brings so much more to the table.”

Director of IT, utilities

Key Challenges

Forrester conducted a custom survey on behalf of Ensono in June 2022, and results include responses from 54 CEOs, CIOs, and VPs of infrastructure. Prior to signing up with Ensono, organizations of both interviewees and survey respondents struggled with common challenges, including:

  • Physical infrastructure in need of modernization.

    Several interviewees noted their organization’s IT infrastructure had reached the limits of what it could accomplish. One interviewee, a VP of managed services for a software firm, said that their organization’s hardware was so outdated, it was unable to add more disk capacity without a lengthy upgrade of hard drives. These hosting capacity limits constrained sales opportunities and slowed time-to-market.

    Another interviewee, a VP of infrastructure for a company in the retail industry, echoed the need for a wholesale reevaluation of their organization’s IT infrastructure, noting that instabilities had led to frequent network failures. High costs and a legal dispute with a cloud vendor drove this organization to migrate to a new cloud provider.

    The director of IT for a company in the utilities industry reinforced the need for modernization. They said: “If we continue on with [the infrastructure we had in place], we’re going to have to double the server counts, put load balancers in, and essentially double the cost of our infrastructure [and] potentially triple the cost if we need to do more servers. One of the things we were looking for was the provider to help us to some extent modernize what we have and take advantage of what cloud platforms are able to offer as we scale in high availability to not have everything in our data center.”

    A majority of survey respondents reported key IT complexity and high costs as reasons for shifting their organizations’ IT strategies to work with an MSP. Fifty-nine percent reported that IT infrastructure systems were becoming increasingly complex, 54% said that IT infrastructure was at capacity limits, and 46% stated that high operation and maintenance costs were a reason for the transition to an MSP.3

  • Loss or lack of internal expertise.

    The director of IT for a company in the utilities industry said their organization struggled with limited IT resources and infrastructure expertise needed to manage both the company’s rapid growth as well as to integrate the IT infrastructure assets of a recently acquired company.

    The VP of infrastructure for the retail organization also noted multiple knowledge and resource gaps as a result of previous corporate turmoil.

  • Growing security exposure as a result of inefficient processes.

    The director of IT in the utilities industry described their organization’s patching process as inefficient and inconsistent, leaving it exposed to security breaches.

  • IT labor market pressures driving up costs.

    Several interviewees cited difficulties acquiring and retaining IT talent given tight labor market conditions. The mainframe tech delivery specialist in the insurance industry explained that expertise was retiring out of their organization, and backfilling these positions was becoming cost-prohibitive, leaving the organization lacking the expertise and resources to effectively migrate applications off its mainframe. Thirty-five percent of survey respondents reported staff shortages as a reason for working with or planning to work with an MSP, and 31% reported rising labor costs as an additional reason.4

  • IT was complex, but not the main focus of the business.

    Thirty-nine percent of survey respondents reported that IT issues distract from their organization’s business focus.5 For many organizations of the survey respondents and interviewees, IT was not the main focus of the business, so the challenges it presented distracted from their abilities to achieve their other business goals.

Solution Requirements/Investment Objectives

The interviewees’ organizations searched for a managed service provider that could:

  • Deliver a reliable pipeline of IT resources with the specialized knowledge they lacked.
  • Provide technical advice and expertise to help the organization grow.
  • Provide an IT environment that could easily and flexibly scale up or down in size and speed to meet evolving business needs.
  • Quickly and reliably manage migrations to cloud (both on-prem and cloud-to-cloud) and phase out legacy infrastructure.
  • Ensure better stability through a rearchitected network.
  • Improve security through improved endpoint management and patching processes.
  • Control IT infrastructure costs through discounted MSP pricing based on data-center size rather than headcount.
  • Save IT labor costs by outsourcing.
  • Enable the organization to focus on its core business.

These expected benefits are similar to those identified in the custom survey research. Twelve of 13 executives at organizations planning to work with a managed service provider rated all of the following attributes as important or very important benefits to receive, compared to its current environment:

  • Improving employee retention through better technology and technology services.
  • Reducing the number of third-party consultants or services supporting IT infrastructure.
  • Reducing operational downtime.
  • Increasing reliability, availability, and mean-time-to-repair.

Other important reasons include helping the company become more competitive and enabling the business to focus on other higher-value or more creative initiatives.6

“Senior management’s plan was to have an environment that was variable [and] that could be dialed down if workload moved off. We engaged with Ensono due to their expertise of the products we used. They were very well-versed on which models would give us the best financial position, and they provided a lot of information to guide that renewal into where we are.”

Mainframe tech delivery specialist, insurance

Composite Organization

Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the four interviewees, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:

  • Description of composite.

    The composite is a global, multibillion-dollar organization with 3,600 employees, and it operates in a general regulated industry. The organization has a hybrid IT infrastructure with a remote hosted data center, one mainframe, and a cloud presence. The organization wishes to modernize its IT infrastructure and expand cloud resources. Its mainframe staff is graying out of the workforce.

  • Deployment characteristics.

    IT infrastructure management services provided by Ensono cover the composite organization’s data center, mainframe, and cloud services, all remotely hosted.

Key Assumptions
  • $1.5 billion in revenue
  • 3,600 employees
  • Hybrid IT infrastructure with remote hosted data center, mainframe, and cloud presence
NEXT SECTION: Analysis Of Benefits

Total Quantified Benefits

Ref. Benefit Year 1 Year 2 Year 3 Total Present Value
Atr Avoided IT infrastructure and software license costs $270,000 $497,250 $724,613 $1,491,863 $1,200,817
Btr IT infrastructure labor cost savings $567,000 $715,500 $751,500 $2,034,000 $1,671,390
Ctr Reduction in network downtime $742,295 $742,295 $742,295 $2,226,884 $1,845,977
Total benefits (risk-adjusted) $1,579,295 $1,955,045 $2,218,407 $5,752,746 $4,718,184
“That’s where they’ve been a good partner. Between what our folks do and what they alert us on or come to the table with as far as recommendations go, they’ve definitely kept our costs under control.”

VP of infrastructure, retail

Strategic Value Of MSP Partnership

  • Evidence and data.

    Interviewees consider Ensono a significant business partner and adviser to their organizations’ business operations. According to the mainframe tech delivery specialist: “The overall relationship is very strong. The majority of senior management at Ensono knows us and is attentive to our needs. I’ve been impressed with Ensono, and I am looking to engage with them further to learn their business and their depth on a technical level.”

    This was reinforced by the VP of infrastructure for the company in the retail industry. They said: “[It’s great] just having that partner to work with the heavy lifting with regard to doing these migrations, whether from on-prem or cloud to cloud. We’ve relied on them a lot for that work, and they have helped. I hold my vendors to the same performance level as my own staff. What I like about Ensono is they don’t BS. They are transparent. I can work with them. Most importantly, we find resolution. We find common ground. We find ways to fix issues and then, most importantly, they follow through and they execute on it.”

    Survey responses in the custom survey Forrester conducted for Ensono reinforce the strategic impact of engaging with an IT infrastructure MSP. Among CEOs and VPs from organizations that work with an MSP, many agreed or strongly agreed that the top benefits their companies received includes:7

    • Enabled business to focus on other higher-value or more creative initiatives (95% agreed or strongly agreed).
    • Provided IT with a more cohesive vision across the organization’s technologies (95%).
    • Realized efficiencies by consolidating/replacing systems (90%).
    • Increased reliability, availability, and mean-time-to-repair, etc. (90%).

Avoided IT Infrastructure And Software License Costs

  • Evidence and data.

    Ensono’s services enabled interviewees’ organizations to reduce IT infrastructure costs by a significant degree.

    • Interviewees’ organizations were able to do more with the same or fewer IT resources thanks to process improvements, increased automation, and optimized and streamlined production flows. The director of IT for a company in the utilities industry noted Ensono found several servers with low usage and was able to shut down one server following consolidation. A VP of infrastructure in the retail industry estimated their organization was able to get rid of 20 servers while expanding capacity at the same time.
    • Another interviewee, a VP of managed services for a software company, explained that Ensono helped their organization eliminate underutilized million instructions per second (MIPS) capacity, saving the company $3,000 to $5,000 per month on those resources alone.
    • Results from the custom research Forrester conducted for Ensono show that 83% of survey respondents’ organizations that are working with an MSP decreased their total IT infrastructure management costs by 5% or more. For 35% of surveyed respondents’ organizations, the total reduction totaled 10% or more.8
    • Ensono also helped interviewees’ organizations negotiate better pricing on cloud services and software licenses. A VP of infrastructure in retail said their organization was able to shift to a lower-cost cloud provider, rightsizing and shrinking its footprint in those environments and consolidating rates. They said: “Ensono has really helped us with things around reserved instance (RI) usage. Every month, they come to the table and make a set of recommendations based on our usage. When we do have underutilized systems or pay as [we] go that’s been going on for months, they don’t wait a year before bringing it to our attention.”
    • The director of IT for the company in the utilities industry said Ensono understands how cloud service providers price their service and helps their customers navigate through them to get the best deals. The director said: “Similar to a lot of big tech companies, there’s like 40 options, and you don’t know which one is the best one to go with. We had a meeting [with Ensono], and they came back with recommendations on what servers we should renew. They definitely helped direct and understand how to best utilize the VM (virtual machine) pricing options we had.”
  • Modeling and assumptions.

    To model this benefit for the composite organization, Forrester assumes:

    • The composite organization is able to consolidate and reduce IT infrastructure costs by $250,000 per year.
    • The composite organization is able to negotiate more favorable pricing on software licenses, saving $50,000 the first year, with savings growing 5% in subsequent years.
  • Risks.

    Factors impacting the realization of this benefit include:

    • The organization’s ability to consolidate and reduce IT infrastructure.
    • The organization’s ability to negotiate more favorable pricing for software licenses.
  • Results.

    To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.2 million.

“In the monthly reports and meetings I have with Ensono, they identified a number of things that have helped me save money.”

Director of IT, utilities

Avoided IT infrastructure And Software License Costs

Ref. Metric Source Year 1 Year 2 Year 3
A1 Avoided intrastructure costs Interviews $250,000 $500,000 $750,000
A2 Annual software license cost reduction Composite (5% yearly growth) $50,000 $52,500 $55,125
At Avoided IT infrastructure and software license costs A1+A2 $300,000 $552,500 $805,125
Risk adjustment ↓10%
Atr Avoided IT infrastructure and software license costs (risk-adjusted) $270,000 $497,250 $724,613
Three-year total: $1,491,863 Three-year present value: $1,200,817
84% of IT executives working with an MSP agree or strongly agree with the statement: “Our business employees are more productive due to investment in an MSP.”

More Effective Business And Employee "Flow"

  • Evidence and data.

    Before the COVID-19 pandemic, the IT workforce was already facing a talent shortage that was made more competitive because tech workers are not constrained to a particular industry.9

    Now, employment changes, such as Baby Boomer retirement and younger people choosing different career paths have been accelerated by the pandemic.10

    Among the IT executives surveyed, 79% believe these attrition trends, commonly referred to as the Great Resignation, have had or will have some degree of impact on their business.11 In response to these concerns, 96% of the executives are planning or already changing what their organization does. They are taking steps such as improving the technology environment for better collaboration and productivity or leveraging strategic partners to outsource management of IT infrastructure department(s).12

    Outsourcing infrastructure management to Ensono gave the interviewees’ organizations more efficient IT environments to operate in, removing technology barriers that interrupt flow or productivity and can contribute to the frustration and dissatisfaction that causes employees to leave.

    Of the 41 surveyed executives whose organization works with an MSP today, 95% agree or strongly agree that their partnerships with their MSPs have enabled their business to focus on higher-value and more creative initiatives. Additionally, 83% of those executives agree or strongly agree that improved employee retention is a direct benefit of these partnerships.13

    Interviewees noted that their organizations were able to focus on more strategic work (e.g., growing their customer bases, supporting new business initiatives, enabling faster time-to-market) as a result of working with Ensono. The director of IT for the company in the utilities industry underscored this with their plans to move to more of a cloud-based architecture to facilitate this enhanced state of productivity.

Important Benefits Enabled By MSP Implementers
  • Strategic value
  • Having more time to be creative (and stay in the flow)
  • Having a cohesive IT vision
  • Right-sizing resource needs where needed
  • Being a sought-after employer with modernization

More Business Opportunities

By giving customers the ability to tap additional processing capacity when needed, Ensono empowers them to grow their businesses. Because customers lease hardware rather than buy it, they can scale their infrastructure up or down more quickly in response to fast-changing business needs.

According to a VP of managed services for a software firm: “The difference now is it’s not dedicated hardware. Now, if I need more disk space, I just ask. If I need more memory or CPU, it’s just a change request and some coordination. [Ensono] can very quickly provide me with the additional capacity and power needed for my operation. [The added capacity] allows [my organization] to sell to more customers because we don’t have the limitation in growth.”

Responses from the custom survey Forrester Consulting conducted highlight the potential impact of using an MSP on business-growth opportunities. Ninety-five percent of executives at companies using an MSP in their IT organizations agree or strongly agree that their business can take advantage of more growth opportunities. Additionally, 80% agree or strongly agree that their business has grown at a higher rate since investing in an MSP.14

IT Infrastructure Labor Cost Savings

  • Evidence and data.

    Contracting for Ensono’s IT infrastructure management services enabled interviewees’ organizations to avoid the difficulty and expense of finding and hiring IT infrastructure expertise themselves and allowed them to reallocate existing hires and future planned staffing.

    • A VP of managed services for a software company estimated their organization was able to avoid hiring five FTEs with mainframe and IBM AS400 experience as a result of investing in Ensono.
    • A VP of infrastructure for a fast-growing company in the retail industry said their organization was not able to reduce its staff size, but that after investing in Ensono, it avoided hiring four to six more FTEs needed for cloud development than originally estimated.
    • A director of IT for a company in the utilities industry estimated their organization avoided hiring two FTEs to cover infrastructure and security management requirements. The interviewee explained: “If something breaks, I know I can call Ensono’s emergency line and get some help immediately. We went back and forth about it, and all came to the same conclusion that, for a company of our size, [when choosing between] hiring a couple of people compared to what we would get through Ensono, the Ensono option seemed to be more favorable.”
    • Of surveyed executives, 74% said their organization is planning to or has already started changing its hiring and retention practices, based on its partnership with its MSP, as well as to improve employee experience and retention to counter talent scarcity and higher costs as a result of the Great Resignation.15
  • Modeling and assumptions.

    To model this benefit for the composite organization, Forrester assumes that by shifting IT infrastructure management work to Ensono and reallocating existing staff to other activities, the composite organization avoids costs associated with recruiting, training, and employing three FTEs in Year 1, two additional FTEs in Year 2, and one additional FTE in Year 3.

  • Risks.

    A key factor impacting the realization of this benefit is the size and composition of the organization’s IT staff relative to needed skills before and after the Ensono investment.

  • Results.

    To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV of $1.7 million.

IT Infrastructure Labor Cost Savings

Ref. Metric Source Year 1 Year 2 Year 3
B1 IT infrastructure labor reallocation (FTE) Interviews 3 5 6
B2 Average annual cost of IT infrastructure technician (fully burdened) TEI standard $125,000 $125,000 $125,000
B3 IT infrastructure employee recruiting and hiring avoided (FTE) Interviews 3 2 1
B4 IT infrastructure employee replacement cost Industry average $85,000 $85,000 $85,000
Bt IT infrastructure labor cost savings (B1*B2)+(B3*B4) $630,000 $795,000 $835,000
Risk adjustment ↓10%
Btr IT infrastructure labor cost savings (risk-adjusted) $567,000 $715,500 $751,500
Three-year total: $2,034,000 Three-year present value: $1,671,390
“For the peace of mind, I can’t explain how much better I feel about making a decision now than I did before Ensono showed up.”

Director of IT, utilities

Reduction In Network Downtime

  • Evidence and data.

    The interviewees discussed security and performance improvements Ensono was able to deliver and the impact this had on network downtime.16

    • A mainframe tech delivery specialist for a company in the insurance industry explained how Ensono brought its expertise to bear on maintenance schedules and maintenance windows, resulting in notable performance improvements. According to this interviewee, Ensono reduced weekly initial program load (IPL) processing times from 4 to 5 hours to 2.5 hours, saving 130 hours each year. They said, “There’s been significant time improvements in those areas.”
    • The director of IT for a company in the utilities industry said they like that Ensono brought structure and best practices to their organization’s patch management process. The director said: “They don’t always immediately do the patch. One of their common practices is to wait 30 days to make sure the patch is stable before applying it. They also patch our nonproduction servers first, whereas in the previous company, it was like, ‘Well, we’re just going to patch them all over the weekend.’ ... That’s part of the reason we decided to shift to have some structure around best practices, good practices, [and] around that stuff: things like the monitoring of servers, identifying things that need to be updated, security keys, accounts that haven’t been used in 30 days and [that] need to be shut down. That’s definitely been a big benefit.”
    • This was echoed by a VP of managed services for a software company, who noted Ensono rearchitected their organization’s network to be more secure. The VP said, “[Ensono] put the right infrastructure in place, and that network structure allows us to have better security.”
  • Modeling and assumption.

    To model this benefit for the composite organization, Forrester assumes:

    • 6% of the composite organization’s revenue is impacted by IT infrastructure operational uptime.
    • IT infrastructure operational uptime for the composite organization prior to the Ensono investment was 99%.
    • After investing in Ensono, IT infrastructure operational uptime improves to 99.97%.
  • Risks.

    Factors impacting the realization of this benefit include:

    • The percentage of the organization’s revenue impacted by IT infrastructure operational uptime.
    • The operational uptime experienced before and after investing in Ensono.
  • Results.

    To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV of $1.8 million.

87% of IT executives working with an MSP reduced their operational downtime.

Reduction In Network Downtime

Ref. Metric Source Year 1 Year 2 Year 3
C1 IT infrastructure operational uptime before Ensono investment Interviews 99.00% 99.00% 99.00%
C2 Average number of hours per year of network downtime prior to Ensono (1-C1)*(8,760) 88 88 88
C3 IT infrastructure operational uptime after Ensono investment Interviews 99.97% 99.97% 99.97%
C4 Average number of hours per year of network downtime after Ensono investment (1-C3)*(8,760) 3 3 3
C5 Revenue Composite $1,500,000,000 $1,500,000,000 $1,500,000,000
C6 Revenue affected by Ensono C5*6% $90,000,000 $90,000,000 $90,000,000
C7 Revenue per hour affected by Ensono C6/8760 $10,274 $10,274 $10,274
Ct Reduction in network downtime (C2-C4)*(C7) $873,288 $873,288 $873,288
Risk adjustment ↓15%
Ctr Reduction in network downtime (risk-adjusted) $742,295 $742,295 $742,295
Three-year total: $2,226,884 Three-year present value: $1,845,977

Additional Unquantified Benefits

Additional benefits that customers experienced but were not able to quantify include:

  • Strong account team.

    The interviewed decision-makers were uniformly positive about the Ensono associates assigned to their organizations’ accounts, including the customer success team, account managers, directors of operations, and help desk staff, and they were appreciative of [Ensono’s] transparency, openness, quick response times, and overall helpfulness. According to the VP of managed services at the software firm: “We have a good relationship. We have good collaboration. Ensono is easy to work with. Every time I need some extra attention, I’m getting it. From a performance and work-relation perspective, I have no reason to look elsewhere. I’m getting good service from Ensono.”

    The director of IT at the company in the utilities industry also voiced appreciation for the breadth and resourcefulness of Ensono’s account team. They said: “With our previous vendor, I was always talking to one person. With Ensono, there’s a person who helps make sure the onboarding is smooth, and I have two people I can call directly, and they’ll pick up the phone. When we get into more technical discussions, they will find someone that lives and breathes in that space and get them on the phone.”

  • Depth and breadth of Ensono’s expertise.

    The same interviewee said Ensono’s technicians helped educate them about their IT environment and understand why things are done in a certain way. Learning more about IT infrastructure and best practices for managing it from Ensono helped this interviewee communicate better with senior management on reasons for making changes.

    The mainframe tech delivery specialist echoed this, saying: “[Ensono’s] technicians have been very forthcoming. They’re very knowledgeable and easy to work with.”

    Asked to comment on Ensono’s technical expertise, the VP of infrastructure for the company in the retail industry said: “How do you get the best quality code sets out there in as short a time possible with the highest quality? Ensono has hired very experienced people in both cloud and the DevOps world.”

  • Modernized technology.

    The interviewees’ organizations benefitted from Ensono’s more up-to-date technology. A VP of managed services for a software company said: “The new machines we moved to are much faster with much better performance. We are not at risk of missing our online SLA compliance. We have happier clients and the extra capacity to add more clients.”

    A director of IT for an organization in the utilities industry confirmed the value provided by Ensono modernizing their organization’s IT infrastructure and related processes. They said, “Lots of things here were not done before Ensono was brought in due to inexperience.”

  • Improved security.

    The VP of managed services for the software company said Ensono restructured and upgraded their organization’s network and put improved security monitoring and patching processes in place, resulting in faster response to and resolution of issues. The VP added that Ensono was more flexible than their organization’s prior vendor in scheduling and running disaster recovery drills.

    Additionally, 84% of IT executives surveyed said that partnering with an MSP has led to a reduction in security breaches.17

  • Improved compliance with SLAs.

    The same interviewee noted that Ensono helped their organization meet performance SLAs. Prior to Ensono, backups took too long. They said, “Now we can get up faster and not risk missing our online window, which we have accelerated on.”

These benefits are similar to those identified in the commissioned survey. Respondents whose company is working with a managed service provider agreed or strongly agreed that their organization received the following benefits from using a managed service provider:18

  • Enabled business to focus on other higher-value or more creative initiatives (95%).
  • Provided IT with a more cohesive vision across the organization’s technologies (95%).
  • Realized efficiencies by consolidating/replacing systems (90%).
  • Increased reliability, availability, and mean-time-to-repair (90%).
  • Helped the company become a more competitive, sought-after employer by modernizing technology (88%).
  • Reduced operational downtime (87%).
  • Reduced the need to fill positions for cloud or mainframe developers and others (86%).
  • Improved employee retention through better technology and technology services (83%).
“The technicians who are provided are top-notch. They engage readily, and their skill level is on the high end. Their support is excellent on a technical standing.”

Mainframe tech delivery specialist, insurance

Flexibility

While the value of flexibility is unique to each customer, the importance of adaptability and agility in a rapidly evolving technology landscape and unpredictable world is clear. Organizations that choose to manage their own on-premises solutions or enlist help from a partner for staff augmentation are often challenged with rigid contracts that can stymie business agility.

Ensono allows customers to shift workloads across service platforms at any time during their engagement without incurring additional charges. This gives customers the flexibility to focus on their immediate requirements, without worrying about the IT impacts of future circumstances, whether anticipated or unforeseen.

There are multiple scenarios in which a customer might implement IT infrastructure management services and later realize additional uses and business opportunities. The interviewees noted numerous future projects in planning stages for which they expect to engage with Ensono, including:

  • Future migrations, including mainframe migrations, cloud-to-cloud migrations, and migrations out of data centers.
  • Further strengthening security processes and infrastructure, including cleanup of the server environment.
  • Application development support, including transitioning to DevOps to speed delivery of applications to market.

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).

NEXT SECTION: Analysis Of Costs

Total Costs

Ref. Costs Initial Year 1 Year 2 Year 3 Total Present Value
Dtr Ensono services cost $0 $825,000 $1,100,000 $1,650,000 $3,575,000 $2,898,760
Etr Internal labor costs for IT infrastructure modernization and migration projects $240,075 $106,425 $44,550 $44,550 $435,600 $407,114
Total costs (risk-adjusted) $240,075 $931,425 $1,144,550 $1,694,550 $4,010,600 $3,305,874

Ensono Services Cost

  • Evidence and data.

    Ensono’s IT infrastructure management services are customized for each customer and vary based on the customer’s infrastructure and the specific services provided. For example, data center management costs are based on the size of the data center, not headcount, which one interviewee at a growing organization said provides important flexibility. The Ensono contracts of the interviewees’ organizations contracts range from $2 million to $2.4 million per year.

  • Modeling and assumptions.

    Based on discussions with Ensono, Forrester assumes the composite organization pays $750,000 for Ensono IT infrastructure management services in Year 1, $1 million in Year 2, and $1.5 million in Year 3.

  • Risks.

    Costs will vary based on:

    • The IT infrastructure of the organization.
    • The scope of services purchased.
  • Results.

    To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2.9 million.

Ensono Services Cost

Ref. Metric Source Initial Year 1 Year 2 Year 3
D1 Ensono IT infrastructure management cost Interviews $0 $750,000 $1,000,000 $1,500,000
Dt Ensono services cost D1 $0 $750,000 $1,000,000 $1,500,000
Risk adjustment ↑10%
Dtr Ensono services cost (risk-adjusted) $0 $825,000 $1,100,000 $1,650,000
Three-year total: $3,575,000 Three-year present value: $2,898,760

Internal Labor Costs For IT Infrastructure Modernization And Migration Projects

  • Evidence and data.

    The interviewed decision-makers estimated it took on average six months to plan, migrate, test, and deploy the IT infrastructure modernization initially needed for making the switch to Ensono. In subsequent years, these costs were reduced by more than half.

  • Modeling and assumptions.

    Forrester assumes the following for the composite organization relative to its initial IT infrastructure modernization effort and subsequent migration projects:

    • Three IT FTEs and one DBA FTE are involved in the initial IT infrastructure modernization project, and they spend 30% of their time on the six-month project.
    • Project staffing for migration projects in subsequent years is reduced to one IT FTE and one-half DBA FTE spending 30% of their time on projects that run one month each in duration.
    • The average fully burdened annual compensation for a member of the organization’s IT staff is $120,000.
    • The average fully burdened annual compensation for a member of the organization’s DBA staff is $110,000.
  • Risks.

    These costs may vary for another organization due to several factors:

    • The size and average salary of the affected workforce.
    • The organization’s ability to effectively plan and deploy the IT infrastructure modernization project and manage subsequent migration projects.
  • Results.

    To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV of $407,100.

Internal Labor Costs For IT Infrastructure Modernization And Migration Projects

Ref. Metric Source Initial Year 1 Year 2 Year 3
E1 Number of months to plan, migrate, test, and deploy Interviews 6 3 3 3
E2 Number of DBA (FTE) Interviews 1.0 0.5 0.5 0.5
E3 Number of IT (FTE) Interviews 3 3 1 1
E4 Percent of time dedicated to IT infrastructure modernization and migration projects Interviews 30% 30% 30% 30%
E5 Average fully burdened annual compensation for DBA staff TEI Standard $110,000 $110,000 $110,000 $110,000
E6 Average fully located annual compensation for IT staff TEI Standard $125,000 $125,000 $125,000 $125,000
Et Internal labor costs for IT infrastructure modernization and migration projects (E1*E2*E4*E5/4)+(E1*E3*E4*E6/4) $218,250 $96,750 $40,500 $40,500
Risk adjustment ↑10%
Etr Internal labor costs for IT infrastructure modernization and migration projects (risk-adjusted) $240,075 $106,425 $44,550 $44,550
Three-year total: $435,600 Three-year present value: $407,114
NEXT SECTION: Financial Summary

  • icon

    These risk-adjusted ROI and NPV values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.

Cash Flow Chart (Risk-Adjusted)

Cash Flow Table (Risk-Adjusted Estimates)

Initial Year 1 Year 2 Year 3 Total Present Value
Total costs ($240,075)) ($931,425) ($1,144,550) ($1,694,550) ($4,010,600) ($3,305,874)
Total benefits $0 $1,579,295 $1,955,045 $2,218,407 $5,752,746 $4,718,184
Net benefits ($240,075) $647,870 $810,495 $523,857 $1,742,146 $1,412,310
ROI 43%
Payback <6 months

The financial results calculated in the Benefits and Costs sections can be used to determine the ROI and NPV for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.

NEXT SECTION: Appendices

Appendix A: Total Economic Impact

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.

Total Economic Impact Approach

  • icon

    Benefits represent the value delivered to the business by the product. The TEI methodology places 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.

  • icon

    Costs consider all expenses necessary to deliver the proposed value, or benefits, of the product. The cost category within TEI captures incremental costs over the existing environment for ongoing costs associated with the solution.

  • icon

    Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. Having the ability to capture that benefit has a PV that can be estimated.

  • icon

    Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”

  • icon
    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.

  • icon
    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.

  • icon
    RETURN ON INVESTMENT (ROI)

    A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs.

  • icon
    DISCOUNT RATE

    The interest rate used in cash flow analysis to take into account the time value of money. Organizations typically use discount rates between 8% and 16%.

  • icon
    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.

The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 th at are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in 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.

Appendix B: Endnotes

1 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.

2 The percentages referenced in this sentence are based on 54 US CEOs and VPs who work at IT organizations that are planning to or are already working with an MSP responding to the following question: “To what degree do you feel the Great Resignation (aka, the large recent attrition of IT and other employees from companies) has impacted or will impact your organization's success?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

3 The percentages referenced in this sentence are based on 54 US CEOs and VPs who work at IT organizations that are planning to or are already working with an MSP responding to the following question: “What challenges would/did your company hope to address by implementing a managed service provider for its IT infrastructure and operations?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

4 Ibid.

5 Ibid.

6 The survey results referenced in this section are based on 13 US CEOs and VPs who work at IT organizations that are planning to work with an MSP responding to the following question: “How important would it be for your company to receive each of these as a benefit from a managed service provider as compared to its previous environment?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

7 The percentages referenced in this section are based on 41 US CEOs and VPs who work at IT organizations that are working with an MSP responding to the following question: “How much do you agree or disagree that these are benefits your company has received from using a managed service provider as compared to its previous environment?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

8 The percentages referenced in this section are based on 31 US CEOs and VPs who work at IT organizations that are working with an MSP and responding to the following question: “What has been the percentage decrease in total IT infrastructure management expenditures since partnering with a managed service provider?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

9 Source: “Unpacking The Hype About The Great Resignation,” Forrester Research, Inc., March 7, 2022.

10 Source: “The Great Resignation: The Reality Behind The Headlines,” Forrester Research, Inc., March 9, 2022.

11 The percentages referenced in this sentence are based on 54 US CEOs and VPs who work at IT organizations that are planning to or are already working with an MSP responding to the following question: “To what degree do you feel the Great Resignation (aka, the large recent attrition of IT and other employees from companies) has impacted or will impact your organization's success?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

12 The percentages referenced in this sentence are based on 54 US CEOs and VPs who work at IT organizations that are planning to or are already working with an MSP responding to the following question: “What is your organization currently doing/planning to do differently because of the Great Resignation?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

13 The percentages referenced in this section are based on 41 US CEOs and VPs who work at IT organizations that are working with an MSP responding to the following question: “How much do you agree or disagree that these are benefits your company has received from using a managed service provider as compared to its previous environment?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

14 The percentages referenced in this section are based on 39 US CEOs and VPs who work at IT organizations that are working with an MSP responding to the following question: “How much do you agree or disagree that your organization has realized the following improvements due to its investment in an MSP?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

15 The percentages referenced in this sentence are based on 54 US CEOs and VPs who work at IT organizations that are planning to or are already working with an MSP responding to the following question: “How much is your organization currently changing or planning to change its hiring and retention practices?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

16 The percentages referenced in the callout are based on 36 US CEOs and VPs who work at IT organizations that are working with an MSP responding to the following question, “On average, what has been the percentage decrease in overall operational downtime since implementing a managed service provider?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

17 The percentages referenced in this section are based on 33 US CEOs and VPs who work at IT organizations that are working with an MSP and responded to the following question: “What has been the percentage decrease in security breaches since partnering with a managed service provider?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022.

18 The percentages referenced in this section are based on 41 US CEOs and VPs who work at IT organizations that are working with an MSP responding to the following question: “How much do you agree or disagree that these are benefits your company has received from using a managed service provider as compared to its previous environment?” Source: A commissioned study conducted by Forrester Consulting on behalf of Ensono, June, 2022

About Forrester Consulting

Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester’s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit forrester.com/consulting.

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 forrester.com.

Cookie Settings