The Total Economic Impact™ Of Microsoft Power Platform

• Evidence and data.

  Interviewees shared examples of how moving more development effort to the business community saves effort and money.

  • “We are very focused on branding, so everything has to have a particular look and feel. With Power Apps, you can make everything look pixel-perfect. It allows people who aren’t developers to build tools and integrate data much faster and without the need for a full developer or consultant.”

  • “Power Platform allows my development team to focus on the back-end. Others can focus on front-end design and business needs.”

  • “We had a citizen developer build a chatbot using PVA that handles HR inquiries. The number of hours spent on employee verification requests has gone from 300,000 to practically zero. It only took a couple of weeks to build, which was much faster than if it had been built the traditional way.”

  • “The biggest benefit is that nondevelopers in both IT and business can build their own software.”

Modeling and assumptions.

• For the financial analysis, Forrester made the following assumptions based on the above examples:

• Project size is defined based on the number of users of a solution. Three percent of the composite organization’s employees (300 users) use and are impacted by large projects and 0.5% (50 users) use and are impacted by small projects. If these projects would be completed by a mix of corporate IT and professional services using traditional development tools and methodologies, a large project would cost an average of $300,000 and a medium project would cost $75,000.

• These costs are replaced by those included in the Costs section of this study (Etr). Subtracting the two results in a net savings of $2.0 million or a 48% reduction in development costs.

Risks.

• Some factors that could result in this benefit being lower than interviewees reported include:

• The mix and volume of projects that can be completed by business users.

• Prior development costs — especially the need for professional services.

To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $4.2 million.

Retired Third-Party Applications

Many solutions that the composite organization builds using Power Platform can replace third-party solutions that have license and maintenance costs. Additionally, it can replace other low-code/no-code and business intelligence solutions with Power Platform.

Evidence and data.

• Interviewees shared examples of third-party costs they could replace by using business user projects:

• “We were able to get rid of a vendor that did business intelligence for us. It was [charging] us $50,000 per year, and [charging] more if we wanted to make any enhancements. Now people are working in Power BI.”

• The composite organization replaces an expense reporting solution that cost $25,000 per year.

• The organization replaces a timesheet solution that cost $30 per user per month.

• “We canceled our [previous BI solution] maintenance contract and used those savings to pay for Power BI. We are in the process of completely getting rid of other solutions.”

• “We eliminated another data visualization tool with a very high seat cost.”

• Modeling and assumptions.

  For the financial analysis, Forrester made the following assumptions based on the above examples:

• For the composite organization, reduced business application cost savings increase over the life of the study as it retires more third-party applications. These include savings from licenses and maintenance.

• Business intelligence tool savings are realized beginning in Year 2 after prior contracts can be retired. Traditionally, very few of the composite organization’s employees used business intelligence tools because of the high per-seat cost. With Power BI, many more people can create reports, and everyone can consume this information. The $250,000 annual cost savings is indicative of a company with 10,000 employees, and the calculation is done on a per-employee basis so the reader can apply it to their organization.

Risks.

• Some factors that could result in this benefit being lower than interviewees reported include:

• The amount of money the organization spends on third-party applications and services that can be replaced by Power Platform solutions.

• Prior business analytics solutions in place and the number of licenses in use.

To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV of $829,339.

Streamlined Business Processes

Many of the projects business users undertook streamlined and automated business processes. RPA was especially useful in this area by automating legacy application processes. Additionally, virtual agents greatly reduced the time associated with human interactions such as sending emails back and forth looking for information. This led to time savings, which are quantified here, and it underpins many of the business outcome benefits discussed later in this study.

Evidence and data.

• Interviewees shared examples of business users’ Power Platform projects that save time for them and their colleagues:

• “An RPA solution a user built is targeted at vice presidents (VPs). Instead of having to track down information, everything is in a dashboard. A couple of hundred VPs are saving 4 or 5 hours per week.”

• An organization saved 25% of time by commissioning activities at a new facility.

• Production planners achieved a 75% reduction in time spent creating schedules.

• An organization reduced labor hours spent on customer projects by 10% by creating better project estimates, providing associates inventory pick lists, and tracking their time.

• “The biggest benefit is users creating their own reports. It cuts the wait time from a couple of months down to a simple, ad hoc creation.”

• A go-to-market team size was reduced from 20 to 10 people because of a business-developed RPA project.

• Modeling and assumptions.

  For the financial analysis, Forrester made the following assumptions based on the above examples:

• For the composite organization, the number of employees benefiting increases over time as more projects are completed with Power Platform.

• The efficiency gain increases over time as solutions become more sophisticated in terms of process efficiency maximization and automation. A big contributor to this is bringing together the four Power Platform component areas to create more impactful solutions.

• A 50% productivity capture is applied since not all time saved translates into additional work being completed.

Risks.

• Some factors that could result in this benefit being lower than interviewees reported include:

• Fewer business user projects that benefit their colleagues being undertaken.

• Focusing on solutions that do not streamline and automate business processes.

• Lower salary and benefit labor costs.

To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV of $10.2 million.

Improved Business Outcomes

Democratizing development and analytics made the interviewees’ organizations more agile and enabled people who best understand the business to directly contribute to the solutions being built. Power Platform means businesses and users can analyze, act, automate, and assist in new and innovative ways. This can deliver many business benefits including increased revenues, faster time-to-market, better customer and employee satisfaction, and lower costs.

Evidence and data.

• Interviewees shared examples of solutions they created with Power Platform and the corresponding business benefits:

• An asset tracking tool that saved $20,000 in lost tools as well as time savings.

• A mini-customer relationship management (CRM) tool to ensure proper project management oversight and cost overrun avoidance.

• A password system access reset tool used by the field force. It reduces resolution time from 30 minutes down to 2, which frees them up to do more selling.

• “We built an application to track how in-store sales associates are spending their time, and we plug that information into Power BI. The general manager says it will increase revenues by $10 million per year when rolled out to all 600 users.”

• An RPA solution to quickly integrate two marketing systems as part of an acquisition.

• Modeling and assumptions.

  For the financial analysis, Forrester made the following assumptions based on the above examples:

• For the composite organization, revenues increase beginning in Year 2 because applications, workflows, and analytics created with Power Platform reduce time-to-market, make sales teams more effective, and improve decision-making.

• Operating margins also improve beginning in Year 2 because of streamlined business operations and better analytics contributing to areas such as lower inventory costs.

Risks.

• Some factors that could result in this benefit being lower than interviewees reported include:

• The types of projects being undertaken by business users.

• Baseline revenues and operating margins.

• Industry-specific differences.

To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV of $15.8 million.

Unquantified Benefits

There are other benefits that customers experienced but were not included in the financial analysis. This can be because they underpin the quantified benefits or they are too difficult to quantify with any precision.

• Better And Faster Decision-Making.

  Many of the interviewees’ Power Platform business user projects were focused on activities such as gathering information from the field so managers could make better decisions, expand and embed the use of data in applications and workflows, and create reports and dashboards with Power BI to make data-driven decisions. All of this helped create company cultures that fully embrace the value of data, which delivers many benefits. Power BI democratizes data management and analytics since many more users can have access compared to traditional analytics solutions. This data-centric approach underpins the streamlined business processes and improved business outcomes benefits, so it is not quantified to avoid double counting.

• “Our culture is more data-driven now. VPs have their reports on iPads instead of on paper. Power BI is used for everything, and information is more up-to-date.”

• “The analytics benefit is tremendous. We’ve saved tons of time and really brought the data together in a single place with Power BI.”

• Higher Value From Other Microsoft Solutions.

  Companies are typically already using Microsoft Office or Microsoft 365 when they adopt Power Platform. Some are also using Dynamics 365. Power Platform is included to different degrees in these other licenses, and it can be used to extend the core capabilities within them. This is especially true for companies using Microsoft Teams as their workplace collaboration solution. Recently, the ability to derive more value out of these other Microsoft Solutions has been further expanded with Project Oakdale, an embedded version of Microsoft Common Data Service (CDS) that Power Platform users can natively use within Teams.

• ‘We built a mobile phone app for in-store workers using Dynamics 365 on the back-end and Power BI dashboards to track performance. It only took three weeks to build and it has helped increase sales.”

• “The value of embedding PVA into Teams is huge in terms of helping employees quickly find the information and resources they need.”

• Stronger Security And Compliance.

  Power Platform is built on and integrates with Microsoft’s security stack. This means that solutions being built by citizen developers can have proper security by default. Corporate IT can ensure that anything being published is using capabilities such as Active Directory to control access to data and resources. Additionally, when people can create their own solutions with Power Platform, they are less likely to put in place shadow IT that can bring security risks with it.

• “Data security is a lot tighter. Access permissions are carried forward into Power BI to control information access. In the past, a lot of data was extracted from the system and shared in unknown ways.”

• “Compliance is better because we have one source of truth.”

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Power Platform and later realize additional uses and business opportunities, including:

• Using additional solutions components within Power Platform not already in use by the broader organization.

• Integrating Dynamics 365 or Microsoft 365 if not already done.

• Accelerating the adoption of Power Platform by business users.

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A). None of these future benefits was included in the financial analysis.