For Business Process & Applications Professionals (Length: 21 pages)

May 16, 2008

The ROI Of Packaged Apps Instance Consolidation

A Total Economic Impact™ Analysis Validates Urgency For Instance Reduction

This is the fifth document in the "Building A Long-Term Apps Strategy" series.

by R "Ray" Wang

with Sharyn Leaver, Chip Gliedman, Jon Erickson, Meghan Donnelly


Executive Summary (This is a document excerpt)

Common goals like improving integration among existing applications, upgrading packaged applications, and shifting to a business process orientation are pushing enterprises with multiple apps instances to reassess lingering consolidation opportunities. Organizations that embark on instance consolidation will likely see benefits in annual revenue uplift, operational efficiencies, regulatory compliance, and business/IT alignment that need to be balanced against the costs in license fees, annual maintenance, training, support, and testing. A Total Economic Impact™ (TEI) analysis shows that a reduction from three instances to one is likely to produce a significant return on investment (ROI) of 133.32% over 10 years, while consolidations from 10 instances to one can produce a staggering ROI of up to 379.91%. Business process and applications professionals can use Forrester's TEI methodology and values as a starting point to model the specific characteristics of their organization and a customized analysis of expected returns.

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TABLE OF CONTENTS

NOTES & RESOURCES

itemFirms Face Tremendous Pressures To Improve Packaged Apps Delivery

itemFour Factors Determine The ROI Of Packaged Apps Instance Consolidation

itemCalculating ROI For Packaged Apps Instance Consolidation

itemTen To One Delivers Exponential Savings; Three To One Delivers Strong ROI

recommendations

itemAdd Instance Consolidation To Your Long-Term Packaged Apps Strategy

itemSupplemental Material

Forrester interviewed 93 vendors and users who have undergone instance consolidation efforts between 2005 and 2008. Sample scenarios have been created based on common traits and results. Forrester analyzed this sample company using our TEI methodology, which provides a holistic view of the decision by including an analysis of costs, benefits, flexibility, and risk.

Related Research Documents

itemWhy You Need A Long-Term Apps Strategy

November 27, 2007

itemBe Not Afraid Of ERP Instance Consolidation

February 7, 2007

itemThe Financial Impact Of Packaged Applications

July 11, 2006

Find Documents In Related Categories

This document falls under the following categories. Click on a link below to find similar documents.

Technology: Application Strategy & Selection, IT Spending & Budgeting, Packaged Applications, Sourcing & Procurement, Sourcing Strategy & Execution, Total Economic Impact™
Special Feature: Models
Geography: Asia Pacific, Europe, North America