What have we covered in the Total Economic Impact (TEI) of FPX CPQ series so far?
In part one, we discussed why we commissioned the study, how it was carried out, and key findings.
In part two, we looked at the FPX CPQ customer journey and the key challenges organizations faced before implementing the solution.
In part three, we reviewed how FPX CPQ helped these organizations overcome such challenges and the key results they experienced.
In this installment of the series, we dive into what Forrester uncovered when they created a composite organization from the actual customers being assessed, analyzed the real benefits and costs, and determined ROI, NPV, and payback period for the composite organization's investment.
The Composite Organization
The composite organization is representative of the three companies Forrester interviewed. It has the following characteristics:
- Is a business unit or brand within a larger conglomerate
- Delivers complex products to global customers
- Has global sales channels
- Is burdened with siloed sales processes with multiple tools in multiple regions supporting the global sales teams
- Has started some digital transformation of its CPQ processes, but there are still several manual steps as part of the process, resulting in long and inefficient sales cycles
- Sells through both direct and indirect sales channels
- Delivers $2.8 billion in annual revenue through its direct sales channel at the start of analysis
The composite organization begins its FPX implementation by conducting an analysis of sales tools and processes across regions and product lines to design a standard process that can be supported with FPX CPQ.
It then begins deployment of FPX CPQ to one region, continuing to expand to additional regions over a three-year period. The organization focuses this FPX implementation within its direct sales channel, with a future omnichannel implementation goal including indirect channels and ecommerce.
The organization initially deploys FPX CPQ to 675 users, up to 2,025 users by Year 3. By Year 3, 60% of the organization’s revenue from its direct sales channel runs through FPX CPQ.
Benefits vs. Costs
This table shows the total of all benefits across the areas listed, as well as present values (PVs) discounted at 10%. Over three years, the composite organization expects risk-adjusted total benefits to be a PV of over $50 million.
We’ll look at each of the above benefits in greater detail in future posts.
The table above shows the total of all costs across the areas listed, as well as present values (PVs) discounted at 10%. Over three years, the composite organization expects risk-adjusted total costs to be a PV of more than $12 million.
As we’ll do with benefits, we’ll also look more closely at these costs in upcoming installments of the series.
ROI, NPV & Payback Period
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization's investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
Stay tuned for future posts in the series in which we’ll break down each benefit and cost.