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Conference chefs::ms-exchange

Title:Microsoft Exchange Server
Notice:
Moderator:FLASK2::SYSTEM
Created:Fri Feb 17 1995
Last Modified:Thu Jun 05 1997
Last Successful Update:Thu Jun 05 1997
Number of topics:1099
Total number of notes:5174

869.0. "Return on Investment with an Exchange Solution" by NQOS01::16.81.32.136::ATKINS (atkinss@mail.dec.com) Fri Feb 07 1997 17:40

Has anyone done a presentation to a customer or assisted a customer in backing 
up our ability to show a return on their investment if they choose Microsoft 
Exchange. 

My customer now has approval from the Directors to do a new messaging systems. 
 Now he has to go find the funds, and to do that he needs a presentation that 
will show what the ROI will be. 

Any Ideas on this?

Thanks,
Steve
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869.1NYOSS1::PAONETue Feb 11 1997 18:2121
    Steve,
    
    I have been in a similar situation.  There are two ways to approach
    this that I have seen.  The first is by playing up the central administration.  Show how
    it will reduce cost by requiring less people to support.  This is
    fairly easy, since MS has release statements along these lines that you
    could "borrow" from.
    
    The other tact, the one I prefer, is to show how the business needs are
    better met with the newer/more reliable technology.  For example,
    explain how the ease of using attachment across a standard environment
    will reduce the fax costs (a tangible savings).  Also, play up the 
    redundancy and
    multi-thread nature which should result in quicker delivery times. 
    Also, you can go into the public folders and how it allows information
    to be centrally posted quicker then say a web solution.  Its hard to go
    to deep into this without knowing the customer's needs.  But, I hope
    this might help a little.
                                                 
    Phil
    
869.2BBRDGE::LOVELLWed Feb 12 1997 01:4436
    Selling messaging solutions for 5 years, I *NEVER* saw an ROI for an
    email system.  True ROI analysis  usually produces ;
    
    (i) a discounted cash flow with an Internal Rate of Return (IRR) that
    should be greater than some nominal company financial target (e.g. IRR
    better than 15% or no company capital investment is signed off)
    
    (ii) Payback period.  Investments are favoured when payback period
    (i.e. time to +ve cashflow) is less than some nominal company limit
    like 18 months.
    
    Why do you think that an Exchange investment would achieve either of
    the above?  Maybe if you were comparing the (supposedly) higher costs
    of some other existing installation then you could work on a
    comparative basis and show a comparatively favourable return but I am
    certain that you will never be able to produce a really healthy ROI for
    Exchange or any other messaging system.
    
    When you get ROI type resistance from customers, this is a sign that
    they are either stalling you (maybe they don't understand the
    non-financial benefits) or they are being stonewalled by their own
    financial management.  You can ask the question "what is your company's
    goal for an acceptable ROI? - what was the ROI on your PABX for example?"
    
    Messaging systems are a generally accepted "cost of doing business".  
    If they want real financial analysis, give them a cost-of-ownership
    pitch and try and normalise the all-in COO per unit of business that
    they do.  e.g. "this messaging system will allow your design teams in
    Europe to work more efficiently with your Far Eastern manufacturing
    installations and worldwide warehousing.  Once the full COO is factored
    in, the costs work out to about $0.05 per design/manufacture/ship
    transaction or about $47.65 per invoiced widget-lathe"
    
    Happy selling!
    
    /Chris/
869.3ThanksNQOS01::rdodial_port16.32.81.16.in-addr.arpa::ATKINSatkinss@mail.dec.comFri Feb 14 1997 05:0818
>   When you get ROI type resistance from customers, this is a sign that
>   they are either stalling you (maybe they don't understand the
>   non-financial benefits) or they are being stonewalled by their own
>   financial management.  You can ask the question "what is your company's
>   goal for an acceptable ROI? - what was the ROI on your PABX for example?"

You nailed it. Only this time the customer in charge of the messaging study is 
trying to sell Netscape Enterprise Mail when the rest of the company is asking 
why not Exchange. I think you're right. He's being stalled or stonewalled by 
his own folks.  

Also, He's being fed some information from Netscape via their WEB page that 
they have a higher ROI then anybody else.

Thanks for responding.

Your experience has served you well. Hopefully I can learn from it and use it 
to our advantage.