The Total Economic Impact™ Of Workiva Wdesk: The Benefits Of Streamlining Management Reporting At A Global Agri-Business

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Benefits and Costs

Data aggregation and roll-up savings:

Management report compilation savings:

Workiva provides a cloud-based financial and business reporting solution that helps its customers streamline reporting activities. Workiva commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Wdesk. The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Wdesk on management reporting at their organizations.

To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed a Workiva customer organization with a year of experience using Wdesk. As the fourth installment of case studies on the Wdesk product, this study focuses on the organization’s ability to improve processes and streamline management reporting with the spreadsheet feature of the solution.

Prior installments of TEI studies have highlighted linkage, collaboration, and version control benefits of using Wdesk, and these benefits continue to apply, with the spreadsheet feature having linkage capability to the cell level. Organizations looking to adopt Wdesk can expect quick deployment of the software-as-a-service (SaaS) solution, leading to improved reporting function efficiency and ultimately adding value through more accurate and timely management financial reports.

Prior to using Wdesk, the interviewed customer was using manual processes with disparate P&L spreadsheets around the world, leading to inconsistencies when information was rolled up. This ultimately led to slow management report compilations and an inefficient use of finance resources. Prior attempts yielded limited success, leaving the customer with monthly reporting that often took four to five days to aggregate, review, and finally compile. Management meetings sometimes consisted of leaders zoning in on inaccuracies of projections and citing the limited ability to act in an agile fashion to respond to business environment changes.

“With Wdesk, we’ve greatly reduced compilation work out of many hands — things like linkages and having to check against multiple non-versioncontrolled sheets as we roll up results. It’s now centralized and much more streamlined as a whole.”

—Director of accounting at global agri-business

Key Findings

Quantified benefits. The interviewed organization experienced the following risk-adjusted quantified benefits:

  • Financial reporting and roll-up on a regional and business unit level saved 136 hours per year, or 1,632 hours as a group per year, in simplification of reporting processes when using Wdesk. Working with Wdesk, the organization completed an overhaul to redesign its reporting process. This started from the aggregation points at the regional levels, then went to the review steps, and was finally completed at the corporate level. At the regional level, finance associates were able to realize a reduction in 8 hours, from a streamlined process that simplified the workflow and removed extraneous analysis steps. Emphasis had been placed on spreadsheet simplification and consolidation, along with cell-level linking and consolidated points for data entry, leading to efficiency gains. As a whole, the organization was able to save considerable time for these finance associates, equating to a PV of $210,014 over a three-year span.
  • As data became more conformal and accurate from regional business units, corporate review processes on financial matters became quicker on Wdesk, saving the organization 272 hours per full-time equivalent (FTE), or 816 hours across the group annually. With Wdesk, the organization saw improved accountability and, in turn, accuracy and better reporting. Reviewers tasked with checking validity and accuracy received full downward visibility, enabling a much more expedient review process. Total three-year PV savings were $175,329.
  • As data files became more consolidated and linked, compilation of management reports was a much easier process for financial managers at the corporate level, saving an average of 48 hours per reporting event. Data inputs became consolidated centrally and more organized, without fear of the version control issues that the organization had experienced previously. Report compilers could then leverage these centralized and linked data sheets to accelerate the compilation process. Total savings of the benefit were $292,215, PV, over three years.

Unquantified benefits. The interviewed organization experienced the following benefit, which is not quantified for this study:

  • One unquantified benefit of working with financial data in Wdesk is easily translatable to other reporting functions, such as SEC reporting and regulatory reporting at the firm’s parent organization. Similar to the time reductions experienced by the interviewed organization’s regional-level reporting, the process to roll up linked and accurate data would be simpler to ingest at the umbrella organization level. These benefits are assumed to be outside of the subsidiary level. Therefore, they have not been counted, but they can be important for potential adopters that have multiple layers of business structures and/or perform SEC, regulatory, and other types of reporting that require substantial financial data inputs.

Costs. The interviewed organization experienced the following risk-adjusted costs:

  • Wdesk SaaS licenses and support costs were factored in for three years, leading to a PV cost of $103,385. The organization experienced costs of roughly $41,000 per year, calculated at list pricing, accounting for 10% Wdesk user growth per annum.
  • Internal training costs for Wdesk users were $23,514, PV. As new users were brought to the Wdesk platform, the organization assumed internal costs to train the finance associates to work with the new linkage and collaboration functionalities. The majority of these costs were assumed in the initial deployment phase, observed at 30 hours per employee.
  • Workflow and template buildouts were required to fully leverage the Wdesk platform, resulting in a cost of $58,128. The financial reporting manager who brought Wdesk to the organization reengineered multiple reporting processes and worksheets to best leverage Wdesk. Additional professional services and consulting were introduced in the initial year, to accelerate adoption and implementation efforts.

Forrester’s interview with an existing customer and subsequent financial analysis found that the interviewed organization experienced benefits of $677,558 over three years versus costs of $185,027, adding up to a net present value (NPV) of $492,531 and an ROI of 266%.

From the information provided in the interview, Forrester has constructed a Total Economic Impact™ (TEI) framework for those organizations considering implementing Workiva Wdesk.

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 Workiva Wdesk can have on an organization:

  • DUE DILIGENCE Interviewed Workiva stakeholders and Forrester analysts to gather data relative to Wdesk.
  • CUSTOMER INTERVIEW Interviewed one organization using Wdesk to obtain data with respect to costs, benefits, and risks.
  • FINANCIAL MODEL FRAMEWORK Constructed a financial model representative of the interview using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewed organization.
  • CASE STUDY Employed four fundamental elements of TEI in modeling the impact of Workiva Wdesk: benefits, costs, flexibility, and risks. Given the increasing sophistication that enterprises have regarding ROI analyses related to IT investments, Forrester’s TEI methodology serves to provide a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.

The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.


Readers should be aware of the following:

  • This study is commissioned by Workiva 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 report to determine the appropriateness of an investment in Workiva Wdesk.
  • Workiva 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.
  • Workiva provided the customer name for the interview but did not participate in the interview.

Interviewed Organization

For this study, Forrester conducted one interview with a Workiva Wdesk customer:

  • This is a multinational agri-business, operating in 12 separate legal entities in various regions around the world.
  • It is a wholly owned subsidiary of a larger organization and delivers consolidated financial data for the parent company to report to the appropriate regulatory bodies.
  • This study focuses solely on P&L-based management reporting at the subsidiary level.
  • Regional operations have individual finance teams that report to the subsidiary headquarters.
  • Fifteen FTEs are involved in the financial and management reporting process, with a mix of associates and managers (which is parsed out in the benefit calculations).

Key Challenges

In the years leading up to the decision to adopt Wdesk, the interviewed organization produced management reporting using Excel-based spreadsheets that was slow and cumbersome to roll up into consolidated statements. Files were passed among financial reporting individuals via asynchronous email communications, often leading to unnecessary delays. Version control was difficult as well, with limited visibility for global team members who needed to understand when and where their inputs were necessary. The review and compilation processes were difficult, with linkages to numerous files from different owners. The entire reporting process was in need of revitalization so that the organization could make more rapid business-level decisions.

  • Asynchronous email communication slowed down the data aggregation process. However, without a centralized way to consolidate data, it was the only choice to provide regional-level data. A tremendous opportunity existed to consolidate and rationalize the data submission process. File-based linkages would sometimes break, due to the existence of multiple files from multiple locations. Communication to sort out what was relevant and what was not compounded the issues with extended wait times from various regional stakeholders.
  • A lack of version control caused unnecessary work in the wrong files, making accuracy an issue. When reports were rolled up to the management level, “people at our meetings would stand up and say things like, ‘That doesn’t look right. That’s not the number I turned in,’” said the director of accounting. It wasn’t a case of who to blame; rather, the issue was the process and the tool used to consolidate the data. An undue amount of time was lost to this revisionary work as a result.
  • The business was not only unable to make timely tactical decisions, but it didn’t trust the data being presented. In addition to the slow and complicated process to receive management reports, the information eventually provided to management needed to be scrutinized. Because of prior errors, insights generated were taken with a grain of salt, and the finance team’s credibility was diminished.

“In the old world, we were spending several days or a week compiling data making sure everything tied together and was accurate, which isn’t the case now.”

—Director of accounting

“Before, our reporting was at times inaccurate. When it came time to do financial reviews, people at our meetings would stand up and say things like, ‘That doesn’t look right. That’s not the number I turned in.’”

—Director of accounting

Solution Approach

The interviewed organization searched for a solution that could mitigate the above challenges and shortcomings. In addition, it hoped that the solution could be leveraged to introduce a level of accountability and traceability for financial roll-up to its parent organization, proactively making future tasks such as auditing a smoother procedure.

Once it chose Workiva, the organization took the following steps to shore up its reporting processes. The organization:

  • Used Workiva consulting services during the initial deployment and first year for assistance on the reconstruction of the processes.
  • Built new workflows and spreadsheet templates that better leveraged Wdesk.
  • Provided training to reporting individuals globally, totaling 15 users.
  • Put the solution into production approximately six months after the initial green light.

Key Results

The interview revealed that key results from the Wdesk investment include:

  • The consolidated platform improved operations and collaboration, with reduced work across the board. With new workflows and templates, ambiguity was removed in terms of what data was needed at what time, removing individuals from doing additive analysis work that was not necessary. With the improved visibility into change and input trails, managers could easily determine the accuracy of data received. Compilation was streamlined, as linkages at the cell level were simple to handle without a multitude of files.
  • The IT department approved of the Wdesk SaaS solution, as there was little to implement and test. Wdesk had been deployed by a significant portion of the Fortune 500, signifying that it had passed the stress tests of large enterprises. The director of accounting noted that it had passed tests at the parent organization level and deemed it a secure solution. The IT team was happy, too. There was little for the team to implement across the network, as Wdesk operated in the cloud. Ongoing operational expenditure associated with management and patching of the solution was completely avoided.
  • Finger-pointing was reduced, as visibility and accountability increased with Wdesk. Version-controlled input logging was a key feature that detailed to reporting managers exactly who had made a change and at what point. Individuals were now able to see where they were in the process chain, eliminating the need for the wait-and-see game of emails. Errors were drastically reduced, leading to more credible reports.
  • The velocity of reporting increased greatly, making the organization more capable of adjusting to market conditions. Being able to price products appropriately and increase its response capability to rapidly changing currency fluctuations was of paramount importance to the organization. With Wdesk, it was able to do this with increased velocity and consistency.

“Before we went with Wdesk, we would consolidate on a Tuesday and have something ready in four business days. Now we’re getting these consolidated packets to management across the world in a single day.”

—Director of accounting

“We used to spend all kinds of time consolidating the various data coming in from different individuals and sources via email. Things stayed in Excel sheets — causing all sorts of disconformity and linkage issues.”

—Director of accounting

Quantified Benefit and Cost Data

The table above shows the total of all benefits across the areas listed below, as well as present values (PVs) discounted at 10%. Over three years, the interviewed organization expects risk-adjusted total benefits to be a PV of $677,558.

Efficiency Gains At Regional Aggregation Level

Using Wdesk and newly implemented workflows, the organization delivered a simple and streamlined collection strategy for data input. Regional finance personnel had to perform less varied analysis and delivered accurate information for the corporate level to consume and organize. As an example of better reporting accuracy, the interviewee stated: “Having locations in so many different countries presented a currency nightmare for us. Now that we’ve centralized the consolidation process, we don’t have decimal placement issues that can make a huge impact on our financials.”

  • Analysis variability was reduced on the regional level in rolling up data.
  • Accuracy was improved, as cell and file linkages were able to be rolled up in a consolidated format. Fewer files were necessary to reach the numbers that corporate reporting individuals required.

The result of the simplification netted the following results for the regional finance personnel:

  • The process for data input reduced regional aggregation and reporting by upwards of 8 hours per FTE per reporting event.
  • Reporting events occurred at monthly intervals — feeding into monthly, quarterly, and annual reports — for a total of 17 events yearly.
  • Using the above data points, data aggregation individuals saved an estimated 136 hours per year.
  • Finance FTEs are assumed to have a yearly compensation of $80,000, with an additional 1.2x multiplier incorporated for net employee benefits, bonuses, and vacation.

“Timeliness and accuracy — those are the two words I’d use to describe what Wdesk has brought.”

—Director of accounting

Given the assumptions and the drivers of the savings, the derived savings over a three-year timeframe are $210,014 in PV terms.

More importantly, these finance professionals were empowered to use their new free time on other value-add analyses to better calibrate regional-level adjustments and improve overall operating margins. Said the director of accounting: “I’m now able to focus peoples’ attention on more important things because we were so caught up on doing extraneous busy work previously that we couldn’t dive in real value-adds like helping drive results as business partners.

Impact risk is the risk that the business or technology needs of the organization may not be met by the investment, resulting in lower overall total benefits. The greater the uncertainty, the wider the potential range of outcomes for benefit estimates.

Efficiency Gains At Headquarter-Level Reviews

Further along in the reporting process, the corporate review process was also simplified for the organization. A key driver to enable this efficiency in reviews was the ability to have relevant and consolidated data that was simple to trace. As with the aggregation process, a consolidated source of information that provided change visibility and aligned conformal data not only reduced review cycles for the work reviewers but also avoided executive-level reviews that were necessary when errors were more commonplace prior to Wdesk. Individually, the finance managers responsible for reviews saved 16 hours per reporting event — with perhaps even greater gains for yearly and quarterly reports, as they could easily trace back to the monthly data.

For the interviewed organization, Forrester assumes that:

  • Finance managers have an effective base compensation of $120,000 annually, with a benefits modifier of 1.2x.
  • Prior erroneous reports occurred at a rate of 10%, which required executives to review an extra one to two reports per year.

The total PV of this benefit for reviewers at the corporate level for three years is $175,329.

Efficiency gains at regional aggregation level: 31% of total benefits

Management Report Compilation Savings

As the final step to the management reporting life cycle, the interviewed organization compiled aggregated data for executive reviews. As these reviews are mainly P&L based, the results were often the basis for pricing adjustments, strategy formation, and budgeting purposes. Key metrics observed for this step include:

  • The reduction of compilation time was driven by improved linkages, accuracy, and file centralization, accounting for some 48 hours saved by compilers on each reporting event.
  • As the compilation times were reduced, this produced a consistency and improved cadence to the delivery of reporting material.
  • Wdesk as a comprehensive solution allowed charting to be easily translated (and linked) to the final outputs within the solution.

At this level, with a single compiler growing to two following a year of deployment, the company should see a gain of $117,504 per year, or a three-year PV gain of $292,215.

Management report compilation savings: 48% of total benefits

Unquantified Benefits

The interviewed organization is a subsidiary of a larger organization that does SEC, managerial, and regulatory reporting. With the addition of accuracy and traceability at the lower levels, these inputs increased the value at the point of data roll-up to the parent organization. While this is an important value, we’ve excluded it from our quantitative analysis, as this is a benefit that is assumed by the parent organization.

Additionally, with the complex entity structure of the organization, future M&A activity involving new subsidiaries and organization-level changes will be easily folded into the Wdesk reporting workflows.


The value of flexibility is clearly unique to each customer, and the measure of its value varies from organization to organization. There are multiple scenarios in which a customer might choose to implement Wdesk and later realize additional uses and business opportunities, including:

  • As an option, the organization has the ability to leverage data consolidated in Wdesk for alternative reporting types. In prior case studies performed on organizations that have adopted Wdesk, customers indicated the ability to do more than management reporting with Wdesk. One example is the production of sustainability reports — which readily leverages Wdesk functionality, given that metrics relating to sustainability can be easily incorporated at the aggregation level and compiled for external-facing consumption.
  • Regional expansion, whether through acquisitions or organic expansion growth, will likely assume the same benefits as current regional-level reporting. With newly improved process flows, future expansion will result in savings similar to those currently experienced globally. For expanding organizations, the one-time implementation of Wdesk scales with only marginally increasing costs.

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

Flexibility, as defined by TEI, represents an investment in additional capacity or capability that could be turned into business benefit for a future additional investment. This provides an organization with the "right" or the ability to engage in future initiatives but not the obligation to do so.

Wdesk Seat Licenses And Support Plan

Wdesk is a SaaS solution that charges based on user licenses for specific tasks. Using list prices and the specific user mix that the interviewed organization maintained, we estimate the cost of the Wdesk implementation to be $103,385 in PV terms over three years. Support is a necessary cost calculated at 20% of license costs. Service, however, is not necessary, as everything operates on the Workiva cloud infrastructure.

It is important to note that the prices reflected are list prices and incorporate a 10% growth in the user base over the period of analysis.

The table above shows the total of all costs across the areas listed below, as well as present values (PVs) discounted at 10%. Over three years, the interviewed organization expects risk-adjusted total costs to be a PV of $185,027.

Internal Training Costs

To best leverage the system, the interviewed organization allotted 30 hours per finance reporting individual who was to be migrated to Wdesk. These individuals spent this time prior to production deployment and are assessed as part of the initial costs of implementation. Additional users were added in years 2 and 3, and similar training times were allotted. The interviewee said that while Wdesk is similar in many ways to traditional office productivity tools, it was also different, especially with linkages. To have his staff really leverage the linking capabilities required an adjustment period that has also been reflected in the training times.

Following three years of deployment, the expected PV cost of internal training is estimated to be $23,514. Additional costs of external training are provided in the next cost category.

Workflow And Template Buildout Costs

Our interview with the customer organization revealed that new workflow buildouts and template creation were paramount to its success with Wdesk. To take advantage of Wdesk capabilities, the organization completely re-engineered its workflow structure, from aggregation to reviews to compilation. External costs for these developments were borne in the form of Workiva consulting services. Workiva helped with the workflows and then helped train employees, which cost $42,000 across the initial deployment and later during the first year of use.

Internal time dedicated to workflow, process, and template creation is estimated at 260 hours, billed at the finance FTE rate listed in the table below. The total costs to finalize this step were $52,844, with the majority accrued prior to production deployment.

The interviewed organization had a complex international structure, operating with multiple legal entities stretched across many countries. Some organizations that approach this solution may have additional concerns on financial roll-up that are associated with country- or regional-level regulations and market anomalies. Due to this, Forrester has adjusted the cost of this category upward with what we call implementation risk — reflecting a new three-year cost potential of $58,128.

For those organizations that are potentially investigating the Workiva solution, the operating premise is that workflow and process development are necessary even without regional roll-ups. However, smaller organizations will still realize a benefit and potentially be able to lower this cost due to simpler organizational structures.

As with many solutions, workflows should be reengineered to maximize efficiency gains. The interviewed organization spent approximately three months to build out the processes and incrementally more time for training.

Implementation risk is the risk that a proposed investment may deviate from the original or expected requirements, resulting in higher costs than anticipated. The greater the uncertainty, the wider the potential range of outcomes for cost estimates.

Consolidated Three-Year Risk-Adjusted Metrics

The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the interviewed 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.

The following information is provided by Workiva. Forrester has not validated any claims and does not endorse Workiva or its offerings.

Save time, reduce risk, make better decisions

Organizations are constantly challenged to provide greater performance on shorter timelines—often with thesame or fewer resources. This is not a trend. This is the new norm. Finance, accounting, compliance, operations, and other functions must find applications and processes to meet these new challenges. The aging systems most departments use fall short. People need better solutions. Wdesk is the alternative to inefficient legacy systems. It is a cloud solution for collaborative work management. The platform is proven to increase productivity and drive better decision-making for more than 2,700 organizations worldwide.

Make better decisions, faster

Users have access to a single source of truth. When something changes, everyone knows—reducing the risk of incorrect information. Time previously used to check facts can be spent on analysis and other valuable activities.

Be more confident in your data

Data is always controlled and consistent. Audit trails inform you where data came from, who handled it, and where else it has been used. When you use information from Wdesk, you can be certain you have the right answers.

Work together with purpose

No matter how complex a process is or how much data you have, Wdesk makes it easier to control. It is accessible anywhere, and users get routine cloud delivery of new features and functionality. The Wdesk platform drives a powerful range of features.

Flexible data management

Data that exists outside of Wdesk, whether structured or unstructured, is easily brought into the platform. This creates a single source of truth for users. They can use and reuse that information, providing a consistent story across all of the work in Wdesk.

Intuitive, familiar interface

Wdesk is easy to use—any level of user can begin working without special training. The platform powers documents, workbooks, presentations, dashboards, and other familiar content types.

Collaboration at scale

Wdesk drives collaboration whether in small teams or enterprise wide initiatives. Set controls so each user can access as much or as little information as needed.

Workflow and tasking

Users configure step-by-step workflows for processes in Wdesk. Tasking features let users assign approvals, reviews, requests, and other functions. Wdesk makes it easy to get work done on deadline.

Data consistency

Data within Wdesk, whether native or imported, is connected across the platform. When changes occur, users can trust that numbers and narrative are automatically updated without manual work.

History and audit trail

A history trail is automatically created and saved any time a change is shared in Wdesk. Everything that happens in Wdesk leaves a record. Whether it's an update to a single cell or major changes to a project, you know what's happening.

Version control

Everyone has access to the latest version. Wdesk eliminates check-out systems, email trails, and handwritten notes. Simultaneous, controlled collaboration means everyone has the right information.

People, groups, and security

A single platform means processes and content coexist. Set access and permissions, so users see as much or as little as needed. Security can scale to accommodate the needs of small teams or the demands of full enterprises.

Always accessible

Wdesk is a cloud platform—it is accessible anywhere you have an internet connection. Whether you're on a laptop, tablet, or mobile phone, you have access to the information you need. Users fit work into their lives, instead of fitting their lives around work.

How do organizations use Wdesk?

Wdesk is used across the enterprise to support hundreds of reporting, compliance, and collaborative work management processes.

Finance and accounting
  • Performance reporting
  • Budget, planning, and forecasting
  • Financial reporting
Audit and controls
  • SOX compliance
  • Internal controls management
  • Audit management
Risk and compliance
  • SEC and SEDAR reporting
  • Investor relations
  • Risk Management
Build your own
  • Create your own solution built on the flexible Wdesk platform
  • Connect Wdesk with other service providers from our partner program

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

  • 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.
  • 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.
  • 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.
  • 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.”
  • 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.
  • 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.
  • RETURN ON INVESTMENT (ROI) - A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs.
  • 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%.
  • 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 that 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: Supplemental Material

Related Forrester Research
“TechRadar: Risk Management, Q4 2015,” Forrester Research, Inc., December 1, 2015
“The Forrester Wave™: Enterprise Performance Management, Q4 2016,” Forrester Research, Inc. October 6, 2016