Microsoft commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study to assess the potential Return on Investment (ROI) that businesses can achieve through Dynamics 365 Sales. Let's delve into the study's findings.
Study Methodology
As part of the study, Forrester conducted interviews with 9 decision-makers from 6 different organizations experienced in using Dynamics 365 Sales. The experiences of the respondents were aggregated and combined into a single model organization. Both tangible and intangible benefits, as well as costs resulting from Dynamics 365 Sales implementation, were calculated. The model organization is a global company based in the United States with a value of $6 billion. It employs over 2,500 salespeople. Each salesperson handles 120 sales opportunities per year, with an average transaction value of $100,000. The organization deploys the cloud-based Enterprise version of Dynamics 365 Sales for 3,000 end users and also utilizes Power Platform solutions.
Tangible Benefits
Among the benefits that translate into financial savings, Forrester identified:
- An increasing operating profit from increased sales estimated at $51 million for the model organization. Dynamics 365 Sales led to a higher average revenue per salesperson. Salespeople work more efficiently, enabling them to pursue more sales opportunities per year. Improved sales effectiveness enhances the deal closure rate. Deeper visibility into customer needs and the company's offerings enables more productive conversations with potential customers.
- Improved salesperson productivity estimated at $13.3 million. Dynamics 365 Sales reduces the time salespeople need to prepare sales quotes for each opportunity by consolidating necessary materials and streamlining the quoting process. It also reduces time spent by salespeople on team collaboration through collaboration tools and shared data.
- Increased sales manager productivity estimated at $4.7 million. Dynamics 365 Sales replaces time-consuming manual processes. Reporting is done through interactive, visually appealing dashboards, reducing the time spent by sales managers on gathering, analyzing, and reporting sales data.
- Enhanced sales operations productivity estimated at $1.3 million. Dynamics 365 Sales enables sales teams to collaborate effectively in handling opportunities and to manage sales processes and procedures more efficiently, eliminating the need to log into different applications.
- Faster time to productivity and reduced new employee training costs estimated at $619,000. With extensive information and processes in Dynamics 365 Sales, newly hired salespeople achieve full productivity more quickly, and their managers spend less time on their training.
Intangible Benefits
The study also highlighted intangible benefits from Dynamics 365 Sales implementation, such as:
- Support for strategic corporate initiatives like digital transformation, market entry strategy changes, and cultural changes.
- Improved insight into the business situation, leading to more informed decision-making.
- Enhanced performance and greater accountability due to improved visibility into sales results and trends.
- Time freed up for higher-value activities.
- Identification of new sales opportunities within existing customer accounts.
- User-friendliness, time savings, and other benefits for end users and IT staff due to integration with other Microsoft products.
Costs of Using Dynamics 365 Sales in the Model Organization
The three-year costs for the examined model organization include:
- Microsoft fees of $11.6 million for Dynamics 365 Sales Enterprise subscription for end users.
- External firm service costs of $4.9 million for professional services.
- Internal expenses of $4.2 million for implementation, management, and support.
- User training costs of $1.8 million.
Conclusion
The study concludes that the model organization experiences benefits of $70.86 million over three years compared to costs of $22.52 million. As a result, it achieves a Net Present Value (NPV) of $48.34 million and a Return on Investment (ROI) of 215%.
Source: "The Total Economic Impact™ Of Microsoft Dynamics 365 Sales. Cost Savings And Business Benefits Enabled By Dynamics 365 Sales."
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