A Forrester Total Economic ImpactTM Study
Commissioned By Microsoft
January 2020

Microsoft 365 Cloud Voice Improves Employee And
Company Performance

Forrester Consulting conducted a Total Economic Impact™ (TEI) study to provide readerswith a framework to evaluate the potential financial impact of Microsoft 365 Cloud Voice on
their organizations, hereafter referred to as Cloud Voice. To better understand the benefits,costs, and risks associated with this investment, Forrester interviewed several customers
with experience using Cloud Voice.
Through these customer interviews and data aggregation, Forrester concluded that Cloud
Voice has the following three-year financial impact: $9.5M in benefits versus costs of$2.6M, resulting in a net present value (NPV) of $6.9M and an ROI of 261%.
Quantified benefits. The following risk-adjusted quantified benefits are representative of
those experienced by the companies interviewed and applied to a composite organization
with 5,000 users:› Employees save time from telephony being integrated into the Microsoft Teams
collaboration platform. Highly mobile workers, including those moving around within an
office, can save 1.5 hours per week from better access to voice calling. Other workers
save 38 minutes per week from improved call quality and system performance. The
savings over three years for the composite organization totals $6.4 million.
› Improved and integrated voice communication strengthens business outcomes.
Cloud Voice connects employees internally as well as with customers and other external
parties. This can help increase sales, reduce time-to-market, and improve decision
making. Forrester partly attributes (5%) an additional $5 million in sales in Years 2 and 3
to better voice communication internally and with prospects. The attributed value totals$335,274.
› Organizations replace previous telephony solutions with Cloud Voice, which
eliminates solution and support costs. Reduced costs for the previous telephonysolutions include PBX annual maintenance and support, replacing end-of-life equipment,
hardware for new offices, and IT support. The savings over three years totals $1.8 million.
› Telecommunication usage costs are also reduced. Reduced costs include international
mobile roaming and long-distance calling charges. The savings over three years totals$1.0 million.
Unquantified benefits. The interviewed organizations experienced the following
benefits, which are not quantified for this study:› Cloud Voice improves security and compliance. Examples of easier complianceinclude ISO 270001, GDPR, and security-related compliance because Cloud Voice is tied
into Microsoft’s security and access solutions.
› Cloud Voice has better uptime and performance than previous solutions and iseasily scalable. Interviewees reported that they had outages and performance problems
with previous telephony solutions. More importantly, Cloud Voice easily scales with thebusiness compared to on-premises solutions.
› Cloud Voice, as part of Teams, improves employee satisfaction. Employees likehaving a modern collaboration experience with telephony as part of a unified solution.
This is especially important for younger employees.

METHODOLOGY
The objective of the TEI
framework is to identify the cost,benefit, flexibility, and risk factorsthat affect the investment
decision. Forrester took amultistep approach to evaluate
the impact of Microsoft 365 Cloud
Voice, including interviews with
Forrester analysts, Microsoft
stakeholders, and three current
Microsoft 365 Cloud Voicecustomers. Forrester constructeda financial model representative of
the interviews using the TEI
methodology.
COMPOSITE ORGANIZATIONThis analysis uses a composite
organization, based on theinterviewees, to present theaggregate financial analysis.
RISK ADJUSTMENT
Forrester risk-adjusted thefinancial model based on issues
and concerns of the interviewed
organizations to account for
uncertainties in benefit and costestimates.

“We wanted all of ourcollaboration solutions,
including voice, to beconsistent andintegrated. Microsoft was
the only real solution out
there.”– Chief municipal officer,
government

ROI
261%

Benefits PV$9.5 million

Costs PV
$2.6 million

Payback (after go-live)<3 months

The Microsoft 365 Cloud Voice Customer Journey
For this study, Forrester conducted four interviews with Cloud Voice customers.
Interviewed customers include the following:
INDUSTRYREGIONINTERVIEWEENUMBER OF USERS

Video solutions

Headquartered in EMEA

Senior systems administrator

500

Government

Europe-Chief municipal executive
-CIO

1,700

Beverage

GlobalArchitect

7,000 (expanding to 20,000+)

Key Investment Drivers And Results
The interviewed organizations shared the following investment drivers:› Prior telephony solutions provided limited capabilities at too high a cost andeffort. Interviewees had either on-premises traditional PBX solutions or IP telephonysolutions. In both cases, Cloud Voice was said to be both easier to manage andexpand in order to support more users and a global presence.
› Companies wanted an end-to-end modern collaboration experience that
included voice. In a drive to be more competitive, companies were looking to
improve collaboration within and outside the company. Adding Cloud Voice was a
logical next step for companies that had previously implemented Teams.

“The main driver was
modernizing the workplace
to improve user
productivity. We wanted
everything, including voice,in one place and to give
users something theywould really like.”– Architect, beverage

The interviewed organizations achieved key investment results:› Employee and company performance has improved by integrating a better
telephony solution into other collaboration solutions. Cloud Voice provides awide range of features to support different users’ communication methods. Newfeatures can easily be rolled out because everything is cloud based. Additionally, theintegration with Microsoft Teams makes it easier for users to collaborate andseamlessly switch between computers, softphones, mobile phones, tablets, andmeeting rooms.
› Total cost of ownership (TCO) has decreased. Prior telephony solutions cost more
to maintain and upgrade, and the amount of required administration, both internallyand from consultants, is greater. Cloud Voice eliminates the need for IT resources
with specialized telephony-infrastructure skills and/or outsourcing contracts.
› Employees are happier. Employees of all ages enjoy the greater flexibility andmobility that Cloud Voice has given them. This has opened up work-from-homebusiness models and made employees more efficient and effective.

2 | The Total Economic Impact Of Microsoft 365 Cloud Voice“We had to replace the old
PBX system. Replacing itwith Cloud Voice as part ofTeams maximized voice
and video adoption andreduced costs. Adding
phone systems ensured as
many users as possible
and made them moreproductive.”– CIO, government

Composite Organization
Based on the interviews, Forrester constructed a TEI framework, a composite
company, and an ROI analysis that illustrates the areas financially affected. The
composite organization has the following characteristics:
The composite organization is based in Europe and sells its solutions globally.
Forrester holds the 5,000-user count constant for the life of the study for simplicity;users are a mix of information workers and firstline workers. There are three main
operations centers — one each in Europe, North America, and Asia — and small sales
offices are regularly being added. The prior telephony solutions were a mix of onpremises IP and traditional PBX telephony systems, which were nearing end of life andcould not support growth. Some locations were migrating from Skype for Business
Server to Cloud Voice in Teams.
The composite organization had previously adopted Office 365 and Microsoft Teams
and added Cloud Voice. Components included Phone System, Audio Conferencing,Direct Routing, and Teams-certified devices.

Microsoft 365 Cloud Voice Improves Collaboration
Improving communication and collaboration between employees and with outside
parties is a top priority for companies. Increased competition, compacted timeframes,
and distributed business models mean that everyone needs to be more efficient andeffective if the company is to succeed truly. Telephony capabilities have never quite
been able to integrate fully into other collaboration solutions, i.e., with telephony being
the outlier in this paradigm shift, the challenge has continued to be that it lacks theflexibility to change and expand as the business needs evolve.
Cloud Voice provides the flexibility and scalability that companies need in order tointroduce new features and support expansion in a cost-effective way. It also saves
workers time and gives them tools to improve business outcomes such as faster timeto-market, increased revenues, and improved operations.
The benefit impact experienced by the composite organization is based on past andcurrent experiences of the interviewed companies. Over three years, the composite
organization expects risk-adjusted total benefits to be a present value of $9.5 million.

“As an IT person with many
years of experience, I cansay that the phone systeminfrastructure within Teamsis one of the bestexperiences I’ve ever had.
Also, knowing a company
the size of Microsoft has
your back and is there foryou is great.”– Sr. system administrator,
video

Total BenefitsREF.

BENEFITYEAR 1YEAR 2

YEAR 3TOTAL

PRESENT
VALUE

Atr

Improved communication$1,562,975$3,125,949$3,125,949$7,814,873$6,352,887

Btr

Improved business outcomes$0$212,500$212,500$425,000$335,274

Ctr

Eliminated solution costs$722,700$745,200$749,700$2,217,600$1,836,128

Dtr

Reduced telecom costs$308,750$403,750$522,500$1,235,000$1,006,921

Total benefits (risk-adjusted)$2,594,425$4,487,399$4,610,649$11,692,473$9,531,210› Better voice communication saves time, increases collaboration, and improvesmobility. Time savings are included in the financial analysis. Interviewees shared
examples of how different workers save time from Cloud Voice being part of an
integrated collaboration solution. It was estimated that information workers who movearound a lot, either between offices or within a single office, can save up to 3 hours
per week. A previously commissioned TEI study looking at the value of Microsoft
Teams found that improved call quality saves time from having to redial calls or follow
up because information was not heard properly. For the financial analysis, Forrester

3 | The Total Economic Impact Of Microsoft 365 Cloud Voiceincludes 1.5 hours of savings per week for 10% of the users; the remainder save 7.6
minutes per day because of improved call quality. Only half of the benefit is realizedin Year 1 as users become more familiar with the solutions. After applying a 50%
productivity capture, this adds up to a net benefit of $6.4 million.
› More effective voice communication as part of an integrated collaboration
solution improves business outcomes, such as increased revenues anddecreased time-to-market. Effective communication makes for better and stronger
businesses. Interviewees shared many examples of how business outcomes canimprove. These include closing more deals, bringing new products to market faster,
reducing operating costs, and streamlining operations. One interviewee shared an
example of a new multimillion-dollar contract, which required a global support help
desk. The company’s previous telephony solutions could not support thisrequirement, and it would not have won the contract without Cloud Voice being inplace. The financial analysis includes $5,000,000 in additional sales in Years 2 and 3
and conservatively attributes 5% of this to improved voice communication. This adds
up to a net benefit of about $335,274. In reality, improved business outcomes areworth much more to an organization; think about ways your organization can benefit
from enhanced and integrated voice solutions.
› Eliminating previous telephony solutions partially or fully offsets the cost of
Cloud Voice. Interviewed companies replaced a range of solutions from traditional
PBXs to other cloud-based VOIP solutions. Replacing them eliminates $250,000 per
year in maintenance, support, and licenses. Thirteen small sales offices are opened
over the life of the study that no longer need to have telephony hardware added.
Additionally, four FTEs previously supported telephony solutions globally. This is cut
in half. These savings add up to a net benefit of $1.8 million.
› Individual user telephony costs are also reduced. Eliminated costs include$350,000 in international mobile roaming costs over three years and $950,000 less ininternal, long-distance calling. Forrester attributes this to placing and connecting callsthat are connected via the Cloud Voice network rather than through the telecom
provider’s direct routing solution. These savings add up to a preset value net benefitof $1.0 million.
› Cloud Voice improves security and compliance. Interviewees said that switching to
Cloud Voice improved security and helped with internal and external compliance because
it is built on top of Microsoft’s security solutions. One interviewee said, “Voice uses Office
365 cloud security, which is a big deal.” Security was not a primary driver for moving to
Cloud Voice but was still viewed as important. With regards to compliance, interviewees
said that GDPR, ISO 270001, and internal requirements were easier to meet. Improved
security and compliance were not included in the financial analysis.
› Cloud Voice provides better uptime, performance, and scalability than the previous
solutions. Moving to Microsoft’s cloud-based solutions resulted in better performanceand uptime. Interviewees were especially focused on scalability and flexibility. One
interviewee pointed out that “the level of scalability needed was not possible with an onprem solution.” Voice disruptions can have serious downtime costs for an organization,
but they were not included in the financial analysis.
› Cloud Voice, as part of Teams, improves employee satisfaction. Providing modern
collaboration solutions and everything in one platform makes things easier for employees
and improves satisfaction. Avoiding using personal mobile phone numbers helps with“life-work balance.” One interviewee surveyed employees about their satisfaction withinternal collaboration tools. Prior to Teams with Cloud Voice, only 15% of employees
reported being very happy. This increased to 85% after the deployment. The ability tomake calls from the mobile app was a large contributor. These benefits were not includedin the financial analysis.

“Employees save time
because everything is in
one place. It is a lot easier
to make calls and findcolleagues. People likeme who have lots of calls
and move around a lot
can save around 3 hours
per week. That’s about[15% of the workforce].”– Chief municipal executive,
government“Cloud Voice with Teams isvery powerful. It also ties
in with Power BI and thePower Apps platform,
which helps people makebetter decisions faster.
We are now using voicestrategically.”– Chief municipal executive,
government services“The ability to use actual
landline numbers on topof the VOIP infrastructure
makes voice a real
strategic asset for us, notjust a tool.”– Sr. system administrator,
video“We wouldn’t haveconsidered rolling out the
on-prem voice solution to
everyone. Deploying at
our headquarters alone
would have taken six
months. With [Cloud
Voice], once you have thenumbers, you can set it up
in a day.”– Architect, beverage

4 | The Total Economic Impact Of Microsoft 365 Cloud VoiceInternal And External Cloud Voice Costs
The composite organization experienced five categories of cost associated with the
Cloud Voice investment. Over three years, the composite organization expects riskadjusted total costs to be a PV of $2.6 million.

Total Costs
REF.

COST

INITIAL

YEAR 1YEAR 2

YEAR 3TOTAL

PRESENT
VALUE

Etr

Microsoft Voice solution costs$0$480,000$480,000$480,000$1,440,000$1,193,689

FtrInternal effort$123,750$288,750$288,750$288,750$990,000$841,829

Gtr

Professional services$131,250$52,500$52,500$52,500$288,750$261,810

Htr

Training$117,893$11,239$11,239$11,239$151,610$145,843

Itr

Increased bandwidth$0$78,750$78,750$78,750$236,250$195,840

Total costs (risk-adjusted)$372,893$911,239$911,239$911,239$3,106,610$2,639,011› Cloud Voice license costs $1.2 million. Forrester assumes that all 5,000 users
have E3 licenses. The US list price for Phone System is an additional $8 per user per
month. If a user has an E5 license, Phone System is included.
› Internal effort costs $765,299. A proof of concept (PoC) lasted six weeks andrequired 1.5 FTEs. The global rollout lasted 12 weeks and required three FTEs.
There is one week of effort in each subsequent year to make Cloud Voice available
to new sales offices opening around the world. Forrester also conservatively
estimates that there are two FTEs responsible for supporting Cloud Voice globallyeven though some interviewees said that they required no additional effort compared
to Teams support.
› Professional services during deployment and ongoing support cost $261,810.
Services during implementation were mainly around integrating into various telecom
providers direct routing solutions and providing training. Ongoing services are aroundmanaging these connections as well as rolling out new features.
› Training for users and IT costs $145,843 in lost work time. Each end user
requires, on average, 30 minutes of training — everyone initially plus new hires insubsequent years. Two IT resources received five days of training.
› Increased bandwidth costs $195,840. Bandwidth had previously been added tosupport the move to Office 365 and Teams. Additional bandwidth is added to support
increased VOIP traffic globally.

A Cloud Voice Investment Today Can Create Future Opportunities
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 acustomer might choose to implement Cloud Voice and later realize additional uses andbusiness opportunities. Interviewees shared the following examples:› “We are following Microsoft’s roadmap and rolling out new features. One we are
excited about is call queues.”› Expanding into new geographies and the number of users. One company is rollingout to operating companies globally and should grow from 7,000 to 20,000 users.
› Using Cloud Voice for small call centers.
› Call recording (in the product roadmap) for the support desk.
Forrester has not included any of these future opportunities in the financial analysis.

5 | The Total Economic Impact Of Microsoft 365 Cloud Voice

Flexibility, as defined by TEI,
represents an investment inadditional capacity or capability
that could be turned into businessbenefit for a future additional
investment. This provides anorganization with the “right” or theability to engage in future initiatives
but not the obligation to do so.

Financial Summary
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, andpayback period for the composite organization’s investment in Microsoft 365 Cloud Voice. Forrester assumes ayearly discount rate of 10% for this analysis.
Total costs
Total benefits
Cumulative net benefits
Cash
flows

ROI
261%

$10.0 M
$8.0 M$6.0 M

NPV$6.9 million$4.0 M$2.0 M

Payback (after
go-live)<3 months-$2.0 M
InitialYear 1

Year 2

Year 3© 2019, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best
available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester
Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are theproperty of their respective companies. For additional information, go to forrester.com.

Disclosures
The reader should be aware of the following:
The study is commissioned by Microsoft and delivered by Forrester Consulting. It is not meant to be a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises thatreaders use their own estimates within the framework provided in the report to determine the appropriateness of an investment
in Microsoft 365 Cloud Voice.
Microsoft reviewed and provided feedback to Forrester. Forrester maintains editorial control over the study and its findings anddoes not accept changes to the study that contradict Forrester’s findings or obscure the meaning.
Microsoft provided the customer names for the interviews but did not participate in the interviews.
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Total Economic Impact™ (TEI) is a methodology developed by Forrester Research that enhances a company’s technology
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The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior
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6 | The Total Economic Impact Of Microsoft 365 Cloud Voice