The Total Economic Impact™ Of Dell Premier
Cost Savings And Business Benefits Enabled By Premier
A Forrester Total Economic Impact™ Study Commissioned By Dell Technologies and AMD, February 2024
Common challenges like fragmented processes, noncompliant purchases, rogue spending, security flaws, and device inconsistencies plague IT procurement teams, who are increasingly seeking automation. Dell Premier offers quick e-procurement and streamlined processes through a centralized online portal and integrations. These solutions enable productivity enhancements, risk management, and cost controls; and frees up procurement resources to focus on strategic initiatives.
Dell Premier brings innovation to e-procurement through its suite of complimentary tools designed to simplify and expand access to IT purchasing, asset management, and accelerated deployment. Dell Premier saves organizations time and money, and improves employee productivity.
Dell Premier offers a single site that is personalized for specific buying needs, with consistent pricing and products. IT procurement teams can customize solutions according to whether they need to digitally modernize locally or globally. For both local and global businesses, Dell integrates Premier with ERP systems to streamline the purchasing process for punchout or buyer-hosted catalogs. Dell’s API technology allows teams to extend their existing IT service management (ITSM) systems, even if they’re hosted by another provider, to Dell’s Premier purchasing environment. Dell customers can deploy any combination — if not all — of the solutions to best serve their business and IT needs.
Dell Technologies and AMD commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Premier.1 Dell Technologies and AMD, who continually partner with each other to evolve their own technologies, are now also working together to provide modern data center solutions that power digital innovation for other businesses. The partnership seeks to advance technological boundaries, which will aid businesses in accelerating growth, optimizing operations, and minimizing risks. This study serves to equip readers with a comprehensive framework for evaluating Premier's potential financial impact, driving innovation by addressing challenges, enhancing efficiencies, and enabling next-generation outcomes.
Return on investment (ROI)
324%324%
Net present value (NPV)
$2.36M$2.36M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed six representatives at four organizations and surveyed 207 additional respondents with experience using Premier. Survey respondents came from organizations across 10 countries: 41% from APAC, 29% from EMEA, 20% from North America, and 10% from South America. Their organizations ranged in size, between 100 to more than 20,000 employees. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a global enterprise with $5 billion in annual revenue and has 25,000 employees, and 95% of employees interact directly with Premier through their ITSM system. The procurement team comprises 25 people and the composite organization’s annual spending averages $22.5 million, or $900 per employee. All financial findings presented in this study are based on the details of the composite organization.
purchases IT devices for about 0 employees, has 0 (estimated) procurement-team members, and receives approximately 0 procurement-related IT helpdesk tickets per year. Custom results are based on these inputs and the TEI case study.
Interviewees said that prior to using Premier, their organizations navigated decentralized IT procurement processes that demanded substantial time and effort to coordinate equipment orders across departments. Manual processes created common issues like inconsistent pricing and the lack of standardized device configurations for orders globally. This led to rogue spending and a loss of productivity across the organization.
After the investment in Premier, the interviewees gained access to a centralized IT purchasing platform that automates workflows, which creates efficiencies for procurement and IT teams as well as new hires. With standard configurations and custom personalized product bundles, teams can better control spending across all users. Access to Premier also enhances the relationship organizations share with their Dell representative, who engages in high-level strategic solutioning.
“What outcomes of working with Dell Premier have you experienced at your organization? (Select all that apply.)”
Base: 207 global decision-makers who are managers and above in IT roles
Source: A commissioned study conducted by Forrester Consulting on behalf of Dell, November 2023
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- Increased efficiency of procurement team by 20%. The procurement team reduces the amount of resources dedicated to the entire procurement lifecycle from quoting through to delivery as a result of automation through Premier. This is worth $430,000 over a three-year term.
For with 0 procurement team members (estimate), this benefit might be worth over three years.
- Increased efficiency of IT team due to 15% reduction in helpdesk tickets and 30 minutes saved per device on time to configure a system. The IT team gains efficiencies in two areas with process and device standardizations. Time spent on configuring Dell devices was cut by 30 minutes per device, and time dedicated to answering end users’ IT procurement-related helpdesk ticket requests was reduced by 15%. These are worth $449,000 over a three-year term.
For this benefit might be worth over three years.
- Decreased device costs by 10% due to standardization. Device standardization prevents excessive procurement of devices for specific user groups and ensures negotiated discounts are applied consistently across orders. This saves the composite organization $2 million over a three-year period.
For this benefit might be worth over three years.
- Increased new hire efficiency by receiving equipment 67% faster. Access to Dell equipment at the time of onboarding enables new hires to realize an improved speed to productivity. This generates value-add from new hires for the organization that is worth $249,000 over three years.
For this benefit might be worth over three years.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- Increased ability for self-service. Premier’s platform is easy to navigate, which allows end users to procure Dell equipment without disrupting the procurement team. It also allows for cross-functional teams to complete necessary reporting and manage order statuses, purchase histories, and accounts.
- Improved shipping accuracy. Accurate forecasting enables procurement teams and end users alike to effectively plan for periods of productivity spikes that require Dell devices, rather than waiting and wasting resources.
- Strengthened relationship with Dell representative. Automation allows the Dell representative to focus on strategically supporting the organization’s future procurement direction, beyond providing order support and quote assistance.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Initial internal effort. Some internal effort is necessary for implementation and maintenance, more so in relation to integrations of internal systems (e.g., ERP, ITSM) to Premier. The initial setup took four FTEs (full time employees) three months to complete.
For , these costs could represent over three years.
- Ongoing internal management and programmatic expenses. One and a half procurement FTEs dedicate their time to ongoing internal management and development of Premier. Configuration costs total $75,000 annually.
For , these costs could represent over three years.
The representative interviews and financial analysis found that a composite organization experiences benefits of $3.09 million over three years versus costs of $728,000, adding up to a net present value (NPV) of $2.36 million and an ROI of 324%.
might experience benefits of over three years versus costs of , adding up to an NPV of and an ROI of 0%.
Key Statistics
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Return on investment (ROI)
324%324%
-
Benefits PV
$3.09M$3.09M
-
Net present value (NPV)
$2.36M$2.36M
-
Payback
<6 months<6 months
Benefits (Three-Year)
Increased procurement team efficiency Increased IT team efficiency Decreased device costs due to standardization Increased new hire efficiencyTEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Premier.
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 Premier can have on an organization.
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Due Diligence
Interviewed Dell stakeholders and Forrester analysts to gather data relative to Premier.
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Interviews and Survey
Interviewed six representatives at four organizations and surveyed 207 respondents at organizations using Premier to obtain data about costs, benefits, and risks.
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Composite Organization
Designed a composite organization based on characteristics of the interviewees’ organizations.
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Financial Model Framework
Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.
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Case Study
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Disclosures and Disclaimers
Readers should be aware of the following:
This study is commissioned by Dell Technologies and AMD 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 study to determine the appropriateness of an investment in Premier. For the interactive functionality using Configure Data/Custom Data, the intent is for the questions to solicit inputs specific to a prospect's business. Forrester believes that this analysis is representative of what companies may achieve with Dell Premier based on the inputs provided and any assumptions made. Forrester does not endorse Dell or its offerings. Although great care has been taken to ensure the accuracy and completeness of this model, Dell and Forrester Research are unable to accept any legal responsibility for any actions taken on the basis of the information contained herein. The interactive tool is provided ‘AS IS,’ and Forrester and Dell make no warranties of any kind.
Dell 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.
Dell provided the customer names for the interviews but did not participate in the interviews. Forrester fielded the double-blind survey using a third-party survey partner.
Consulting Team:
Roger Nauth
Sarah Lervold
Jonathan Lipsitz
Drivers leading to the Premier investment
Interviews
| Role | Industry | Region | Revenue | Employees | Premier Users | Annual Dell Spending | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Global IT order fulfillment director Order support leader |
Advanced technology manufacturer | Global | $35 billion | 150,000 | 50 | $51 million | ||||||
| Head of IT operations | Traffic control services and safety | US | $300 million | 200 | 8 | $291,000 | ||||||
| IT procurement specialist IT procurement analyst |
HVAC and refrigeration systems manufacturer | Global | $17 billion | 39,000 | 30 | $7.7 million | ||||||
| Manager of end-user computing | Truck, bus, and diesel engine manufacturing | Global | $11 billion | 14,500 | 10 | $7.8 million | ||||||
Key Challenges
Forrester interviewed six decision-makers at four organizations and surveyed users at 207 organizations with experience using Premier. For more details on the respondents who participated in this study, see Appendix B.
Before adopting Premier, customers coordinated their IT purchasing processes through a myriad of disjointed methods, such as ordering directly from their Dell representative via email or over the phone, and building internal applications to streamline ordering across individual departments.
The interviewees noted how their organizations struggled with common challenges, including:
- Manual and decentralized procurement processes. Procurement teams emphasized that coordinating IT purchasing across disparate departments was time consuming, especially as companies scaled and employee needs rose in complexity. Access to multiple avenues of purchasing equipment caused procurement teams to spend additional time ensuring orders were not duplicative and account for the full investment in Dell devices at the end of each billing cycle.
- Lack of standardization across devices. Without a centralized catalog or a defined process that standardizes device ordering, teams often procured devices with advanced capabilities to end users, paying extra for capabilities that were unutilized. Ordering teams generated individual quotes each time an order was placed, rather than using automation to reference a past order. A lack of standardization also increased the volume of IT support tickets from end users and delayed immediate productivity for new hires as IT teams dedicated additional time to specific device configurations.
- Inconsistent pricing across global locations. For companies with global operations, teams noted the additional time required to manually compare equipment prices across geographies when inconsistencies arose and to ensure features (e.g., corporate discounts) were consistently applied.
Investment Objectives
The interviewees’ organizations searched for a solution that could:
- Provide a secure and authenticated online procurement platform to enable onboarding demands and manage IT lifecycles.
- Attain streamlined, automated, global processes.
- Integrate with ITSM and ERP solutions.
- Track standard configurations.
- Provide a global reach to support current and future expansion needs.
“What are some key factors that drove your decision to adopt Premier? (Select all that apply.)”
Base: 207 global decision-makers who are managers and above in IT roles
Source: A commissioned study conducted by Forrester Consulting on behalf of Dell, November 2023
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 is representative of the four organizations where the six interviewees are from, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The global enterprise has $5 billion in annual revenue with 25,000 employees, 95% of whom directly interact with Premier through their ITSM. The organization has a procurement team of 25 people and an annual spending with Dell of $22.5 million (i.e., $900 per employee). The composite has integrated its ERP system with Premier.
purchases IT devices for about 0 employees, has 0 (estimated) procurement team members, and receives approximately 0 procurement-related IT helpdesk tickets per year.
Quantified benefit data as applied to the composite
Total BenefitsTotal Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Increased procurement team efficiency | $105,719 $105,719 | $211,438 $211,438 | $211,438 $211,438 | $528,594 $528,594 | $429,706 $429,706 |
| Btr | Increased IT team efficiency | $180,471 $180,471 | $180,471 $180,471 | $180,471 $180,471 | $541,414 $541,414 | $448,806 $448,806 |
| Ctr | Decreased device costs due to standardization | $787,469 $787,469 | $787,469 $787,469 | $787,469 $787,469 | $2,362,406 $2,362,406 | $1,958,318 $1,958,318 |
| Dtr | Increased new hire efficiency | $61,200 $61,200 | $122,400 $122,400 | $122,400 $122,400 | $306,000 $306,000 | $248,754 $248,754 |
| Total benefits (risk-adjusted) | $1,134,859 $1,134,859 | $1,301,777 $1,301,777 | $1,301,777 $1,301,777 | $3,738,413 $3,738,413 | $3,085,584 $3,085,584 | |
Increased Procurement Team Efficiency
Evidence and data. Centralizing procurement improves team efficiency and effectiveness, which allows existing team members to reallocate their time to higher-value projects and allows the organization to avoid hiring additional people to the team. Interviewees noted:
- They saved 25 minutes per Dell transaction.
- They saved 50% of time saved on global order workflow processes.
- Each team member saved 2 hours per month on forecasting and reporting activities.
- Time savings of 80% by matching pricing across locations.
- Avoided growing the ordering agent team by 40%.
The survey looked at procurement efficiency gains across a range of activities like purchasing, reporting, and tracking Dell equipment, as well as getting pricing, ensuring compliance requirements, and setting product standards for global locations. Respondents reported significant reductions in time spent across these activities.
“Now, thinking of how Local Portal helped streamline daily operations of procurement, what do you think is the percentage reduction in time spent by procurement for each of these tasks? (Select one per row.)”
Base: 83 global decision-makers who are managers and above in IT roles who use Local Portal
Source: A commissioned study conducted by Forrester Consulting on behalf of Dell, November 2023
“You noted that Global Portal has enabled one-stop shopping for your global procurement needs. Using your best estimate, what is the average percentage reduction in time spent on global procurement needs as a result of Global Portal?”
Base: 92 global decision-makers who are managers and above in IT roles who use Global Portal
Source: A commissioned study conducted by Forrester Consulting on behalf of Dell, November 2023
Modeling and assumptions. For the composite organization, Forrester assumes the following:
- The procurement team reduces their effort by 20% with Premier. They only realize half of this efficiency in Year 1 as they adjust to and enable the new processes.
- The average fully-burdened cost, or annual salary with benefits and payroll taxes, of a procurement professional is $99,500.
- A productivity recapture of 50% is applied because not all time savings translate into completion of additional work.
Risks. Some factors that could result in this benefit being lower than that reported by interviewees include:
- Already having streamlined processes and putting similar vendor procurement systems in place.
- Having lower fully-burdened salary costs.
- The size and experience level of the procurement team.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $430,000.
For , this benefit may have a three-year, risk-adjusted total PV of .
Increased Procurement Team EfficiencyIncreased Procurement Team Efficiency
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| A1 | Employees | CompositeComposite | 25,00025,000 | 25,00025,000 | 25,00025,000 |
| A2 | Procurement team members | CompositeComposite | 2525 | 2525 | 2525 |
| A3 | Reduced procurement effort | CompositeComposite | 10%10% | 20%20% | 20%20% |
| A4 | Procurement effort after Premier | A2*A3 | 2.52.5 | 5.05.0 | 5.05.0 |
| A5 | Average annual fully-burdened cost of a procurement professional | TEI StandardTEI Standard | $99,500 $99,500 | $99,500 $99,500 | $99,500 $99,500 |
| A6 | Productivity recapture | TEI standard | 50%50% | 50%50% | 50%50% |
| At | Increased procurement team efficiency | A4*A5*A6 | $124,375 $124,375 | $248,750 $248,750 | $248,750 $248,750 |
| Risk adjustment | ↓15% | ||||
| Atr | Increased procurement team efficiency (risk-adjusted) | $105,719 $105,719 | $211,438 $211,438 | $211,438 $211,438 | |
| Three-year total: $528,594 $528,594 | Three-year present value: $429,706 $429,706 | ||||
Increased IT Team Efficiency
Evidence and data. Interviewees reported that deploying Dell Premier in their environments improved product standardization and eliminated rogue hardware purchasing. This made it easier for the customers’ IT organizations to configure and provision new devices as most necessary services were built into standard configurations. Additionally, with standard, preconfigured devices, IT teams spent less time addressing IT helpdesk tickets related to their Dell equipment as employees submitted less unique requests over time. Interviewee examples included:
- Time savings of 25% for setting up hardware, which reduced device configuration time from 1 hour to 45 minutes.
Survey responses noted time savings for an IT employee to set up hardware:
- For those who purchased equipment locally, 60% of respondents reduced setting up hardware by more than 11%.
- For those who purchased equipment globally, 73% of respondents reduced setting up hardware by more than 11%.
Survey responses also noted the percentage decrease in helpdesk tickets and calls related to Dell products/purchases:
- For those purchasing equipment locally, 50% of respondents reduced purchasing helpdesk tickets between 11% and 25%.
- For those purchasing equipment globally, 46% of respondents reduced purchasing helpdesk tickets between 11% and 25%.
Modeling and assumptions. For the composite organization, Forrester assumes the following:
- The organization operates on a three-year IT estate refresh schedule, meaning 8,333 new devices are purchased annually.
- With Premier, IT reduces the time spent on device configuration by 30 minutes.
- The average fully-burdened hourly cost of an IT professional is $63.
- A productivity recapture of 50% is applied to the device configuration benefit as not all of the time savings translate into completing additional work.
- Employees submit 3,700 IT helpdesk tickets annually.
- With Premier, employees submit 15% less tickets annually.
- Each ticket requires 15 minutes of IT time.
- The average fully-burdened hourly salary of a helpdesk analyst is $35.
- A productivity recapture of 75% is applied to the IT helpdesk support benefit because not all of the time savings translate into completing additional work.
Risks. Some factors that could result in this benefit being lower than that reported by interviewees include:
- Already automating or outsourcing device configuration.
- Having minimal configuration needs.
- Having lower fully-burdened costs for IT and helpdesk resources.
- Having minimal IT ticket submissions.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $449,000.
For , this benefit may have a three-year, risk-adjusted total PV of .
Increased IT Team EfficiencyIncreased IT Team Efficiency
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| B1 | Devices purchased (rounded) | CompositeComposite | 8,3338,333 | 8,3338,333 | 8,3338,333 |
| B2 | Configuration time savings per device (hours) | CompositeComposite | 0.50.5 | 0.50.5 | 0.50.5 |
| B3 | Productivity recapture | TEI Standard | 75%75% | 75%75% | 75%75% |
| B4 | Total time savings (hours) | B1*B2*B3 | 3,1253,125 | 3,1253,125 | 3,1253,125 |
| B5 | Fully-burdened hourly salary for an IT professional | TEI StandardTEI Standard | $63 $63 | $63 $63 | $63 $63 |
| B6 | Subtotal: Total IT labor savings for optimized configuration time | B4*B5 | $196,875 $196,875 | $196,875 $196,875 | $196,875 $196,875 |
| B7 | Helpdesk tickets related to IT prior to Dell Premier | CompositeComposite | 3,7003,700 | 3,7003,700 | 3,7003,700 |
| B8 | Percentage reduction in tickets submitted after Dell Premier | CompositeComposite | 15%15% | 15%15% | 15%15% |
| B9 | Avoided helpdesk tickets related to IT after Dell Premier | B6*B7 | 555555 | 555555 | 555555 |
| B10 | Hours required for each ticket | CompositeComposite | 0.250.25 | 0.250.25 | 0.250.25 |
| B11 | Total hours avoided (rounded) | B9*B10 | 139139 | 139139 | 139139 |
| B12 | Productivity recapture | TEI Standard | 75%75% | 75%75% | 75%75% |
| B13 | Fully-burdened hourly salary of a helpdesk analyst | CompositeComposite | $35 $35 | $35 $35 | $35 $35 |
| B14 | Subtotal: Total savings for IT helpdesk support on procurement-related tickets | B11*B12*B13 | $3,649 $3,649 | $3,649 $3,649 | $3,649 $3,649 |
| Bt | Increased IT team efficiency | B6+B14 | $200,524 $200,524 | $200,524 $200,524 | $200,524 $200,524 |
| Risk adjustment | ↓10% | ||||
| Btr | Increased IT team efficiency (risk-adjusted) | $180,471 $180,471 | $180,471 $180,471 | $180,471 $180,471 | |
| Three-year total: $541,414 $541,414 | Three-year present value: $448,806 $448,806 | ||||
Decreased Device Costs Due To Standardization
Evidence and data. Interviewees said that they were able to reduce device costs in several ways. Encouraging staff to order through Premier’s catalog ensured that negotiated pricing was being applied. Preventing rogue spending kept employees from buying from higher-priced sources and ensured that customers could centralize and easily access Dell spending data. Creating standard configurations for different user profiles kept employees from buying devices at a higher cost. Interviewees shared:
- Cost savings of 10% to 30% per purchased machines.
- Savings between $600 and $1,500 per purchased machine.
- Reduced the number of configurations from 500 to 12 standards.
Modeling and assumptions. For the composite organization, Forrester assumes the following:
- It operates on a three-year IT estate refresh schedule, meaning 8,333 new devices are purchased annually.
- The purchase cost per device prior to adopting Premier was $1,050.
- Premier reduces the purchase cost by 10%, or a savings of $105 per device.
Risks. Some factors that could result in this benefit being lower than that reported by interviewees include:
- Already having controls in place to keep people from buying excessively highly-specified hardware.
- Already having controls in place to prevent rogue or maverick spending.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2 million.
For , this benefit may have a three-year, risk-adjusted total PV of .
Decreased Device Costs Due To StandardizationDecreased Device Costs Due To Standardization
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| C1 | Devices purchased | B1 | 8,3338,333 | 8,3338,333 | 8,3338,333 |
| C2 | Previous purchase cost per device | CompositeComposite | $1,050 $1,050 | $1,050 $1,050 | $1,050 $1,050 |
| C3 | Reduced purchase cost with Dell Premier | CompositeComposite | 10%10% | 10%10% | 10%10% |
| C4 | Savings per device with Dell Premier | C2*C3 | $105 $105 | $105 $105 | $105 $105 |
| Ct | Decreased device costs due to standardization | C1*C4 | $874,965 $874,965 | $874,965 $874,965 | $874,965 $874,965 |
| Risk adjustment | ↓10% | ||||
| Ctr | Decreased device costs due to standardization (risk-adjusted) | $787,469 $787,469 | $787,469 $787,469 | $787,469 $787,469 | |
| Three-year total: $2,362,406 $2,362,406 | Three-year present value: $1,958,318 $1,958,318 | ||||
Increased New Hire Efficiency
Evidence and data. Interviewees shared that new hires were able to realize an improved speed to productivity as Dell equipment were ready for use immediately upon onboarding. A streamlined ordering process and standard configurations enabled the devices to reach new employees with little customization, eliminating the potential for further delays. Interviewees shared:
- Increased percentage of hardware delivered on the first day for new hires from 70% five years ago to 98% to 99% today.
- New hires used to wait two to three days for equipment to arrive. Now, equipment is ready for immediate productivity when they join.
Modeling and assumptions. For the composite organization, Forrester assumes the following:
- New hires comprise 9% of total employees annually.
- Before Premier, it takes an average of three working days for a new hire to receive their Dell equipment.
- With Premier, this time is reduced to one working day.
- During the new hire ramp period, each new hire is 20% productive.
- The fully-burdened hourly salary of a new hire is $40.
- A productivity recapture of 75% is applied because not all of the time savings translate into completion of additional work.
Risks. Some factors that could result in this benefit being lower than interviewees reported include:
- The number and location of new hires.
- The speed at which new hires contribute productive work.
- The nature of work new hires contribute.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $249,000.
For , this benefit may have a three-year, risk-adjusted total PV of .
Increased New Hire EfficiencyIncreased New Hire Efficiency
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| D1 | Employees | A1 | 25,00025,000 | 25,00025,000 | 25,00025,000 |
| D2 | Percentage of employees who are new hires each year | CompositeComposite | 9%9% | 9%9% | 9%9% |
| D3 | New hires each year | D1*D2 | 2,2502,250 | 2,2502,250 | 2,2502,250 |
| D4 | Average hours needed for new hire to receive equipment before Dell Premier | CompositeComposite | 2424 | 2424 | 2424 |
| D5 | Average hours needed for new hire to receive equipment with Dell Premier | CompositeComposite | 1616 | 88 | 88 |
| D6 | Decrease in hours needed for new hire to receive equipment with Dell Premier | D4-D5 | 88 | 1616 | 1616 |
| D7 | Percentage productivity of new hire during ramp | CompositeComposite | 20%20% | 20%20% | 20%20% |
| D8 | Fully-burdened hourly salary of average employee | TEI StandardTEI Standard | $40 $40 | $40 $40 | $40 $40 |
| D9 | Productivity recapture | TEI standard | 50%50% | 50%50% | 50%50% |
| Dt | Increased new hire efficiency | D3*D6*D7*D8*D9 | $72,000 $72,000 | $144,000 $144,000 | $144,000 $144,000 |
| Risk adjustment | ↓15% | ||||
| Dtr | Increased new hire efficiency (risk-adjusted) | $61,200 $61,200 | $122,400 $122,400 | $122,400 $122,400 | |
| Three-year total: $306,000 $306,000 | Three-year present value: $248,754 $248,754 | ||||
ERP And ITSM Integration Spotlight
When asked “What has ERP integration solved in your environment?”, survey respondents shared:
Base: 90 global decision-makers who are managers and above in IT roles who use an ERP integration
Source: A commissioned study conducted by Forrester Consulting on behalf of Dell, November 2023
When asked, “What has ITSM integration solved in your environment?”, survey respondents shared:
Base: 108 Manager+ global decision-makers in IT roles who use an ITSM integration
Source: A commissioned study conducted by Forrester Consulting on behalf of Dell, November 2023
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- Increased ability for self-service. A streamlined platform that is easy to navigate provides end users the opportunity to independently order their own equipment (e.g., standard devices and accessories) as needed. It also allows cross-functional teams (e.g., accounting) to easily pull reporting data without disrupting the procurement team.
-
Improved shipping accuracy. With accurate shipping projections, procurement teams and end users can effectively plan for periods of productivity that demand Dell devices, rather than wasting productivity due to inaccurate forecasting.
- Explaining the process in detail, the IT procurement specialist at the HVAC and refrigeration systems manufacturer noted: “[Premier] sends us an email so you can track your order. You know exactly where your order is. It’s been shipped. It’s on the state of being shipped. You can receive a tracking number. This type of communication is good.”
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Strengthened relationship with Dell representative. With automation in place for the global workflow ordering process, the Dell account representative focuses on providing additional areas of continuous improvement for customers. Interviewees shared:
- The manager of end-user computing at the truck, bus, and diesel engine manufacturer explained that their team leverages Premier for many tasks on their own, but turn to Dell for additional assistance. They told Forrester: “My Dell rep is my backup solution so if I do need something or if I have any issues, they’re always there to help solve it. It’s been very helpful.”
- The head of IT operations at the traffic control services and safety organization said: “The great thing about our inside salesperson is that they always try to connect us with the proper resource at Dell. They’re always open to suggestions. If we request, “Hey, we’re looking to integrate this platform or we’d really love to see this feature within Premier,” they take that feedback and you can tell it’s in earnest. They don’t simply say, “Drop a line into this box and we’ll never open the box.” It’s a two-way partnership.”
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Premier and later realize additional uses and business opportunities, including:
- Sustainability. The manager of end-user computing at the truck, bus, and diesel engine manufacturer shared their organization’s internal goal to maximize sustainability efforts when ordering future Dell equipment. This included procuring more energy-efficient devices and implementing drop-shipping processes. They noted: “If I were to buy a single curved [monitor], I’m essentially buying four monitors because the cost is much higher but at the same time more [efficient] — we’re being more green and we do see some energy savings. We’re trying to get that balance and understanding of whether we go more expensive or push for a green footprint.”
- ERP and ITSM integrations. Organizations that do not need ERP or ITSM integrations at the time of initial Premier deployment may realize additional benefit once integrations are implemented.
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
Quantified cost data as applied to the composite
Total CostsTotal Costs
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Etr | Initial internal setup cost of Dell Premier | $114,430 $114,430 | $0 $0 | $0 $0 | $0 $0 | $114,430 $114,430 | $114,430 $114,430 |
| Ftr | Ongoing internal management and programmatic expenses | $0 $0 | $246,675 $246,675 | $246,675 $246,675 | $246,675 $246,675 | $740,025 $740,025 | $613,444 $613,444 |
| Total costs (risk-adjusted) | $114,430 $114,430 | $246,675 $246,675 | $246,675 $246,675 | $246,675 $246,675 | $854,455 $854,455 | $727,874 $727,874 | |
Initial Internal Effort Setup Cost Of Dell Premier
Evidence and data. Interviewees shared that it was generally quick and easy to implement Premier. Dell enables Premier for organizations with little involvement needed from the customer. However, some internal effort is required to perform the ERP and ITSM integration work alongside Dell.
Modeling and assumptions. For the composite organization, Forrester assumes the following:
- The initial setup to bring on all four Premier solutions took four FTEs approximately three months.
- The total fully-burdened monthly salary of the four FTEs involved in the setup is $8,292.
Risks. Some factors that could result in this cost being higher than reported include:
- A larger, more complex rollout which impacts timelines.
- More hands-on ongoing management by the customer.
- Team responsiveness which affects request cancellations or delays.
Results. To account for these risks, Forrester adjusted this cost upward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $114,000.
For , these costs may have a three-year, risk-adjusted total PV of .
Initial Internal Setup Cost Of Dell PremierInitial Internal Setup Cost Of Dell Premier
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| E1 | Number of FTEs involved in setting up Dell Premier | CompositeComposite | 44 | 0 | 0 | 0 |
| E2 | Months required to set up Dell Premier | CompositeComposite | 33 | 0 | 0 | 0 |
| E3 | Fully-burdened monthly salary of FTEs involved in setting up Dell Premier (rounded) | CompositeComposite | $8,292 $8,292 | 0 | 0 | 0 |
| Et | Initial internal setup cost of Dell Premier | E1*E2*E3 | $99,504 $99,504 | $0 $0 | $0 $0 | $0 $0 |
| Risk adjustment | ↑15% | |||||
| Etr | Initial internal setup cost of Dell Premier (risk-adjusted) | $114,430 $114,430 | $0 $0 | $0 $0 | $0 $0 | |
| Three-year total: $114,430 $114,430 | Three-year present value: $114,430 $114,430 | |||||
Ongoing Internal Management And Programmatic Expenses
Evidence and data. One and a half FTEs are dedicated to ongoing management and development of the solution suite.
Modeling and assumptions. For the composite organization, Forrester assumes the following:
- One and a half FTEs manage Dell Premier on an ongoing basis.
- A configuration cost of $75,000 is incurred annually.
Risks. Some factors that could result in this cost being higher than reported include:
- A larger, more complex set of integrated systems.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $613,000.
For , these costs may have a three-year, risk-adjusted total PV of .
Ongoing Internal Management And Programmatic ExpensesOngoing Internal Management And Programmatic Expenses
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| F1 | FTEs involved in ongoing management and development | CompositeComposite | 0 | 1.501.50 | 1.501.50 | 1.501.50 | |
| F2 | Average fully-burdened annual salary of an experienced procurement manager | TEI StandardTEI Standard | $0 | $99,500 $99,500 | $99,500 $99,500 | $99,500 $99,500 | |
| F3 | Configuration costs | CompositeComposite | $0 | $75,000 $75,000 | $75,000 $75,000 | $75,000 $75,000 | |
| Ft | Ongoing internal management and programmatic expenses | (F1*F2)+F3 | $0 $0 | $224,250 $224,250 | $224,250 $224,250 | $224,250 $224,250 | |
| Risk adjustment | ↑10% | ||||||
| Ftr | Ongoing internal management and programmatic expenses (risk-adjusted) | $0 $0 | $246,675 $246,675 | $246,675 $246,675 | $246,675 $246,675 | ||
| Three-year total: $740,025 $740,025 | Three-year present value: $613,444 $613,444 | ||||||
Consolidated Three-Year Risk-Adjusted Metrics
Cash Flow Chart (Risk-Adjusted)
Total costs Total benefits Cumulative net benefits-
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.
Cash Flow Analysis (Risk-Adjusted Estimates)Cash Flow Analysis (Risk-Adjusted Estimates)
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($114,430)($114,430) | ($246,675)($246,675) | ($246,675)($246,675) | ($246,675)($246,675) | ($854,455)($854,455) | ($727,874)($727,874) |
| Total benefits | $0 $0 | $1,134,859 $1,134,859 | $1,301,777 $1,301,777 | $1,301,777 $1,301,777 | $3,738,413 $3,738,413 | $3,085,584 $3,085,584 |
| Net benefits | ($114,430)($114,430) | $888,184 $888,184 | $1,055,102 $1,055,102 | $1,055,102 $1,055,102 | $2,883,959 $2,883,959 | $2,357,710 $2,357,710 |
| ROI | 324%324% | |||||
| Payback period | <6 months<6 months | |||||
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
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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.
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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.
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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.”
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: survey demographics
Appendix C: Supplemental Material
Related Forrester Research
“2023 Buyer Insights: Procurement Professional,” Forrester Research, Inc., December 4, 2023.
“Transform Procurement For Future Fit Supply Chains,” Forrester Research, Inc., August 21, 2023.
Appendix D: Endnotes
1 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.
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