Quantifying the Value of Collaboration with Teams

Teams is Good, But Maybe Not That Good

Those who read what I have written about Microsoft Teams since its preview in November 2016 and general availability in March 2017 know that I like the application. But that doesn’t mean that I take everything generated about Teams by Microsoft as being 100% accurate. They have, after all, to market Teams in a competitive environment. And although Microsoft has done well in having Teams used by over 500,000 organizations, there’s still lots of potential customers to convince or win from major competitors, like Slack.

All of which brings me to the report written by Forrester Consulting and commissioned by Microsoft titled “The Total Economic Impact of Microsoft Teams.” The report was launched on April 23 by Teams GM Lori Wright, who said “For a standard 5,000-user organization, the study reported benefits and costs of roughly $30.3 million and 3.3 million respectively, resulting in an overall net benefit of $27.1 million over three years.”

The Financial Benefits of Collaborating with Teams
Figure 1: The Financial Benefits of Collaborating with Teams

Any report paid for by a company deserves some suspicion, if only because few authors will be truly independent when they take on a commission to write such a report. I also wonder whether the authors truly understand the Office 365 ecosystem within which Teams operates.

In any case, I don’t want to trash the report line-by-line. Instead, I thought that I would share some thoughts that occurred to me as I read the report. It’s always important to question the findings and assumptions made in a report to figure out where the real truth lies.

Thoughts About the Savings Claimed

I’m not sure that Teams reduces the number and duration of meetings. That hasn’t been my experience in any organization where I have used Teams. Microsoft seems to still love meetings, for instance, even if they have moved from Skype for Business Online to Teams. There’s no doubt that Teams meetings are much better quality than Skype for Business meetings, but streamlining effectiveness within meetings is much more behavioral-based than achieved through technology (MyAnalytics helps here). Claiming $6.9 million savings over 3 years is a stretch.

The report also says that organizations can reduce spend on other communication software and hardware solutions. It’s true that Teams is included in Office 365, but if you want to use Teams for the full-blown meeting and phone-replacement experience, substantial costs might be incurred for Microsoft Phone System calling plans and hardware (either upgrading or replacing devices with Teams-compatible systems). The report claims savings of nearly $650K. In reality, this might be a negative figure, especially for organizations with multiple meeting rooms.

Online meetings replace 150 overnight trips. This is the nirvana promised by all video/audio communication systems. Over many years, I haven’t noticed much reduction in business travel apart from that forced by economic pressures. A cynic might say that you have to spend on better communications hardware before anyone will stop overnight trips. Still, let’s assume that we can convince some of the 3,500 information workers in the composite organization used as the basis for the report to stop some trips by Year 3, so we’ll keep the $233,080 claimed saving.

A big claim for $14.3 million is based on information workers saving 4 hours (each) per week from improved collaboration and information sharing. Hmmm… I’d like to see a CIO put their neck on the line before a board and make a commitment to achieve this level of savings. The simple fact is that it is enormously difficult to measure how improved collaboration and information sharing affects the bottom line in any large organization. You can aspire to using all the functionality available in Office 365 to do things faster, better, and more accurately, but experience tells us that unless an organization invests a lot in user training and ongoing education, people simply won’t know how to use the new technology and will continue working as they have done for years.

Decision makers improve their time-to-decision by 17.7% and so achieve a saving of $451,273 over three years. Another big doubt in my mind. Is Teams responsible for making people more responsive or is it that Outlook mobile is a great on-the-road email client that helps busy executives organize their thinking better? Does the channel chaos in Teams match the panic that can be induced by an overflowing inbox? If life were perfect and users all understood how to use technology to the maximum, we might be able to achieve these kind of savings, but I don’t see this in reality.

$1.4 million is claimed for improved worker satisfaction, integration, and empowerment. There’s no doubt that many people like using Teams (most of those I know in companies that have Teams are in this category). But I wonder if Teams makes that much difference to people. We know that direct line managers are the single biggest influence over how people feel about a company and whether they stay. Working for a poor boss is always going to be a problem, with or without Teams in the equation. However, on balance, I do think that people like Teams and are happier when organizations make tools like this available to them (the same could be said for Slack and Workplace by Facebook).

Less time is spent switching between applications each day to save $4.8 million over three years. The assumption is made here that information workers will use the 15 minutes they apparently save to do something productive because they’ve been saved the need for cognitive re-engagement. Sounds like some consulting assumptions based on not a lot of data to me. Some people will be more productive; some people won’t. Some will continue working in the way that they’ve done before because it works for them.

Costs

To be fair, the report acknowledges that some costs need to be attributed to the deployment and support of Teams. Our composite organization needs to stump up $1.1 million for internal efforts to implement and support Teams. This figure includes a migration from Skype for Business Online (costing $348,480) and follows the main Office 365 deployment before Teams “can be provided to users with the flip of a switch.”

The cost model used proposes 2.5 FTE to look after the Teams deployment on an ongoing basis, or $343,750 yearly (Figure 2). Two of these people are fully engaged in change management and training while the half-person manages Teams. Two people for 3,500 distributed information workers seems low and that half-person is going to be very busy keeping up to date with all the changes that occur inside Office 365 that might affect Teams, understanding the apps, connectors, and bots that people might want to use, writing some code in PowerShell or the Graph to fill in management gaps left by Microsoft, investigating and reporting problems, and perhaps taking some well-earned time off. The integrated nature of Teams means that the half-person must understand Office 365, SharePoint Online, Exchange Online (possibly hybrid Exchange too), Azure Active Directory, Office 365 Groups, PowerShell, Planner, the apps integrated with Teams, and so on. They will be a busy half-person.

Calculating Teams support and deployment costs
Figure 2: Calculating Teams support and deployment costs

Calculations like this make me wonder if the people writing the report had ever actually used Teams or tried to manage the application in production. The answer is that they probably had not, because they are busy writing reports and can’t be concerned with the details of actually understanding the technology.

Some Value in the Report

Although I have many questions about how the authors of the report came to their conclusions, I acknowledge that reports like this are difficult to write because of the assumptions that need to be made to calculate anything. There’s value to be gained by reading the report, throwing away anything that seems outlandish, and asking yourself if what remains can be put into the context of the unique business and technology circumstances pertaining to your organization. This is where real value lies: understand how reports like this are constructed; the questions asked and the responses made; and how a case is constructed to answer the question whether the deployment of a technology has financial benefits. You might be able to create your own version of this report to match your needs, and if you can, there’s value to be gained.

Remember the old adage that external consultants can only ever come up with 50% of an answer based on their experience. You have the other 50% coming from your knowledge of the people, politics, stresses, and technology that exist within the organization. Put the two halves together and you might get a good answer.


Need help understanding the realities of Office 365 and Teams? Look no further than the Office 365 for IT Pros eBook. We might not have fancy financial footwork, but we do have facts – lots of them.

Advertisements

2 Replies to “Quantifying the Value of Collaboration with Teams”

  1. Your skepticism above matches mine. Wish you could have heard my presentation on ROI and Office 365 last week, where I made similar kinds of arguments. Perhaps ESPC 2019 – assuming my abstract for that talk gets accepted?

    1. A talk on realistic ROIs for Office 365 and Teams would be indeed interesting.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.