Case Study: Rhône-Poulenc Rorer commits to Office 2000

Rhône-Poulenc Rorer commits to the enterprise-wide adoption of Office 2000 over Office 97 based on Giga Information Group’s Total...

Rhône-Poulenc Rorer commits to the enterprise-wide adoption of Office 2000 over Office 97 based on Giga Information Group’s Total Economic Impact methodology

RPR chooses Office 2000 based on Total Business Benefit

Business benefits of IT investments are more than just showing that the investment reduces IT costs. Investments must be shown to increase business productivity or value for the entire organisation. Giga's TEI methodology calculates this by estimating both increases in benefits and reduction in costs, along with considering the investment's flexibility and risk. After being presented with the TEI analysis, RPR's CFO, Guillaume Prache, made a strategic business decision to commit to Office 2000. He said: "The Giga TEI analysis is compelling because it quantifiably shows how deploying Office 2000 addresses both present and future organisational needs."

Reduction in desktop operating costs

In RPR's environment, deploying Office 2000 is estimated to save 17 per cent annually in desktop operating costs. Measurable savings are associated with new deployment tools and wizards, such as the Custom Installation and Office Profile Wizard, deploying a single worldwide executable with multilingual support, and other features that are focused on decreasing end user support. End user support, including help desk calls and peer-to-peer support, will potentially decrease due to self-repairing applications and the ability for RPR to customise the Office 2000 Help.

Better productivity

While decreasing costs are important to all IT organisations, showing an increase in organisational productivity that results in greater organisational effectiveness is equally critical in achieving overall business success. Increasing organisational productivity through Office 2000 features, like web collaboration, information sharing or richer data analysis tools, is an optional benefit that was unavailable with previous versions.

These potential gains in organisational productivity and document management are enabled by web collaborative features such as Office Server Extensions, integrated NetMeeting, web publishing with HTML, and rich analysis tools such as OLAP integration with Excel 2000. From a development perspective, Office 2000 has an integrated common development platform, Visual Basic for Applications (VBA), which makes creating and deploying worldwide enterprise solutions more efficient.

The TEI analysis estimates these optional benefits to increase RPR's organisational productivity between 16 and 25 per cent. The exact value of the productivity gains are determined when RPR decides to upgrade from Office 4.3 to either Office 97 or Office 2000 with those Office 2000 features implemented. If these features are implemented within the first year, RPR will realise the greatest business return - 25 per cent increase in business productivity. However, if RPR delays implementing these optional features until the second year, the additional organisational productivity gains will be approximately 16 per cent. These features are treated like financial options: if they are never deployed during the Office 2000 life cycle, they expire and will have no value.

Clear value from Office 2000

TEI expands beyond traditional cost analysis to measure benefits, flexibility and risk, by assessing the overall financial impact of a specific technology. The TEI methodology, which for this analysis used RPR's data as inputs, quantifies the impacts of technology changes on all areas of an organisation by measuring the estimated changes to the environment, not the absolute value of the technology.

A key benefit of the TEI methodology is that previously "intangible" benefits can be made tangible through a process of defining, benchmarking, and valuing these benefits based on real options modelling. The TEI analysis also shows why flexibility and risk are important to consider when conducting business benefit analyses. Giga's option valuation methods are based on widely accepted financial modelling techniques. For example, with Office 2000, the TEI calculations estimated that RPR's Internal Rate of Return could vary between 134 and 333 per cent depending on which Office 2000 features are utilised and when these are implemented. Critical to RPR realising these returns is the timing and execution of implementing these features.

The analysis demonstrated that there was greater economic value for RPR to deploy Office 2000 in one deployment cycle, rather than incrementally deploy each business unit and wait for the business unit to adopt the technology before deploying the subsequent business units.

When presented with the Office 2000 TEI analysis, Carlyle Maranhao, RPR IS Global Project Manager for Office 2000, noted, "The TEI methodology is an effective way to create a comprehensive business case. Based on the TEI analysis, we are confidant that Office 2000 will assist us in achieving our IT and business synergy goals." RPR realised that Office 2000 meets their business needs today and enables them to take advantage of future business opportunities.

Finally, RPR clearly identified the stakeholders, their success metrics and strategy for achieving success. This fundamentally aligns people, processes and a new technology in a way that meets overall business needs.

Addressing business concerns

Like all organisations, RPR has both IT and business concerns. The complexity and speed of change in today's global marketplace identify universal problems and opportunities. In particular, after identifying the business drivers, RPR concluded that Office 2000 addresses their primary concerns of:

Information Exchange. RPR is a worldwide company where global configuration and multinational support are vitally important. In addition, document collaboration to facilitate productivity with HMR is critical. Office 2000 consists of a single worldwide executable and true multinational support with consistent worldwide file formats.

Knowledge Management. RPR needs better communication tools along with tools that support richer analysis to help make better decision-making. Office 2000 provides integrated collaboration tools like Office Server Extensions and fully leverages the web content creation with HTML support.

Reduce Desktop Operating Costs. One of RPR's priorities is to reduce IT management and administration costs by having a standard worldwide desktop.

Office 2000 standardisation will reduce deployment and management complexities. It also will reduce help desk support because of self-repairing applications and customisable help.

RPR commits to Office 2000

Office 2000 addresses RPR's business and IT needs. With the TEI analysis, it became quantifiably clear what the potential impact Office 2000 could have on RPR's environment - both from a business and IT perspective. The total potential benefit is estimated at a three-year minimum internal rate of return of 134 per cent. This IRR could be as high as 333 per cent depending upon when various features are implemented.

The TEI model clearly presented RPR with a complete business case for Office 2000. As a result, RPR made the decision to commit to Office 2000 as their worldwide desktop standard. In addition, selected business units have already begun their Office 2000 deployment.

(c) 1999 Microsoft Corporation. All rights reserved.

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