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Forrester Tei
Forrester Tei
Forrester Tei
Of TrustArc
Cost Savings And Business Benefits
Enabled By TrustArc
MAY 2022
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Benefits (Three-Year)
CASE STUDY
Employed four fundamental elements of TEI in
DISCLOSURES
modeling the investment impact: benefits, costs,
flexibility, and risks. Given the increasing
Readers should be aware of the following:
sophistication of ROI analyses related to IT
This study is commissioned by TrustArc and delivered by
Forrester Consulting. It is not meant to be used as a
investments, Forrester’s TEI methodology
competitive analysis. provides a complete picture of the total
Forrester makes no assumptions as to the potential ROI economic impact of purchase decisions. Please
that other organizations will receive. Forrester strongly see Appendix A for additional information on the
advises that readers use their own estimates within the
framework provided in the study to determine the
TEI methodology.
appropriateness of an investment in TrustArc.
Total Benefits
Present
Ref. Benefit Initial Year 1 Year 2 Year 3 Total
Value
Reduced cost of compliance with
Atr $0 $259,674 $259,674 $259,674 $779,022 $645,771
privacy laws
Reduced cost to prove compliance and
Btr $0 $33,138 $33,138 $33,138 $99,414 $82,409
support audits
Ctr Reduced cost of privacy incident $0 $1,209,600 $1,209,600 $1,209,600 $3,628,800 $3,008,096
At Reduced cost of compliance with privacy laws A3*A4*A5*A6*A7 $0 $273,341 $273,341 $273,341
REDUCED COST TO PROVE COMPLIANCE AND Risks. The results may vary based on the following:
SUPPORT AUDITS
• The organization’s ability to dedicate sufficient
Evidence and data. Forrester’s internal research hours to internal audits.
indicates that implementing privacy management
platforms helps organizations reduce the cost to • The budget available for external audits.
prove compliance and support audits. This means • The organization’s ability to use TrustArc
that the time of internal employees and external efficiently to reduce cost to prove compliance and
teams to audit privacy compliance is reduced. support audits.
Modeling and assumptions. Forrester assumes the
following about the financial model: Reduced effort to prove
• External costs for privacy audits are $80,000 compliance in audits
annually.
Forrester
B3 External audit cost $80,000 $80,000 $80,000
research
Forrester
B4 Reduction in effort as a percentage 35% 35% 35%
research
Bt Reduced cost to prove compliance and support audits (B1*B2+B3)*B4 $36,820 $36,820 $36,820
FLEXIBILITY
The value of flexibility is unique to each customer.
There are multiple scenarios in which a customer
might implement TrustArc and later realize additional
uses and business opportunities, including:
Total Costs
Ref. Cost Initial Year 1 Year 2 Year 3 Total Present Value
Annual fees paid to
Dtr $264,500 $264,500 $264,500 $264,500 $1,058,000 $922,272
TrustArc
Implementation and
Etr ongoing management $46,000 $276,000 $276,000 $276,000 $874,000 $732,371
costs
Total costs (risk-
$310,500 $540,500 $540,500 $540,500 $1,932,000 $1,654,643
adjusted)
D1 Annual subscription costs for TrustArc Interview $170,000 $170,000 $170,000 $170,000
Dtr Annual fees paid to TrustArc (risk-adjusted) $264,500 $264,500 $264,500 $264,500
IMPLEMENTATION AND ONGOING Risks. The fees paid to TrustArc may vary depending
MANAGEMENT COSTS on.
Evidence and data. The interviewee reports that the • The scope and size of the organization’s needs.
ongoing management costs for TrustArc are rather
• Whether or not the organization wants to pay for
fair considering the size of the interviewee’s
a certification that demonstrates it meets the
organization.
TrustArc privacy practices and criteria. This can
Modeling and assumptions. Forrester assumes the be in the form of a seal that is displayed on an
following about the financial model: organization’s website.
• The interviewee’s organization has four internal Results. To account for these risks, Forrester
resources dedicated to the implementation of adjusted this cost upward by 15%, yielding a three-
TrustArc for the duration of one month. year, risk-adjusted total PV of close to $732,400.
E4 Fully loaded annual salary for IT managers TEI standard $120,000 $120,000 $120,000 $120,000
Et Implementation and ongoing management costs (E1*E2/12+E3)*E4 $40,000 $240,000 $240,000 $240,000
$2.0 M
$1.5 M
-$1.0 M
Initial Year 1 Year 2 Year 3
ROI 126%
The initial investment column contains costs incurred at “time The breakeven point for an investment.
0” or at the beginning of Year 1 that are not discounted. All This is the point in time at which net
other cash flows are discounted using the discount rate at the benefits (benefits minus costs) equal initial
end of the year. PV calculations are calculated for each total
investment or cost.
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.
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.