Microsoft Catalyst BVA

 
Output Brief
Title of document​ Microsoft Catalyst Business Value Assessment Output

Presentation length ​ 60 min. ​

Audience​ CEO; Business Decision Makers in charge of a Line of Business (COO, CFO, VP of Sales, CMO,…), IT Decision Makers (CIO, Technical Leaders).

• Summarize, share and debrief with the customer the findings of the Microsoft Catalyst BVA workshop to validate the compelling
reasons for change and define the next steps
Purpose​ • Drive acceptance of business outcomes around identified initiatives that could be enabled with Microsoft technology and Partners /
Microsoft Services know-how.  ​
• Create an opportunity for a follow-up with a Solution Assessment & Commercial Proposal to close the loop on the initiatives.​

(think)​ 1. Answers key questions around WHY do anything? & WHY do it now? ​
Customer key 2. Recommendations backed with solid financial arguments and success proof points
takeaways​ 3. Build a case for change for identified initiatives

(feel)​ 1.  I like the personalized engagement, the desire to understanding my business to quantify what initiatives will have the most impact
Customer desired 2.  I trust Microsoft and their Partners are the best positioned to help me transform my business 
mindset​ 3.  Microsoft has the right approach to help me understand how technology can support my business objectives

(do)​ 1.  Build strong relationship with Business and Technical Decision Makers.​
Desired outcomes​ 2.  Define next steps by initiative to go into Solution Assessment and Commercial Proposal.​

Each slide includes guidance to understand how to document the outcomes of the observation and the BVA workshop.​
More information​
Microsoft sellers: please share this document with your customer leveraging Seismic from Opportunity in MSX to monitor consumption
Microsoft Business
Value Assessment
Output Template

July 2020
© Copyright Microsoft Corporation. All rights reserved.
 Background

Business Value Assessment

• Executive Summary

Agenda •
•
Discovery Findings
Business Value Map
• Benefits Summary
• Investment Details

Next Steps
Observation: Interviews / Site Visit
# DATE TIME INTERVIEWER DURATION ROLE NAME WHERE

1 21-Jun 9:00AM John Smith 1 hr VP of Sales Jane Doe Call/Site Visit

7
[Customer] has an opportunity to drive transformation with
Dynamics 365

[Over-arching theme]

Key theme 1 Key theme 2 Key theme 3

• Lorem ipsum dolor sit amet, consectetuer
adipiscing elit. Maecenas porttitor congue
massa. Fusce posuere, magna sed pulvinar
ultricies, purus lectus malesuada libero, sit amet
commodo magna eros quis urna.
• Pellentesque habitant morbi tristique senectus
et netus et malesuada fames ac turpis egestas.
Proin pharetra nonummy pede. Mauris et orci.
• Lorem ipsum dolor sit amet, consectetuer
adipiscing elit. Maecenas porttitor congue
massa. Fusce posuere, magna sed pulvinar
ultricies, purus lectus malesuada libero, sit amet
commodo magna eros quis urna.

• Nunc viverra imperdiet enim. Fusce est. Vivamus • Nunc viverra imperdiet enim. Fusce est. Vivamus
a tellus. a tellus.

Robust platform to support the evolving needs of [customer]

Executive Summary
The simple five-year cash only impact* is summarized in the table below. Sample Simple Example 1

BENEFITS VALUE
Key Take-Aways
Reporting Savings: Boost PM Reporting Efficiency 103,722,684
Reduce Revenue Leakage 155,048,660 Bring in additional benefits of $188M at an investment cost of
Avoid Software License Costs 8,301,000 $28.3M over a 3-year period
IT Maintenance Cost Reduction: Hardware & Operational Costs 9,857,120
Partner Enablement Funds 7,000,000 Increase revenue of $110M over a 3-year period with more than
Total benefits ($) 283,929,464 half being achieved by personalized cross sell and up sell offers to
existing customers
COSTS VALUE
For every $1.0 invested by ABC they will get a benefit of over $7.0
Implementation Services: 8 Months 2,000,000
Microsoft Licensing: Y1 – 26k Users 14,167,296
Microsoft Licensing: Y2 –26k Users 14,167,296 The investment payback is less than 8 months
Microsoft Licensing: Y3 –26k Users 14,167,296
Microsoft Licensing: Y4 –26k Users 14,167,296
Microsoft Licensing: Y5 –26k Users 14,167,296
REMARKS
Total costs ($) 72,836,480
• Staff productivity savings are classified as soft benefits but are still included in the
Business Case calculations as the staff efficiency results in a reduction in future employee
Net benefits ($) 211,092,984 hiring as Robinsons Bank’s revenue and customer base grow
Simple ROI (%) 290 • Hard benefits are assumed to start from month 3 of implementation and soft benefits
are assumed to start from month 7 of implementation with a cost of funds of 10%
• Case period – 5 Years. Implementation period (approx.) – 2 Months. cusotmer wide gross
margin of 8.55% is used

*Note: This table specifically excludes any revaluation for time value of money. It should be reviewed in isolation from the rest
of the business case which may include revaluations for delays, growths, timings, interest costs, etc.
Business Value for Customer ABC Best Case Example 2
Account Management
Payback (excluding cost of funds): 9.75 months

$1,750,000 $109,754 41 months

Non-recurring costs Average monthly costs Review period

$4,080,654 $13,507,910 200%

Average monthly benefits Net Present Value Internal Rate of Return %

9.75 months
Based upon an assumed cost of
 
capital of
NPV Cumulative Discounted Cashflow: $134,909,972

Payback
9.7% per year  

Key Take-Aways

 Provide [customer] with the necessary tools to power increased revenue, win rates & market share

 …

 … *The basis of preparation for Business Value data on this page:

 Partner with Microsoft to drive improved TCO optimization & an ongoing flexible commercial strategic
relationship.
This appraisal has been prepared in order to provide [customer] with the potential
financial implications and investment returns arising from the proposed solution.
It is based upon a number of stages that together provide an assessment of the
investment returns likely to be delivered as a result of project acceptance. This
assessment is based upon information and explanation from [customer] and is
indicative only. It is therefore not a part of the contractual offer from Microsoft.
Key discovery findings from BVA Workshops
Identified Business Challenges & Key Impacted Business Scenarios XX Alignment with Envision Workshop Output

“this is a verbatim “this is another Key Feedback themes

comment” verbatim
comment” Challenge Theme 1

Single Source of Truth

“this is a verbatim “this is a verbatim Challenge Theme 2

comment” comment”
Automated data analysis and suggestions of
actions based on client critical life events

Challenge Theme 3
“this is a verbatim “this is a verbatim
Focus staff on value creation activities and
comment” comment” away from the inefficient tasks caused by
obsolete systems
 Business Value Map How to use:
1. Begin by capturing Strategies that
GOALS AND STRATEGIES TACTICS AND ENABLERS BENEFIT MEASURES CAPABILITIES relate to each of the 4 Value
Pillars
(CxO stakeholders) (Manager stakeholders) (Manager stakeholders) (IT stakeholders)
2. Next, pick a tactical action that
will support these Strategies
 All tactics must contain a
verb
Grow revenue through… By this observable action… Resulting in quantifiable key Supported by these solution  Some tactics can support
performance indicators… capabilities… multiple strategies

3. Then choose a Key Performance

Indicator (KPI) that measures the
tactic’s impact
 KPIs should be observable &
Grow Revenue specific

Value Proposition 4. Identify the Capabilities that most

clearly support the Tactics

Each final Value Proposition should fit

into the number sentence:
“We will [goal] through [strategy] by
[tactic] resulting in [KPI] as supported by
Reduce costs through… By this observable action… Resulting in quantifiable key Supported by these solution [capability]...”
performance indicators… capabilities…
These 4 Value Propositions form the
basis for benefit quantification in your
business case

Reduce Costs
VALUE PILLARS

Value Proposition Strategy Examples

5. Grow revenue through:
1. Order size (up-sell)
2. New customer acquisition
3. Wallet share (cross-sell)
Transform through… By this observable action… Resulting in quantifiable key Supported by these solution 4. New markets
performance indicators… capabilities… 6. Reduce costs through:
1. Technology spend
2. Marketing activities
3. Payroll (headcount)
4. Non-selling activities
Transformation
Value Proposition 7. Maintain market share through:
1. Competitive differentiation

Tutor
2. Brand perception
3. Customer retention

work ial
4. Customer mix

8. Mitigate risk through:

shop
1. Legal exposure
Mitigate risk through… By this observable action… Resulting in quantifiable key Supported by these solution 2. Regulatory compliance

form
3. Investor confidence
performance indicators… capabilities… 4. Business predictability

at
Mitigate Risk
Value Proposition
[Customer] – Business Value Summary - DRAFT
GOALS & STRATEGIES TACTICS & ENABLERS BENEFIT MEASURES CAPABILITIES
Increase Revenue /
Performance

Transformation

Reduce Costs

Custo
mer
-facin
Manage Risks
feedb g
a
form ck
at
Business Value Summary – Benefits only
Increased Revenue per Reduced Customer Increased Customers
Customer Attrition Gained
Best-practice customer Consistent customer Savings based on reduced non-
engagement with single experience with omni-channel value-add tasks, task
customer view and efficient engagement, efficient case automation and platform
process management management consolidation
Annual Benefit Annual Benefit Annual Benefit
$ USD $ USD $ USD
2,5% uplift in income per Customer Income generated from 5% reduction in customer losses Income generated from 5% increase in gained customers

Staff Efficiencies

IT Platform Consolidation
Reduction in applications…
Assumptions: Based on data from …
Benefits Details Sample Simple Example 1

Quantified Benefits Summary Year-on-Year View

Business Metrics Year 1 Year 2 Year 3

Invoicing Automation $800,000 $800,000 $800,000

FTE Cost Avoidance $600,000 $600,000 $600,000

  Better Procurement Margins $1,400,000 $1,400,000 $1,400,000

Systems Retired $300,000 $300,000 $300,000

Days Sales Outstanding $200,000 $200,000 $200,000

Annual Benefits $3,300,000 $3,300,000 $3,300,000

BVA Benefit Summary Best Case Example 2

Average Monthly Benefits

Margin Visibility Asset Management Better Forecasting – Reduce Inventory Reduce Haulage IT Maintenance Cost Process Time
Improvement Cost Reduction Control Inventory Holding Costs Reduction – SAP Savings

$104,801 $75,250 $21,299 $21,299 $19,297 $11,875 $10,515

Associated Intangible / Strategic Benefits

<Ease of scalability <Single source of truth
<Improved reputation <Improved contractor <Improved employee
across geographies and & improved data
and brand> engagement> engagement>
other BUs> quality>

NPV IRR Payback

$<4,171,033> <35.2>% <38> Months
6,000,000 40 10,000,000

8,000,000

E E
4,000,000 35

LE L L
30 6,000,000
2,000,000

P MP P
4,000,000
0 25

M M
$

0 10 20 30 40 50 60 2,000,000
-2,000,000 20

A A

$
A
0

X EX
-4,000,000

EX
15
0 10 20 30 40 50 60

E
-2,000,000
-6,000,000 10
-4,000,000
-8,000,000 5
-6,000,000
Months
0
-8,000,000
© Microsoft Corporation Dynamics 365
%
Months

NPV Cumulative NPV Monthly DCF

Investment Details
License & Implementation Summary Year-on-Year View

  Subscription Quantity Pricing Annual Subscription

Cost Type Year 1 Year 2 Year 3 Monthly ($) Annual ($) Year 1 Year 2 Year 3

Dynamics 365 for Sales 220 300 720 $106.48 $1,277.76 $281,107 $383,328 $919,987

Dynamics 365 for Customer Service 260 510 710 $106.48 $1,277.76 $332,218 $651,658 $907,210

  Implementation Cost          $2,100,000     

Annual Total 480 810 1,430     $613,325 $1,034,986 $1,827,197

Average Cost per User (per Year)           $1,278 $1,278 $1,278

Moving Forward
Validate Output

Detailed Solution Assessment

Solution Demonstration

Agree on Commercial Construct

© Copyright Microsoft Corporation. All rights reserved.