Make a Business case for O365

Implementing Office 365 or Microsoft 365 requires a significant investment. Licenses, technical implementation and of course Business Change and continuous support. Making a Business Case is essential to identify where Office 365 can bring value, benefits, a Return on Investment (ROI). So let me give you some tips to get started.

Who should be involved?

First of al (top) management to set the objectives. These will indicate where you need to achieve the ROI. Secondly ICT to help you to calculate the required implementation budget and licenses as well as to help you to identify and quantify the ICT benefits. Thirdly, Business stakeholders to help you to identify and quantify the Business benefits but also the required change budget. And finally, Finance experts. They need to validate and critic the financial estimations of both investments and benefits. Making a Business Case is an iterative process where you adapt and learn during the process. So don’t be afraid to review and change, both assigned budgets as well as anticipated benefits.

How to start? Answer: with iteration 1

The picture below shows you a high level example of an O365 business case. In your first iteration, you should

  • Try to quantify the investments and costs relatively accurate. In most cases, this will be the easy part of your business case financial calculation. In the example below, you fill in the left column.
  • Make a first inventory of ICT and Business benefits. The quantification can be done during your second iteration. It is important that you can associate the benefits with the objectives of the management.

Iteration 1 gives you an investment budget, validated by all actors involved. And a first discussion on the benefits to achieve.

Iteration 2…

We focus on the benefits (right side of the example table above). In general, there are three main areas of benefits:

  • The Business benefits should count for most ROI, obviously.
    • They are related to the modern workplace, to productivity gains, to innovation and responsiveness… etc. The difficulty here is to quantify these benefits.
    • Benefits achieved by Initiation or support of  the cultural change towards digital transformation or New Ways of Working (NWOW).
    • Benefits to (business) process improvement. Make processes paperless, faster. Integration with other applications may be required.
  • The ICT benefits
    • Total Cost of Ownership (TCO). If Office 365 replaces current on-premises technology, you need to calculate the financial benefit this will give. You no longer need hardware, licenses and support teams for the “old” applications. In my experience, this financial benefit could be significant and can be measured easily.
    • Vendor Consolidation. Office 365 and certainly Microsoft 365 has a broad functional spectrum. This will help you to avoid spending additional budgets for Mobile management and security/compliancy solutions. This aspect is crucial when you still need to decide if you go forward with Office 365 or not.
  • Compliancy and Security
    • Depends on how far you are/were before starting with O365. You will have a security service (or CSO). So this will also require an investment and run budget. But if you have already a Security Office, then O365 may give you a lower TCO.
    • The benefits will be mainly related to risk management and mitigation.
    • If this aspect of the business case is very abstract or obscure to you, you can postpone it to a later iteration. However, you will need to calculate it.

Note that we have two categories of benefits. The Hard benefits are (easier) to quantify and measure. For example, Skype can reduce travel expenses of employees. The Soft benefits are quantifiable, but may be difficult to measure. Soft benefits typically require additional actions, like management guidance, cultural change actions… Note also that you will have benefits that you can not easily quantify. An example of this is that you are forced to follow technology trends and evolution. Try to describe such unquantifiable benefits in detail. It will help to understand, to apply and to evaluate.

Iteration 2 gives a more detailed and validated business case with investments/costs on one side and benefits on the other. Even if some aspects are still not clear or finished, you should have a first financial review with Finance experts now. The Business Case could then be validated for a first time by the management.

Next Iterations…

Depending on what you have achieved in the previous iterations, you continue to review, detail and adapt the business case. In my experience I advice to review -in any case- each 6 months, certainly during the first 2 years of your O365 implementation.

Ask help from…

  • Microsoft: If you have a good contact with Microsoft, do ask help from them. However, make your own business case Excel and calculation. Use the input of Microsoft to qualify and quantify costs and benefits.
  • Your O365 implementation partner. Your partner will probably have been involved in business cases at other companies. So any input is valid. The remark of using your own Excel and calculation, however, remains also here important.
  • Financial experts. If you have internal or external Financial consultants, with business case experience… of course they can help.
  • If you know other companies (partners, competitors) that have implemented O365, ask them… They will answer you with a real live experience.
  • And yes, also Connect365 can help… what did you expect? contact via