Making the Business Case for Enterprise Agreement Services

By Paul Friesen

Let’s start with the basics of an Enterprise Agreement. The Microsoft® Enterprise Agreement is designed specifically for an organization if they have 250 or more desktop PCs and anticipate that Microsoft technologies may be a significant part of technology and application solutions (e.g. desktop operating system and productivity applications, business applications, and servers) to serve their business needs. Each Enterprise Agreement enrolment period is a three-year term with an annual price per desktop, providing the organization with a defined amount of time that the terms and prices of the purchasing relationship with Microsoft will remain consistent for all products covered in the initial order. This gives the organization the ability to plan and budget for software license purchases up to three years in advance. Each enrolment has the option for either a one- or three-year renewal term.

However, are you getting the most of out your Enterprise Agreement? Often organizations ask this question and others such as, how will these set of software features help me with meeting my business goals and, am I double-paying for capability or how can I measure the success of these new software capabilities?

Creating the implementation business case and roadmap

Often, the first step in positively answering these questions is to engage a consulting firm to provide Enterprise Agreement Services (EAS). EAS help companies maximize the value of their software purchased under their Enterprise Agreement in several ways.

By initially inventorying existing organizational IT capabilities and anticipated future IT capabilities and overlaying them with the capabilities of the Microsoft software and future product roadmaps included in their Enterprise Agreement

Next, they take strategic business initiatives and align them to the EA investments in a roadmap format, to create a baseline business case and implementation plan.

Finally, in taking the results of the first two activities integrating them with the organizations’ other priorities, and accounting for resource constraints and dependencies. Doing so creates a plan to use the investments in ways which will be of greatest benefit to the organization.

Measuring results

In order to measure the value of the different software investments, a further step is required. Specific key performance indicators (KPI)’s for each new capability must be created in order to measure their material impact to the organization. As an example, to determine the impact of a particular feature when an impacted work process cycle time is reduced by 2 hours as a result of the feature being deployed and this process is repeated 20 times a week, 50 weeks per year, and the cost of labour is $100 per hour, we can immediately determine that the cost reduction the software feature delivers is $200,000 per year. Then, we estimate how many years the feature would be in use (for the sake of example, let’s assume 3 years). This creates an estimated gross cost savings of $600,000. Then, by calculating the cost of implementing the feature (including any net new operating costs) we can establish if the deploying the feature has a positive or negative return on investment. By conducting this kind of analysis across the suite of anticipated features to be deployed, companies often have a clear understanding of the value that they get from their Enterprise Agreement and have a good set of metrics to determine when an upgrade cycle is warranted.

Other considerations

In addition, IT groups are being asked to do more with less, while accelerating deployment timelines, and providing tangible strategic capabilities to the organization. Often organizations emphasize the need to enhance the value of their IT investment by coordinating IT efforts across geographies, reducing complexity and inefficiencies, and improving and maintaining security. To accomplish this, IT groups must think strategically, aligning their initiatives with business goals rather than focusing on individual IT components. These initiatives need to become a strategic asset to their internal and external customers. EA services help give IT group the tools to make these alignments sustainable and inevitability strategic in nature.

In Conclusion

Each organization must evaluate the return on investment of an Enterprise Agreement, by translating software features into easily measurable performance improvements and strategic advantages. Only then can they determine if they are achieving their expected value from that investment.