Google Apps, a positive ROI solution to patient care

TVR Communications are the largest provider of interactive patient education and entertainment devices in the United States. With large advances in the healthcare market, competition has increased significantly for TVR in terms of both technological sophistication and pricing. As such, in order to continue to deliver state of the art products whilst remaining cost-competitive, TVR had to find a way to reduce costs in other areas of the business.

Internal communication within TVR had been via traditional methods until 2007, with telephone being the primary communication and collaboration tool within the business. TVR had also been using the same dated Microsoft Exchange email platform since it was introduced in 1999. It was only once this Exchange platform started running out of disk space that TVR began looking at upgrading this system. 

It was found that upgrading the Exchange platform would have been costly, so TVR began investigating cheaper alternatives and arrived at a decision to use Google Apps. TVR had two goals in mind when making this decision: 

1. Reduce costs associated with licensing and hardware (tangible benefit).
2. Reduce risk of downtime since Google is a reputable firm (intangible benefit).

Not only were these initial goals achieved, but so were several other unforeseen benefits also:

• IT staff productivity was increased as staff no longer had to spend time managing, archiving and backing up email addresses (intangible benefit).

• Collaboration was improved, as employees were able to communicate and work on documents together in real-time even if they were in separate locations. This not only reduced costs, but also improved worker productivity (tangible/intangible benefit).

• Interaction with customers increased, as it provided an additional channel to quickly and efficiently respond to request for proposals (tangible benefit). 

A study by Nucleus Research found that total benefits from this project amassed to $284,000 with 79% of this total being from direct or tangible benefits and 21% from indirect or intangible benefits as seen below.

The costs of $50,787 associated with this project were accrued in three key areas: 

• Software, which was for the most part licensing costs and accounted for 54% of total costs.

• Personnel, all of which were internal employees charged with implementing the applications and migrating data. This accounted for 23% of costs.

• The remaining 23% of total costs was attributed to training employees in how to securely and efficiently use this new platform.

 Nucleus Research calculated an annual ROI for this project, along with a Net Present Value (NPV) and payback period. This is detailed below:

As can be seen, the implementation of Google Apps has been extremely beneficial for TVR with a 500% annual ROI. Even without considering the indirect benefits, this project still resulted in a 380% annual ROI.

Nucleus Research conducted a very thorough ROI analysis and it is difficult to fault. Of course, the estimates of intangible benefit values are subjective and the ROI would change accordingly depending on how much value is attributed to these intangible benefits.

In addition to the ROI calculations, Nucleus Research has provided an NPV calculation using a discount rate or cost-of-capital of 15%. They found this figure to be an astounding $97,244; finance theory suggests that management take on any project that results in a positive NPV as this represents actual value added to a firm. If any more reassurance as to the success of this project is required the payback period for the project was a mere one month!

All in all, this comprehensive ROI analysis conducted by Nucleus Research speaks volumes for the cost saving and productivity enhancing capabilities of emerging social technologies. In a world where the lines between business and technology are becoming increasingly blurred, solid financial analysis of social technology benefits such as this are no longer only beneficial but necessary.

Question for my readers: If you were an analyst charged with quantifying the benefits associated with productivity efficiencies resulting from increased collaboration, how would you go about doing so?