Forrester uses this method to judge the financial impact of a technology investment. Buyers apply it to an internal decision. Vendors commission a custom study when they want customer evidence turned into a business case. The model combines costs, benefits, flexibility, and risk, then illustrates Return on Investment (ROI). Studies are marked as commissioned. Forrester keeps editorial control, does not endorse the client’s company or solution, and does not let clients purchase a favorable result.
Four Components of Investment Value
The model has four components. Benefits and costs carry equal weight, so a case can cover the whole organization rather than a cost cut alone.
| Component | What It Captures |
| Costs | Spending required to capture the value, including implementation and ongoing costs. |
| Benefits | Value delivered to the business, given equal weight with costs. |
| Flexibility | Strategic value from a possible later investment built on the initial one. That benefit can be estimated as a present value. |
| Risk | Uncertainty that benefit and cost estimates will meet the original projections and will be tracked over time. |
How a Commissioned Study Is Built
Each study is built from due diligence, independent customer interviews, primary research, and a financial model. Forrester sets the minimums for qualitative and quantitative samples, keeps editorial control, and states only what the data shows. Positive results are not guaranteed.
- Due diligence: The study starts by gathering evidence on the investment before customer results are turned into a model.
- Customer interviews: Independent interviews with organizations that use the product supply costs, benefits, and risks. A quantitative design may also use a survey.
- Composite organization: One composite organization is designed from characteristics of the interviewed organizations. Published findings describe that organization.
- Financial model: Interview evidence is assembled into a model that includes benefits, costs, flexibility, and risk, then risk-adjusted from concerns the interviewees raised.
- Case study: The write-up applies those four components to the composite organization.
In 2022, Siteimprove commissioned a Forrester Consulting study of a composite organization. The figure comes from those interviews and that model. It is not a default result of the method.
The TEI study commissioned by Siteimprove showed Siteimprove’s platform delivered a 275 percent return on investment (ROI) over three years for a composite organization.
Forrester Consulting, Total Economic Impact, 2022
How Risk Changes the Numbers
Forrester risk-adjusts the model before it reports financial results. Readers should treat the figures as modeled results for the composite organization, not as a promise to every buyer.
- Risk adjustment: Benefit and cost estimates are adjusted with a triangular distribution. The adjustment reflects uncertainty that the estimates will meet the original projections and that they will be tracked over time.
- Present value: Future costs and benefits are discounted at a stated discount rate so the study can show their current value.
- Net present value: This is the current value of discounted future net cash flows. A positive result normally supports the modeled investment unless another project shows a higher one.
- Illustrated return: The return figure is the one the risk-adjusted model produces for that composite organization.
