Overall Solution Cost
Nucleus analyzed five key areas to quantify the total 3-year costs associated with a portal deployment: software, hardware, personnel, consulting, and training.
The software investment of portal customers in this analysis varied widely. The largest software investment, made by a Plumtree customer, was for an initial license of $1.25 million for a global enterprise license. For many SAP customers, there was effectively no software license investment because the SAP portal licenses were included as part of an overall SAP license deal. The average license maintenance rate for Plumtree customers was 16 percent, and the average for IBM customers was 17.5 percent.
The hardware investment of portal customers ranged from nothing for companies that leveraged existing hardware to support their portal deployment to $1 million for one global deployment. Average/median costs were $125,400/$50,000 for Plumtree, $105,000/$15,000 for IBM, and $95,056/$10,000 for SAP.
The consulting investment of portal customers ranged from nothing when internal staff performed the deployment to $1.2 million for one SAP customers global portal deployment. In some cases, companies did not make a separate consulting investment or their consulting fees were bundled in the license contract. Average/median costs were $272,250/$60,000 for Plumtree, $31,000/$3,000 for IBM, and $338,000/$63,000 for SAP.
The average cost of personnel to deploy the Plumtree portal was $299,211, and the median cost was $90,000; the average cost of personnel to support a Plumtree portal for three years was $1.02 million, and the median cost was $540,000. The average cost of personnel to deploy the IBM portal was $42,225, and the median cost was $45,000; the average cost of personnel to support an IBM portal for three years was $402,300, and the median cost was $202,500. The average cost of personnel to deploy the SAP portal was $188,864, and the median cost was $90,000; the average cost of personnel to support an SAP portal for three years was $394,875, and the median cost was $270,000.
Most companies made a minimal investment in training to support the portal. For Plumtree customers, the average training cost was $38,018, and the median cost was $10,817. For IBM, the average training cost was $4,543, and the median cost was $0. For SAP, the average training cost was $82,091, and the median cost was $21,635.
Nucleus also explored the cost per user to deploy and support a portal over a 3-year period and found Plumtree had the highest average cost per user at $2,813 for three years, followed by SAP at $1,945 per user and IBM at $1,063.
A number of SAP portal customers that had not achieved a positive ROI pursued their portal strategy as part of a broader SAP strategy and thus had no specific goals or return objectives for the portal itself. While the perception was that the portal was free because it was bundled in a larger software investment, the other supporting costs associated with the portal drove a negative return on investment. The more closely a portal is tied to an underlying data source or application, the more difficult it is to integrate with other data sources.
Even if the relative cost of a project is small, if not enough benefits are realized, the return on investment will be negative. Nucleus found in many cases that portal projects that delivered a less-than-positive ROI did so because companies simply didnt achieve the benefits they expected. Many customers that didnt achieve positive ROI also made simple but common mistakes that delayed or hampered returns that would lead to a positive project.
Each portal strategy presents a different cost structure, and in most cases, SAP was simplest and cheapest to deploy in a mostly SAP environment. However, one SAP portal customer found that portal performance and development challenges limited its ability to deliver a positive ROI to users.
For many portal customers, a cost-effective means of integrating content was a challenge they discovered during deployment. Rather than slow the project or have cost overruns impact the ROI, one Plumtree customer let budget dictate what content would be included in the first launch of the portal and integrated the additional content later as resources permitted. For IBM customers, increased personnel time sometimes affected the deployment because of a lack of clear and detailed product documentation or knowledgeable staff.
The portal with the lowest total cost of ownership is not necessarily the best choice for an organizations bottom line. All the vendor portal solutions profiled in this report produced a positive ROI for a number of customers interviewed by Nucleus Research.
Plumtree customers rated the highest in terms of ROI and in on-time, on-budget deployments even though the costs of a Plumtree deployment were greater than those for the other two solutions. IBM customers fared well too, with many companies getting significant returns. Many SAP customers deployed free or nearly free portal licenses with little consideration for how the SAP portal would deliver benefits. SAP customers considering a portal investment today should evaluate if and how the SAP portal can provide value beyond providing simpler access to SAP data. A SAP portal can deliver value when companies treat the portal like any other investment and carefully assess the benefits and deployment strategy before beginning a deployment.
Rebecca Wettemann directs and manages Nucleus Research's quantitative research team. She has written and presented extensively on the subject of enterprise applications, CRM, collaboration, and integration technology and its impact on business. She is an expert on the financial analysis of technology and is the author of numerous return on investment (ROI) studies and reports. Prior to joining Nucleus, Ms. Wettemann directed IDC's European Collaborative Technologies programs. Ms. Wettemann holds a BS in Political Science and a BA in French from Oklahoma State University and a Masters of Law and Diplomacy degree from the Fletcher School at Tufts University.