The Business Case for Microsoft 365 Copilot

A disruptive business technology, generative AI has become a hot topic within the IT and business community, with business leaders and IT professionals seeking to understand its true potential and build a business case for adoption. As developers of Copilot for Microsoft 365, one of the first enterprise-grade generative AI solutions, Microsoft commissioned Forrester to help address this question.

The study which included interviews from eight representatives with early experiences using Copilot for Microsoft 365, and 351 decision-makers from companies considering the implementation of generative AI solutions, such as Copilot for Microsoft 365, with these responses aggregated into a single composite organisation.

Quantified Projected Benefits

In the case of this composite organisation - a 25,000-person, US-based company with an extensive presence in North America and Europe and annual revenues of $6.5billion, the three year-risk adjusted present value (PV) quantified benefits of co-pilot adoption included:

Between a 2% - 4% increase in topline revenues.

Throughout the interviews, and survey response analysis, several go-to-market benefits were noted/projected following the introduction of Copilot for M365 including improved sales, marketing and customer experiences. Some examples of early successes include a 10% increase in the number of sales proposals generated every month with PowerPoint slide creation time reduced by 75% and time to close accelerated by up to 10 days thanks to the integration of Copilot for M365. Respondents also predicted a 16% improvement in time to market for new products and services. Additionally, customer satisfaction gains were expected with employees able to get the right information to customers faster than ever before.

With these benefits predicted to ramp over time as user confidence and the volume of data continues to grow these business benefits are expected to generate revenue growth of between 2-4% (equating to a cumulative impact PV of between $7.5 million -$35.6 million) by the close of Year 3 subject to the transformation rate from low to high respectively.

A 0.15% - 0.7% reduction in total expenditure.

Enabling organisations to achieve internal and external operational efficiencies while delivering employee time savings, users and prospective users of Copilot for M365 predicted a direct improvement to bottom-line financial performance post-solution implementation. Some of the most common time savings noted internally included a time saving of 25 minutes generating post-meeting recaps, savings of up to 1 hour per day writing and reading emails and savings of more than 1 hour per week when searching for information. For content-heavy roles, additional time savings were noted in tasks centred around content creation. Improved data analysis further improved cost savings with respondents expecting an average reduction in supply chain costs of 5% and a decrease in agency or professional service costs in areas such as data analysis, consulting, IT, administrative support and graphic design.

Applying the research findings to the composite organisation (with an assumed 7.8% baseline net margin) a total cost reduction of up to 0.7% was noted (0.15% for low levels of transformation up to 0.7% for high levels of transformation), yielding a three-year projected PV ranging from $37.6 million - $56.7 million and a net-margin increase from 8.12% (low) to 8.45% (high).

30% decrease in new-hire onboarding times.

As discussed in more detail in the unquantified benefits section below, the introduction of Copilot for M365 contributes to improved employee satisfaction and company culture with these benefits along with the time savings offered by AI technologies resulting in an acceleration in new-hire onboarding times of up to 30%, a reduction that when modelled to the composite company equated to a three-year PV yield of between $946,000 - $2.1 million. Factors driving this reduction include reducing the workload of existing employees to facilitate the time required for training new hires and helping new hires better shift through, analyse and interpret the vast volumes of data associated with company onboarding.

Unquantified Benefits

Additional benefits, which could not be quantified were noted, with these benefits including:

Improved diversity, equity and inclusion (DEI)

By harnessing the power of generative AI to support content creation, interviewees anticipated the ability to reduce inherent biases with Copilot for M365 pulling from more diverse experiences than an average employee may think of themselves.

Greater work-life balance

With Copilot for M365 helping employees free up time through the reduction of mundane and frustrating tasks, respondents believe the solution can help support employees in achieving their work goals faster than ever before, acting as a virtual assistant to help employees brainstorm, create content and analyse data across the different systems they use day to day.

Compliance and security

With many employees seeking to harness the potential of generative AI technologies to support their work goals, Copilot for M365 helps organisations reduce the risks associated with Shadow IT including the potential leak of proprietary information. With Copilot, leadership remain confident that the data stays within the organisation's tenant.

Collaboration without Barriers

For global organisations working across geographies and languages, communication barriers can have a detrimental impact on collaboration. Helping bridge this language barrier through the provision of AI insights to support phrase construction and the reduction of grammatical errors, tools such as Copilot for M365 can support greater collaboration and more diverse contributions to projects.

Creative Problem-Solving

By connecting data from multiple sources - Copilot can draw from a greater pool of information than the average employee would be able to draw from - Copilot can help improve creativity in terms of content creation and problem-solving processes. By bringing together information from multiple data sources and offering insights from this data, AI solutions can help employees explore solutions with a fresh perspective and even greater insights than ever before.

Return on Investment

To conclude the research, a return on investment analysis was conducted taking into account the current license cost of $30 per user per month, with the licensing costs adjusted by 5% to account for potential risks such as additional costs which may apply where organisations do not currently have the Microsoft 365 E3 or E5 licenses. Additional implementation costs based on respondent feedback were included such as professional services costs for Copilot implementation, internal labour required to support implementation and solution management, with a 20% cost adjustment of these costs factored in to allow for variances in organisational readiness and the level of data clean up required. Based on these calculations the projected return on investment for the composite organisation ranged from 112% - 457% over the same three-year period.

Set your business up for Copilot success with our on-demand "AI Readiness - Copilot for M365" webinar series.

Roisin McLaughlin, Marketing Director Aug 30, 2024