Total Economic Impact


Total Economic Impact is a sort of technique or a methodology that was developed by the Forrester research and this methodology was helpful in improving the decision-making process of the technology of any company. Also, this methodology is also very beneficial as this helps to assist the vendors to provide services to their clients and along with that it makes it easy to transfer the information in regard to the value propositions of their valuable products to their clients in an effective way. Due to all these facilities being availed by this methodology the vendors are more likely to choose this facility in order to get their working even more smooth as well as faster in order to avoid any kind of unusual errors.

What Does Total Economic Impact Contributes?

Total Economic Impact is helpful for the company in order to calculate, then justify and at last realize the tangible value of IT initiatives to the senior level management as well as the concerned key stakeholders and along with that that it also communicates the information to their valuable clients in order to get the better results at the end.

Total Economic Impact Approach

TEI Approach is one of the best methodologies in order to enhance the capability of the company’s technology and its decision-making power along with that this approach consists four main factors and those factors are benefits, costs, risks and the last one is flexibility. Following is the discussion that will clearly explain the TEI approach in regard to these four factors.

  • Benefits

With the term benefits the TEI approach refers to the value that is being delivered by the particular product in order to benefit the company’s business. As under the Total Economic Impact methodology both the measure of costs as well as the measure of profits are placed equally at a same proportion in order to get the proper and realistic information in regard to the benefit given to the company by the particular product. Also, along with the equal treatment of costs and profits there is a provision of performing a complete examination of the effect given by the technology to the whole organization.

  • Costs

In regard to the term cost, the total economic impact approach refers to all of the expenses that are required to provide with the proposed value as well as the benefits of the product. The total economic impact includes the cost category that curates with the incremental costs rather than the existing environments for the costs that are on going and associate with the solutions. Due to this the TEI approach seems to be more reliable and accurate and also, is preferred by most of the vendors in order to make the working process easier and smoother than even.

  • Risks

In regard to the risks term, the TEI approach also compute the unpredictability of the benefits as well as the cost estimates that is given. This can be categorized in the following two ways:

  1. The possibility that the estimations made regarding to the benefits and cost will meet the actual projections.
  2. The possibility that the estimates made regarding to the benefits and costs can be tracked to be over time.

Thus, the Total Economic Impact risk factors are grounded on the basis of “Triangle Distribution”.

  • Flexibility

The term flexibility in the total economic approach methodology constitutes the strategic value which can gained in order to make some additional investment in future on the top of the previous investments that has already made. Also, to enjoy such benefit of making the top off the company has to estimate the present value of the investments that has made previously to get the right as well as accurate return on the total investment.

Wrapping Up

Thus, from the above detailed discussion it can clearly stated that the Total Economic Impact approach is a wide concept that helps in making the decision-making power of the technology of a company better. Along with that this approach curates with the factors like benefits, risks, costs and flexibility that makes it even more reliable and authentic to be used by the vendors for their own benefits and increased their productiveness.


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