Analysis Document
Task 7
Recommendations to Assist Cost
Recovery / ROI Strategies and
Budget Planning
May 2, 2006
0
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
 Appendix C: Resources for Developing Telework-related Business
Cases
1
This report provides guidance for cost recovery, strategizing return
on investment, and budget planning related to telework
 This report on Recommendations to Assist Cost
Recovery / ROI Strategies and Budget Planning is the
seventh in a series of reports in the Telework
Technology Cost Study
 The overall study has three primary objectives
– Describe the current telework technology
environment
– Estimate the costs of expanding telework
supporting technologies so the infrastructure can
support 25% to 50% of the federal workforce
teleworking
– Provide recommendations on how best to expand
the telework supporting infrastructure
 This report provides a strategic framework and methodology for identifying the value of telework
investments, and thereby enhancing the cost justification and return on investment
 The information in this report will help government executives develop business case analyses that
fully consider the multiple benefits of telework for making investment decisions
2
For this study Booz Allen gathered information from 20 different
federal organizations in 11 Departments and 5 Independent Agencies
 The Booz Allen team conducted interviews, focus groups, and surveys of Chief Information Officer
staff, Telework Program Coordinators, Teleworkers, and Managers of Teleworkers, respectively
 Ten Departments and one Departmental Component participated in the study:
– Department of Agriculture
 Department of Interior
– Department of Commerce
 Department of Justice
– Department of Education
 Department of Transportation
– Department of Health and Human Services
 Department of the Treasury
– Department of Housing and Urban Development
 Department of Veterans Affairs
– U. S. Coast Guard (component of Department of Homeland Security)
 Five Independent Agencies also participated in the study:
– Equal Employment Opportunity Commission
 National Science Foundation
– General Services Administration
 Securities And Exchange Commission
– National Aeronautics and Space Administration
3
This report presents three sample business case analyses that
could be used in an agency’s investment process as project
managers try to fund various telework initiatives
 For this report, three sample business case analyses (BCAs) were developed
– One in-depth BCA with detailed costs, benefits, and risks. It also included a cost justification
and return on investment (ROI) analysis
– Two high-level BCAs with detailed costs and high level benefits and risks
 The Capital Planning and Investment Control (CPIC) process and Value Measuring
Methodology (VMM) value factors were used to outline and develop the BCAs
 Additionally, this report provides resources that project managers can use to develop their own
telework-related BCAs
– Cost data from deliverables two and five were consolidated for easy use by the reader, e.g.
unit costs, web-based application development costs, server capacity guidelines
– A guide explaining how to use the cost data to build a cost estimate for a telework BCA or
telework funding requests is included
– An inventory of risks and benefits typically associated with telework initiatives is provided in
the Appendix
– An explanation for how to tailor the example BCAs for their organization (e.g., an agency
can add or subtract costs of components from sample BCAs as appropriate, if an agency
provides more or less than is included in the BCA examples)
4
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
 Appendix C: Resources for Developing Telework-related Business
Cases
5
The information for this report was distilled from other data
gathering and analysis that was previously performed for this
study and from business case development best practices
Data Sources
Detailed Reports
Development of a
Series of Reports on
Telework Technology
and Related Costs
• Conducted interviews with CIOs
and other IT staff members to
obtain information about the
current status of the telework
infrastructure and plans for
enhancement
• Several reports in this study have
established the technologies,
costs, and enhancement plans
required for telework expansion
• Task 2, Task 3, and Task 4
specify the technology
components needed for
scalability
• Task 2 and Task 5 detail the
costs required for recommended
technology enhancements
• Task 6 and Task 9 incorporate
the technology and cost
requirements from the other
tasks and provide
recommendations for initiating
and implementing telework
program enhancement and
expansion plans
Detailed Synthesis of
Findings to Develop
Sample Cost Recovery
/ ROI Strategies
High-Level Data Synthesis
• Conducted focus groups with
Telework Program Coordinators
to obtain information about
telework program history and
current state, technology issues,
policy issues, and plans for
expansion
Detailed Data Analysis
Data Collection From
Three Sources in 16
Government
Organizations
• Administered surveys to
teleworkers and managers of
teleworkers to obtain information
about telework technology
availability, usage, and
performance
High-Level Data Synthesis
• Information about costs, benefits and risks
associated with telework investments
• Conducted discussion sessions with
telework and technology experts to evaluate
potential cost reduction and cost recovery /
ROI strategies
• Used frameworks of the Capital Planning
and Investment Control (CPIC) process and
Value Measuring Methodology (VMM) value
factors to organize and develop sample
business cases analysis (BCA)
• Estimated costs and benefits associated
with sample telework investments that bring
agencies to the “basic” and / or “ideal”
levels for Home Office, Services, and
Enterprise solutions defined in Task 4
• Developed one in-depth and two high-level
sample BCAs that incorporated cost
estimates, cost reduction and cost recovery
/ ROI strategies, and addressed risk
6
The sample BCAs were developed to bring agencies to the “basic”
and / or “ideal” levels for Home Office, Services, and Enterprise
solutions
Additional
Technology Needed
for Basic Solution
Additional
Technology Needed
for Ideal Solution
BCA 1: Home Office
•Reutilized PCs (no security software)
•Limited peripherals (printer/copier/fax)
•Network interface (broadband router)
•Limited mobile telephone (exec staff
only)
•Security resources (including firewall
and authentication devices)
BCA 1: Home Office
•Laptop & docking station
•Peripherals for all teleworkers
(printer/copier / fax)
•Mobile telephone for all teleworkers*
BCA 1: Home Office
Ideal solution is not covered in BCA 1;
these components are not calculated**
Advanced authentication devices
Collaboration tools (web cam)
PDA devices for all teleworkers
BCA 2: Services
Enterprise connectivity,
•Voice conferencing, mobile telephone
access (exec staff only)
•Help desk support
•Technical training (general)
BCA 2: Services
•Voice communications (calling card)
BCA 2: Services
Residential broadband service
BCA 3: Enterprise
•Secure network access, including
VPN/ firewall solution
•Remote email access, terminal
emulation system, web interfaces
(limited)
BCA 3: Enterprise
•Basic solution is currently in place (no
additional components necessary)
BCA 3: Enterprise
Web interfaces (all admin functions)
Ideal Solution
Technology
Currently in Place*
Basic Solution
Red text indicates the components included in the BCA calculations
* The Task 4 Report listed cell phone, calling card, or additional telephone line as three voice communication options in the basic
solution; in this sample BCA series, a calling card was selected to meet teleworker voice communication requirements
** BCA 1 focuses on funding a “basic” solution only.
7
The Capital Planning and Investment Control (CPIC) process
provides the context for the development of BCAs in the federal
government
 Regardless of the dollar size and
ultimate recipient of a BCA (i.e.,
bureau Office of Chief Information
Officer (OCIO), department OCIO, or
Office of Management and Budget
(OMB)), each BCA must step through
the process outlined in the graphic to
the right
Context for
Sample BCAs
 Each of the sample BCAs in this report
are assumed to be in the “Select”
phase, which is where investments are
developed, submitted and scored
 “Select” phases across government
require each BCA to analyze the
potential value, cost and risk for the
investment in question
8
The Value Measuring Methodology (VMM) is a structured approach
for investment analysis that can be used to evaluate potential
telework infrastructure enhancements…
Sample VMM Outputs:
Sample VMM Framework
Used to Structure the BCAs in this Section:
VALUE
Value Factors
Value Measures
Priority
Metric,
Target,
Scale
Priority
Risk Inventory
RISK
% - impact on costs
Benefits (Present Value)
Reduced Employee Absence Savings
Real Estate Footprint Savings
Employee Retention Savings
Improved Employee Productivity
Total
Narrative
Probability
Risk Level
Degree of Caution
Required
High
Medium
Low
50%
30%
25%
Total
10,862,952
2,538,311
206,493
22,631,151
$36,238,906
Cost Impact
Value
Impact
25%
15%
5%
-25%
-15%
-5%
% - impact on value (benefits)
Hardware
Risk Tolerance Boundary
COST
FY07 Sub Total:
Pre-Risk Total
FY08 Sub Total:
FY09 Sub Total:
Laptop with Docking
Station
Less 80%
Less Cost of Desktop
Sub Total
($1,658)
($326)
$88
Printer / Copier / Fax
Sub Total
$238
$238
$2,072
Peripherals
Total Per
User
$326
…including the evaluation of the three essential factors of decision
making in a structured, quantifiable and repeatable manner
9
For the purposes of these sample BCAs, an abridged version of
VMM’s methodology was employed
Overview of VMM Methodology*
 Cost, value and risk are estimated for one alternative,
instead of the three that OMB’s Circular A-11 requires
for business cases
 Value definition is confined to the “government
financial” value factor only
 Step 1. Develop a Decision-Framework
– Identify & Define the Value Structure
– Identify & Define the Risk Structure
– Identify & Define the Cost Element
Structure
– Begin Documentation
– One of VMM’s key strengths, the quantification of
qualitative benefits (i.e., the other four value factors),  Step 2. Alternatives Analysis (estimate value,
requires a prioritization process that is most effective
cost, & risk)
when completed in an interactive session using an
– Identify & Define Alternatives
appropriate automated tool
– This process should be done at the highest
appropriate level of agency management
 Risk inventory and possible risk mitigation strategies
were defined in lieu of detailed risk analysis
– Assessment of probability and impact would need to
be done in collaborative sessions with technical and
policy staff or representatives of partner agencies
– Only then could its impact on the value and risk
scores be determined
* Only the actions in “bold” were performed in
sample BCAs
– Estimate Value and Cost
– Conduct a Risk Analysis
– On-going Documentation
 Step 3: Pull Together the Information
– Aggregate the Cost Estimate
– Calculate the Return-on-Investment
– Calculate the Value Score
– Calculate the Cost and Value Risk Scores
– Compare Value, Risk and Cost
 Step 4: Communicate and Document
10
The five VMM value factors help identify, define, and quantify the
financial and non-financial benefits of telework investments
Value Factors
Direct User
(Customer) Value
Description
 Value associated with the delivery of highquality, citizen-centered services
 Realization of value in this factor typically
drives the realization of value in all the other
factors
Social (Non-direct  Secondary or indirect benefits directly
User/Public) Value
attributable to the investment under
consideration
 Society benefits anytime the government is a
good steward of public funds
Relevant Telework Benefits
 Enhanced Quality of Work Life – Telework affords employees
flexibility to better accomplish work and non-work responsibilities
 Workforce Improvements – Telework has been found to
increase employee productivity, morale, and retention
 Environmental/Civic Benefits – Widespread telework reduces
traffic congestion and pollution due to fewer daily commuters
 Continuity of Operations – Telework program can be used to
help government work continue during emergencies
 Potential Real Estate Savings – Telework enables reduced
need for office space, resulting in taxpayer savings
Government
Operational/
Foundational
Value
 Value associated with investments in building  Continuity of Operations – Telework program can be used to
up the infrastructure - whether in staff skills
help government work continue during emergencies
or technology - required to accommodate a
 Enhanced Recruiting – Telework is an attractive benefit that
changing environment
gives agencies a competitive advantage in recruiting high-quality
candidates
Government
Financial Value
 Traditional direct cost information used in
 Continuity of Operations – Telework program can be used to
financial return-on-investment ratios
help government work continue during emergencies
 In the past, only this value was quantified and  Potential Real Estate Savings – Telework enables reduced
factored into decision metrics
need for office space, resulting in taxpayer savings
Strategic/Political
Value
 Captures and quantifies the value associated
with advancing organizational and
government-wide initiatives and mandates
 Legislative Compliance – Agencies are required to provide
telework opportunities to all eligible staff
 Continuity of Operations – Telework program can be used to
help government work continue during emergencies
11
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
 Appendix C: Resources for Developing Telework-related Business
Cases
12
This section provides three sample BCAs that seek funding required
to close the gap between the organization’s current infrastructure
and the “basic” or “ideal” telework infrastructure
BCA
Size of Agency
Detail Level of BCA
Technical Investments Covered
 In-Depth:
1.
 Large Agency
(100K Staff)
Home Office  Scaling up to 50K
teleworkers
– Detailed costs
– Detailed benefits
 Increasing from current to basic level of infrastructure for
teleworker-at-home equipment
– Sample risk impacts
– Laptop with software (basic)
– Cost justification
– Printer/copier/fax (basic)
– ROI analysis
2.
Services
3.
Enterprise
 Medium Agency
(50K Staff)
 Scaling up to 25K
teleworkers
 Small Agency
(10K Staff)
 Scaling up to 5K
teleworkers
High-Level:
 Increasing from current to ideal level of infrastructure for
telecommunications services
– Detailed costs
– PDA or cell phone service (basic)
– High-level cost justification
– Broadband service (ideal)
– General discussion of risks
High-Level:
– Detailed costs
– High-level cost justification
– General discussion of risks
Does not include help desk support since the study found
that all agencies currently provide this service
 Increasing from current to ideal level of infrastructure for
enterprise application access
– Web access application development (ideal)
Assumptions
1. Each sample agency’s current level of infrastructure is assumed to be consistent with Scenario B (see Appendix)
2. Agency objective is to close the gap between their current infrastructure to the ‘basic” and / or “ideal” level of telework support
3. Agencies are scaling up to 50 percent of the agency teleworking
13
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
 Appendix C: Resources for Developing Telework-related Business
Cases
14
Implementing a “Basic” Teleworker-at-Home solution for 50,000
employees at an agency with 100,000 staff can yield over $36
million of benefits in a 3-year period
VALUE
Value Factors
Government Operational/Foundational Value
Government Financial Value
Government Operational/Foundational Value
Direct User (Customer) Value
Corresponding Benefits
Reduced Employee Absence Savings
Real Estate Footprint Savings
Employee Retention Savings
Improved Employee Productivity
Key Metrics:
ROI – ~225%, NPV - $20.2 million, Payback – Year 1
Risk Impact:
ROI – ~180%, NPV - $13.9 million, Payback – N/A
Teleworker-at-Home
Components in this
BCA:
•Laptop with Docking
Station
• Combination printer/
copier/fax machine
Risk Inventory
RISK
+5%: impact on costs
-15%: impact on value (benefits)
Risk Tolerance Boundary
COST
$16.0 million: Pre-Risk Total
$16.8 million: Risk-Adjusted
Total
FY07 Sub Total: $5.4 million
FY08 Sub Total: $5.3 million
FY09 Sub Total: $5.3 million
15
An investment of approximately $16 million over 3 years is
required to provide a “Basic” Teleworker-at-Home solution for
50,000 staff at an agency with 100,000 staff
 A 3-year implementation allows for phased
approach over multiple budget cycles and allows all
desktops to be refreshed with laptops
– All estimates are in FY07 dollars
 The acquisition cost of a laptop can be offset by the
current cost of acquiring a desktop
– The approximate annualized cost of a desktop,
including maintenance, is $326
 Since Telework frequency per OPM is one day per
week (or 20%), only 20% of the laptop expense
was charged to the telework initiative
Hardware
Laptop with Docking Station
Less 80%
Less Cost of Desktop
Sub Total
Peripherals
Printer / Copier / Fax
Sub Total
Total Per User
($1,658)
($326)
$88
$238
$238
$326
 The laptop and printer / copier / fax unit costs are
annualized and include refresh and annual
maintenance expense
– Please refer to Appendix B for further detail
on costs
– The remaining 80% of the expense can be
shared by agency cost categories, such as
annual infrastructure and COOP compliance
FY07
Annual Number of New Users
$2,072
FY08
FY09
Total
16,667
16,667
16,667
50,000
$326
$333
$348
N/A
Total Annual Cost (Inflated)
$5,433,333
$5,552,867
$5,799,880
$16,786,080
Total Annual Cost (Present Value)
$5,433,333
$5,303,598
$5,290,853
$16,027,784
Annual Per User Cost*
* Annual costs are inflated per the difference between OMB Circular A-94's Nominal and Real 3-Year Treasury
Interest Rates; costs are discounted per OMB A-94's 3-year Nominal Rate on Treasury Notes and Bonds
16
This approximate $16 million investment can be offset with a
benefits realization of over $36 million over the same 3-year period
 Return on Investment (ROI): 232%
Return on Investment (ROI)*
 Cumulative Net Present Value (NPV): $20.2
million
Total Annual Benefit (Present Value)
$36,238,906
Total Annual Cost (Present Value)
$16,027,784
ROI
 Payback is achieved in Year 1
226%
*ROI is calculated as a savings to investment ratio, which is
consistent with OMB guidance for the Exhibit 300
 In order to be consistent with the cost calculation
methodology, the savings are shared across the
agency in the same manner
– i.e., 20% to telework and 80% to agency
initiatives such as annual infrastructure
upgrades / maintenance and COOP
compliance
Benefits (Net Present Value)
Total Annual Benefit (Present Value)
FY07
FY08
FY09
Total
$11,424,322
$11,151,535
$13,663,048
36,238,906
Total Annual Cost (Present Value)
$5,433,333
$5,303,598
$5,290,853
16,027,784
Net Present Value
$5,990,989
$5,847,938
$8,372,195
20,211,122
Cumulative Net Present Value*
$5,990,989
$11,838,927
$20,211,122
N/A
*Payback is achieved in Year 1 (FY07) when cumulative NPV reaches ~$6.2 million
17
The total amount of financial benefits that could be realized from
implementing the “basic” teleworker-at-home solution is derived
from a number of sources
Benefits (Present Value)
Reduced Employee Absence Savings
Real Estate Footprint Savings
Employee Retention Savings
Improved Employee Productivity
Total
FY07
FY08
FY09
Total
$3,682,483
$3,594,553
$3,585,916
10,862,952
$2,538,311
2,538,311
N/A
N/A
$70,000
$68,329
$68,164
206,493
$7,671,840
$7,488,653
$7,470,658
22,631,151
11,424,322
11,151,535
13,663,048
$36,238,906
See Appendix A for details on how the value of benefits were calculated
 Each type of savings and benefits are based on prior industry research which are referred to in
Appendix A
– The improved productivity calculation is based on a recent study that found teleworkers work on
average 1 additional hour on days they telework
– The increased employee productivity is the largest benefit since it accounts for 50 hours per year
per teleworker, while the reduction of 3 missed work days per year per teleworker accounts for just
24 hrs per employee per yr
 Several of these benefits, such as employee retention, correspond to more than one value factor
VMM Value Factors
Corresponding Telework Benefits
Government Operational/Foundational Value
Reduced Employee Absence Savings
Government Financial Value
Real Estate Footprint Savings
Government Operational/Foundational Value
Employee Retention Savings
Direct User (Customer) Value
Improved Employee Productivity
18
While an actual risk analysis was not performed, this sample BCA
assumes that risk could have a more noticeable impact on the
realization of financial benefits
Narrative Risk
Level
Probability
Cost Impact
Value Impact
High
50%
25%
-25%
Medium
30%
15%
-15%
Low
25%
5%
-5%
Likelihood of
Occurring
Causes Cost to
Increase
Causes Value to
Decrease
 VMM requires that the probability and impact of each risk factor on both cost and value be considered. This
provides analysts with information necessary to determine the interaction between impact and probability and
predict how that interaction will change the value and cost of the investment under consideration
 Examples of risk that could affect the “teleworker-at-home” solution are:
– Technology Issues (e.g., connectivity, performance of legacy client-server applications remotely, and security)
– Access to / availability of IT support
– Difficulties working and communicating with co-workers in the office
– Inflexible agency-based operating procedures
– Too few at-home days utilized for program to be effective
– Participants in telework program are not well suited for working at an alternative work site
 In order to illustrate the impact of risk on cost and value, this BCA assumes that a detailed risk analysis has been
performed with the following outcomes:
– There is a 5% impact (increase) on the total costs: $16.0 million  $16.8 million
– There is a 15% impact (decrease) on total value: $36.2 million  $30.8 million
19
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
 Appendix C: Resources for Developing Telework-related Business
Cases
20
Implementing an “Ideal” Telecommunication Services solution for
25,000 employees at an agency with 50,000 staff can yield over $31
million of benefits in a 3-year period
Value Factors
Corresponding Benefits
VALUE
Government Operational/Foundational Value
Government Financial Value
Reduced Employee Absence Savings
Real Estate Footprint Savings
Government Operational/Foundational Value
Employee Retention Savings
Direct User (Customer) Value
Improved Employee Productivity
Government Operational/Foundational Value
Broadband Savings
Key Metrics:
Total Benefits Realized (Present Value): $31.1 million
RISK*
Risk Inventory
% - impact on costs
Telecommunications
Services
Components in this
BCA:
•Residential
Broadband Service
•Calling Card (for long
distance calls)
% - impact on value (benefits)
Risk Tolerance Boundary
FY07 Sub Total: $5.3 million
COST
$15.6 million: Total Lifecycle
Cost
FY08 Sub Total: $5.2 million
FY09 Sub Total: $5.1 million
*In this BCA, potential risks were identified but their impact on value and cost were not calculated
21
Cost analysis shows that approximately $15.6 million over 3 years
is required for implementation of a “Basic” telecommunication
services solution
FY07
Annual Number of New Users
Annual Per User Cost*
Total Annual Cost (Inflated)
Total Annual Cost (Present Value)
8,334
$634
$5,283,756
$5,283,756
FY08
8,333
$648
$5,399,351
$5,156,973
*Annual costs are inflated per the difference between OMB Circular A94's Nominal and Real 3-Year Treasury Interest Rates; costs are
discounted per OMB A-94's Nominal 3-Year Rate on Treasury Notes
and Bonds
 As detailed in the table at right, the per user cost of $634 is
based on the agency providing a calling card and broadband
access to each teleworker
FY09
8,333
$677
$5,639,535
$5,144,580
Total
25,000
N/A
$16,322,642
$15,585,309
Annual Service Fees
Calling Card
Broadband
Sub Total
Total Per User
$14
$620
$634
$634
 A calling card was selected as the best telecommunication option for several reasons
– Provides practical, inexpensive way for agencies to pay for teleworkers’ long distance charges
– Cell phones may be more appropriate for some teleworkers who work from multiple locations,
but calling cards meet the needs of a typical home-based teleworker
 Broadband access is widely viewed as critical to the success of telework
– Provides faster data communication and enables timely transfer of larger data files
– Provides for both data communications and voice communications, so teleworkers are able to
conduct telephone calls while transferring data
– Allows use of collaboration tools, video conferencing, etc., which can be difficult if not
impossible to use over dial-up
22
Value analysis shows that the $15.6 million investment can be
offset by over $31 million in benefits from a variety of sources
Benefits (Present Value)
FY07
FY08
Reduced Employee Absence Savings
$1,841,168
$1,797,205
Real Estate Footprint Savings
N/A
N/A
Employee Retention Savings
$35,000
$34,164
Improved Employee Productivity
$3,835,767
$3,744,177
Broadband Savings
$4,397,414
$4,292,414
Total
10,109,349
9,867,960
See Appendix A for details on how the value of benefits were calculated
FY09
$1,792,886
$1,269,106
$34,082
$3,735,180
$4,282,099
11,113,354
Total
5,431,260
1,269,106
103,246
11,315,123
12,971,927
$31,090,663
 Nearly $13 million of benefit in time savings related to broadband, which nearly pays for the
investment itself
– Estimates are based on technical performance superiority of broadband, as compared to dial-up
 Over $101 million in financial benefits can be earned by this investment – four-fifths of which is
assumed to be shared agency-wide
– 20 percent to telework
– 80 percent to agency initiatives, such as infrastructure upgrades / maintenance and COOP
compliance
 The potential benefits of this investment all map to one or more of VMM’s value factors, including
– Government Operational/Foundational Value
– Government Financial Value
– Direct User (Customer) Value
23
There are a variety of risks to be considered which could impact
the “telecommunications services” investment
Potential Risks
 Technology Issues (e.g., connectivity, performance of
legacy client-server applications remotely, security, data
security)
 Access to / availability of IT support
 Operational impacts
 Difficulty working/communicating with office workers
 Inflexible agency-based operating procedures
 Too few telework days used for program to be effective
 Supervisor resistance to telework
 Appropriate selection of participants for telework
 Inadequate preparation
 Creation of burden on non-participating employees
 Staff culture / existing expectations
 Resistance by organizational support functions (e.g.,
HR, IT)
 Historical resistance by smaller Federal agencies
Potential Mitigation Strategies
 Senior management leadership
 Comprehensive security planning
 Telework-specific training
 Organize Telework Advisory Group or Program
Management Office
 Assessing the impact Telework has on timekeeping,
compensation, and other issues
 Preparing a written Telework agreement for employees
and managers
 Regularly re-evaluating and modifying the program,
when necessary, to meet changing circumstances
 Designation of appropriate telework coordinator
 Difficulty in measuring results
24
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
 Appendix C: Resources for Developing Telework-related Business
Cases
25
Implementing an “Ideal” Enterprise solution for 5,000 employees at
an agency with 10,000 staff results in $3.4 million of benefits over a
3-year period based on this study’s analysis
Value Factors
Corresponding Benefits
VALUE
Government Operational/Foundational Value
Government Financial Value
Reduced Employee Absence Savings
Real Estate Footprint Savings
Government Operational/Foundational Value
Employee Retention Savings
Direct User (Customer) Value
Improved Employee Productivity
Key Metrics:
Total Benefits Realized (Present Value): $3.4 million
RISK*
Risk Inventory
Enterprise
Components in this
BCA:
•Web-based
application
(Multi-tier Unix-based
architecture)
% - impact on costs
% - impact on value (benefits)
Risk Tolerance Boundary
FY07 Sub Total: $219,000
COST
$219,000: Total Lifecycle Cost
FY08 Sub Total: N/A
FY09 Sub Total: N/A
*In this BCA, potential risks were identified but their impact on value and cost were not calculated
26
Cost analysis shows that $219,000 over 12 months is required to
provide an “Ideal” web-based application solution
FY07
Total
Annual Number of New Users
5,000
5,000
Annual Per User Cost*
$10
N/A
Total Per User Cost
$50,000
$50,000
Labor Costs
$168,960
$168,960
Total Annual Cost
$218,960
$218,960
* Annual costs are not inflated since all BCA costs are provided in
FY07 dollars
 Since the development is assumed to take place over a 12-month
period, all labor costs and hardware purchases are for FY07
 Because of the multiple uses of these investments, only a portion of
the development costs were charged to the telework initiative
– Since telework’s frequency per OPM is 1 day a week (or 20%),
only 20% of the development costs were charged to the telework
initiative
– For example, 20 percent may be associated with telework
– The remaining 80 percent of the expense can be shared by
agency costs such as infrastructure and COOP compliance
Labor Calculation:
4.00
FTEs
per hour cost of typical
contractor web app development
$110
labor
number of months required for
12.00
implementation
total number of labor hours for 4
FTEs for 12 month
7,680.00 implementation period
$844,800 Labor Sub Total
less 80% charged to other agncy
initiatives, e.g. COOP,
($675,840) infrastructure
$168,960 Labor Total
Annual Service Fees
Web App
Less 80%
Software
Annual Licenses
Total Per User
$52
($42)
TBD
$10
 Software and System Administration costs are not included in the
total, because the costs can vary widely due to a number of factors
 Further detail on assumptions and industry guidelines regarding web
application development solutions is provided in Appendix B
27
Value analysis shows that the $219,000 investment can yield
substantial financial benefits of $3.4 million
Benefits (Present Value)
FY07
Reduced Employee Absence Savings
$1,104,744
Real Estate Footprint Savings
N/A
Employee Retention Savings
$7,000
Improved Employee Productivity
$2,301,552
Total
3,413,297
See Appendix A for details on how the value of benefits were calculated
Total
1,104,744
0
7,000
2,301,552
$3,413,297
 Each type of savings and benefits are based on prior industry research which are referred to in Appendix A
– The improved productivity calculation is based on a recent study that found teleworkers work on average
1 additional hour on days they telework
– The increased employee productivity is the largest benefit since it accounts for 50 hours per year per
teleworker, while the reduction of 3 missed work days per year per teleworker accounts for just 24 hrs per
employee per yr
 In order to be consistent with the cost calculation methodology, the savings are shared across the agency in
the same manner
– For example, 20 percent may be associated with telework
– The remaining 80 percent of the expense can be shared by agency costs such as infrastructure and
COOP compliance
 The potential benefits of the enterprise investment all map to one or more of VMM’s value factors, including
– Government Operational/Foundational Value
– Government Financial Value
– Direct User (Customer) Value
28
There are variety of risks that could reduce the overall value of the
“Enterprise” investment
Potential Risks
 Technology Issues (e.g., connectivity, performance of
legacy client-server applications accessed remotely,
security, and data security)
 Access to / availability of IT support
 Efficacy of training
 Operational impacts
 Difficulty working and communicating with office
workers
 Inflexible agency-based operating procedures
 Too few telework days utilized for program to be
effective
 Supervisor resistance to telework program
 Appropriate selection of participants for telework
 Timely coordination with unions
 Creation of burden on non-participating employees
 Staff culture / existing expectations
 Resistance by organizational support functions (e.g.,
HR, IT)
 Difficulty in measuring results
Potential Mitigation Strategies
 Senior management leadership
 Broadband residential services
 Comprehensive security planning
 Telework-specific training
 Organize Telework Advisory Group or Program
Management Office
 Assessing the impact telework has on timekeeping,
compensation, and other issues
 Developing a plan to address the equipment needs of
your organization telework program
 Preparing a written Telework agreement for employees
and managers
 Regularly re-evaluating and modifying the program,
when necessary, to meet changing circumstances
 Willingness of agency to participate
 Designation of appropriate telework coordinator
 Coordination with local unions (when applicable)
 Increased IT support and allocation of resources
29
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
 Appendix C: Resources for Developing Telework-related Business
Cases
30
By clearly articulating the financial and non-financial benefits of
telework, government leaders can make an effective business case
for enhancing the infrastructure and services that support telework
Telework Business
Cases*
Total
Investment
(Millions)**
Total
Benefits
(Millions)**
NPV
Teleworker-at-Home
Solution /
100K staff
$16.0
$36.2
$20.2
~225%
Telecommunication
Services /
50K staff
$15.6
$31.1
$15.1
~200%
Enterprise /
10K staff
$0.22
$3.4
$3.2
~1500%
ROI
 Substantial financial benefits can be realized
by implementing an effective telework
program (see table)
– Reduced absenteeism costs
– Reduced real estate costs
– Reduced recruitment and retention costs
– Improved staff productivity
 Telework IT enhancements do not just benefit teleworkers, they provide IT benefits to all staff
– Improves contingency support
– Increases organization flexibility and ability to adjust IT infrastructure and applications to meet
changes in IT needs
– Improves communication between staff and between staff and people in other organizations
– Easier to use applications with a common interface
– Automation of administrative processes
 Other non-financial benefits of telework
– Compliance with federal mandates
– Increased workforce diversity
– Reduced traffic congestion and pollution
31
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
 Appendix C: Resources for Developing Telework-related Business
Cases
32
Appendix A: Benefit Savings Calculations
BCA 1: Telework programs can save organizations 63% of their
absenteeism costs
3
24
$46.03
$1,104.74
8,333
$9,205,839
($7,364,671)
$1,841,168
$5,523,505
# sick days / snow days saved
# hrs saved
composite telework hourly rate
per person annual savings
# of teleworkers annually added
annual savings
less 80%
annual telework-specific savings
total (3-yr) telework-specific savings
 In a study released in 1999, the International Telework Association and Council (ITAC) concluded that
healthy employees often miss work due to family or personal obligations that can only be met during the
business day
– Teleworkers are still able to get some work done, even on days when they have appointments to
attend
– Employers can save 63% of the cost of absenteeism per teleworking employee, or $2086 per
employee per year. Source: Exploring Telework as a Business Continuity Strategy, 2005 WorldatWork
 This calculation assumes that 3 sick days / snow days are saved annually per teleworker
 In order to be consistent with the cost calculation methodology, the savings are shared across the
agency in the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades /
maintenance and COOP compliance
33
Appendix A: Benefit Savings Calculations
BCA 1: Substantial real estate savings can be gained through
telework and hoteling programs
 For the purposes of this
example, it is assumed that in
Year 3 (FY09), the agency’s
lease is up for renewal
– Because half of its staff now
teleworks at least once a
week, the agency can reduce
its per person (and hence
overall) square footage
allocation by 10%
$34
230
10%
23
8,333
$6,516,406
($5,213,123)
$1,303,283
$1,303,283
Rentable square feet per person rate for Washington, DC Class B
office space
Suggested rentable square feet per person, per GSA Office of
Governmentwide Policy's "Office Space Use" update
% per person reduction in rentable square feet provided
reduced rentable square feet per person
# of teleworkers annually added
annual savings
less 80%
annual telework-specific savings
total (realized in Year 3) telework-specific savings
 The cost per rentable square foot of Class B office space in Washington DC is $34 per year
– Federal office space typically is classified as Class B
– Class B office space definition: good location, professionally managed, fairly high-quality
construction and tenancy; generally show very little functional obsolescence and deterioration
– Source: Society of Industrial and Office Realtors (SIOR) 2005 Comparative Statistics of
Industrial and Office Real Estate Markets
 To be consistent with the cost calculation methodology, the savings are shared across the agency
in the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure
upgrades/maintenance and COOP
34
Appendix A: Benefit Savings Calculations
BCA 1: Telework has proven to be a valuable employee recruitment
and retention tool, saving employers staffing costs
$7,000
25
$175,000
($140,000)
cost to recruit one employee
# employees retained annually due to telework
annual savings
less 80%
$35,000
annual telework-specific savings
$105,000
total (3-yr) telework-specific savings
 According to a 2003 telework study by the Equal Employment Opportunity Commission (EEOC), their total
cost of recruiting one employee is $7000
– While this figure would certainly vary from agency to agency, this study assumes that the variance would
be minor
– Source: OIG-01-13-AMR Assessment of Reducing Infrastructure Costs Through Increased Use of
Telework FINAL
 In order to be consistent with the cost calculation methodology, the savings are shared across the agency in
the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance
and COOP compliance
35
Appendix A: Benefit Savings Calculations
BCA 1: Studies have shown teleworkers are more productive than
office workers
1.00
50
$46.03
$2,302
8,333
$19,178,832
($15,343,065)
$3,835,767
$11,507,300
# additional hours worked on telework days
total # telework days per person per year*
composite Telework hourly rate
per person annual savings
# of teleworkers annually added
annual benefit
less 80%
annual telework-specific benefit
total (3-yr) telework-specific savings
 In a recent study of its extensive telework program, AT&T found that teleworkers report about one
additional productive hour in each workday spent at home (about a 12.5% increase, approximately)
– Source: Lessons Learned From The Network-Centric Organization: 2004 AT&T Employee Telework
Results
 This calculation assumes that each participating employee teleworks one day per week annually, not
including two weeks of paid vacation
 In order to be consistent with the cost calculation methodology, the savings are shared across the
agency in the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades /
maintenance and COOP compliance
36
Appendix A: Benefit Savings Calculations
BCA 2: Reduced Employee Absence Savings Calculations
3
24
$46.03
$1,104.74
8,333
$9,205,839
($7,364,671)
$1,841,168
$5,523,505
# sick days / snow days saved
# hrs saved
composite telework hourly rate
per person annual savings
# of teleworkers annually added
annual savings
less 80%
annual telework-specific savings
total (3-yr) telework-specific savings
 In a study released in 1999, the International Telework Association and Council (ITAC) concluded that
healthy employees often miss work due to family and personal obligations that can only be met during the
business day
– Teleworkers are still able to get some work done, even on days when they have appointments to attend
– Employers can save 63% of the cost of absenteeism per teleworking employee, or $2086 per employee
per year. Source: Exploring Telework as a Business Continuity Strategy, 2005 WorldatWork
 This calculation assumes that 3 sick days / snow days are saved annually per teleworker
 In order to be consistent with the cost calculation methodology, the savings are shared across the agency in
the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance
and COOP compliance
37
Appendix A: Benefit Savings Calculations
BCA 2: Real Estate Footprint Savings Calculations
 For the purposes of this
example, it is assumed that in
Year 3 (FY09), the agency’s
lease is up for renewal
– Because half of its staff now
teleworks at least once a
week, the agency can reduce
its per person (and hence
overall) square footage
allocation by 10%
$34
230
10%
23
8,333
$6,516,406
($5,213,123)
$1,303,283
$1,303,283
Rentable square feet per person rate for Washington, DC Class B
office space
Suggested rentable square feet per person, per GSA Office of
Governmentwide Policy's "Office Space Use" update
% per person reduction in rentable square feet provided
reduced rentable square feet per person
# of teleworkers annually added
annual savings
less 80%
annual telework-specific savings
total (realized in Year 3) telework-specific savings
 The cost per rentable square foot of Class B office space in Washington DC is $34 per year
– Federal office space typically is classified as Class B
– Class B office space definition: good location, professionally managed, fairly high-quality
construction and tenancy; generally show very little functional obsolescence and deterioration
– Source: Society of Industrial and Office Realtors (SIOR) 2005 Comparative Statistics of
Industrial and Office Real Estate Markets
 To be consistent with the cost calculation methodology, the savings are shared across the agency
in the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure
upgrades/maintenance and COOP
38
Appendix A: Benefit Savings Calculations
BCA 2: Employee Retention Savings Calculations
$7,000
25
$175,000
($140,000)
cost to recruit one employee
# employees retained annually due to telework
annual savings
less 80%
$35,000
annual telework-specific savings
$105,000
total (3-yr) telework-specific savings
 According to a 2003 telework study by the Equal Employment Opportunity Commission (EEOC), their total
cost of recruiting one employee is $7000
– While this figure would certainly vary from agency to agency, this study assumes that the variance would
be minor
– Source: OIG-01-13-AMR Assessment of Reducing Infrastructure Costs Through Increased Use of
Telework FINAL
 In order to be consistent with the cost calculation methodology, the savings are shared across the agency in
the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance
and COOP compliance
39
Appendix A: Benefit Savings Calculations
BCA 2: Improved Employee Productivity Calculations
1.00
50
$46.03
$2,302
8,333
$19,178,832
($15,343,065)
$3,835,767
$11,507,300
# additional hours worked on telework days
total # telework days per person per year*
composite Telework hourly rate
per person annual savings
# of teleworkers annually added
annual benefit
less 80%
annual telework-specific benefit
total (3-yr) telework-specific savings
 In a recent study of its extensive telework program, AT&T found that teleworkers report about one
additional productive hour in each workday spent at home (about a 12.5% increase, approximately)
– Source: Lessons Learned From The Network-Centric Organization: 2004 AT&T Employee Telework
Results
 This calculation assumes that each participating employee teleworks one day per week annually, not
including two weeks of paid vacation
 In order to be consistent with the cost calculation methodology, the savings are shared across the
agency in the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades /
maintenance and COOP compliance
40
Appendix A: Benefit Savings Calculations
BCA 2: Because staff spend less time waiting for data transmissions
when they are provided broadband services, staff are more productive
 These savings compare the
technical performance of
broadband Internet access to dialup Internet access
 The following assumptions about
daily email traffic are based on a
typical federal email account
– average message size of 60
kilobytes
– average of 25 messages per day
– average total size of 1500
kilobytes (1.5 megabytes) per
day
broadband transfer time for 1000 kilobytes (minutes)
average message size (kilobytes)
average # messages per day
average total size of daily messages (kilobytes)
estimated daily time spent on broadband downloads
composite telework hourly rate
estimated daily cost of broadband downloads
0.20
60
25
1,500
0.25
$46.03
$11.51
dial-up transfer time for 1000 kilobytes (minutes)
average message size (kilobytes)
average # messages per day
average total size of daily messages (kilobytes)
estimated daily time spent on dial-up downloads
composite telework hourly rate
estimated daily cost of dial-up downloads
2.70
60
25
1,500
3.38
$46.03
$13.62
estimated daily cost savings due to broadband (per person)
# of teleworkers annually added
# of work days in year
estimated daily cost savings due to broadband (total)
$2.11
8,333
250
$4,397,414.09
41
Appendix A: Benefit Savings Calculations
BCA 3: Reduced Employee Absence Savings Calculations
3
24
$46.03
$1,104.74
8,333
$9,205,839
($7,364,671)
$1,841,168
$5,523,505
# sick days / snow days saved
# hrs saved
composite telework hourly rate
per person annual savings
# of teleworkers annually added
annual savings
less 80%
annual telework-specific savings
total (3-yr) telework-specific savings
 In a study released in 1999, the International Telework Association and Council (ITAC) concluded that
healthy employees often miss work due to family and personal obligations that can only be met during the
business day
– Teleworkers are still able to get some work done, even on days when they have appointments to attend
– Employers can save 63% of the cost of absenteeism per teleworking employee, or $2086 per employee
per year. Source: Exploring Telework as a Business Continuity Strategy, 2005 WorldatWork
 This calculation assumes that 3 sick days / snow days are saved annually per teleworker
 In order to be consistent with the cost calculation methodology, the savings are shared across the agency in
the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance
and COOP compliance
42
Appendix A: Benefit Savings Calculations
BCA 3: Real Estate Footprint Savings Calculations
 For the purposes of this
example, it is assumed that in
Year 3 (FY09), the agency’s
lease is up for renewal
– Because half of its staff now
teleworks at least once a
week, the agency can reduce
its per person (and hence
overall) square footage
allocation by 10%
$34
230
10%
23
8,333
$6,516,406
($5,213,123)
$1,303,283
$1,303,283
Rentable square feet per person rate for Washington, DC Class B
office space
Suggested rentable square feet per person, per GSA Office of
Governmentwide Policy's "Office Space Use" update
% per person reduction in rentable square feet provided
reduced rentable square feet per person
# of teleworkers annually added
annual savings
less 80%
annual telework-specific savings
total (realized in Year 3) telework-specific savings
 The cost per rentable square foot of Class B office space in Washington DC is $34 per year
– Federal office space typically is classified as Class B
– Class B office space definition: good location, professionally managed, fairly high-quality
construction and tenancy; generally show very little functional obsolescence and deterioration
– Source: Society of Industrial and Office Realtors (SIOR) 2005 Comparative Statistics of
Industrial and Office Real Estate Markets
 To be consistent with the cost calculation methodology, the savings are shared across the agency
in the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure
upgrades/maintenance and COOP
43
Appendix A: Benefit Savings Calculations
BCA 3: Employee Retention Savings Calculations
$7,000
25
$175,000
($140,000)
cost to recruit one employee
# employees retained annually due to telework
annual savings
less 80%
$35,000
annual telework-specific savings
$105,000
total (3-yr) telework-specific savings
 According to a 2003 telework study by the Equal Employment Opportunity Commission (EEOC), their total
cost of recruiting one employee is $7000
– While this figure would certainly vary from agency to agency, this study assumes that the variance would
be minor
– Source: OIG-01-13-AMR Assessment of Reducing Infrastructure Costs Through Increased Use of
Telework FINAL
 In order to be consistent with the cost calculation methodology, the savings are shared across the agency in
the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance
and COOP compliance
44
Appendix A: Benefit Savings Calculations
BCA 3: Improved Employee Productivity Calculations
1.00
50
$46.03
$2,302
8,333
$19,178,832
($15,343,065)
$3,835,767
$11,507,300
# additional hours worked on telework days
total # telework days per person per year*
composite Telework hourly rate
per person annual savings
# of teleworkers annually added
annual benefit
less 80%
annual telework-specific benefit
total (3-yr) telework-specific savings
 In a recent study of its extensive telework program, AT&T found that teleworkers report about one
additional productive hour in each workday spent at home (about a 12.5% increase, approximately)
– Source: Lessons Learned From The Network-Centric Organization: 2004 AT&T Employee Telework
Results
 This calculation assumes that each participating employee teleworks one day per week annually, not
including two weeks of paid vacation
 In order to be consistent with the cost calculation methodology, the savings are shared across the
agency in the same manner
– i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades /
maintenance and COOP compliance
45
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
– Per Teleworker Cost Build-Up Methodology
– “Basic” and “Ideal” Costs
– Scenarios
 Appendix C: Resources for Developing Telework-related Business Cases
46
Appendix B: Development of Telework Costs
A comprehensive set of standard cost elements was developed for
estimating the costs of telework at 18 federal organizations
 In line with established cost estimation methodologies, the Booz Allen team made assumptions
and estimates to compensate for several data limitations
–
Lower-level organizational information was used for the cost estimates when overall
organization’s information was not available – these estimates apply to the lower-level
organization only
–
Information provided did not cover all the cost elements needed for analysis and the
available information differed between organizations – cost assumptions were made to
compensate for the missing information
 Global and project-specific drivers and assumptions (i.e., assumptions about the current
telework environment at each organization) were defined
– Prior year (i.e., sunk) costs are not included in the estimates
– All unit costs used in this report are assumed to be in FY 2005 dollars
– All cost and benefits estimates in each of the three sample business cases analyses are
provided in FY07 dollars
 The cost elements were grouped into the three major categories: teleworker home office,
services, and enterprise costs
47
Appendix B: Development of Telework Costs
The assumptions used to make the cost estimates were based on
standard industry estimates of costs and equipment lifecycles
 Hardware technology refresh cycle is based on government and industry standards and varies
by product. The article “When to Upgrade” by John Dix, Network World, November 28, 2005 and
professional experience were used to estimate the life-cycle of equipment
 Each annualized per teleworker cost includes the following components, where applicable: 1) the
annualized purchase price; 2) annual maintenance costs; 3) annual lifecycle refresh costs; 4)
annual recurring fees; 5) annualized one-time fees
– Since every organization interviewed has a telework program in place, these estimates are
designed to capture the annualized costs of previously-made purchases
– In order to provide an annualized estimate for acquisition costs, the initial purchase prices are
divided by their respective product lifecycles
 Calculation of Maintenance and Lifecycle Refresh Costs
– Recurring (i.e., maintenance) annual costs are assumed to total 15% of the acquisition cost of
hardware and 20% of the acquisition cost of software
– Refresh costs are calculated by dividing the acquisition cost of each element by its respective
product lifecycle
48
Appendix B: Development of Telework Costs
Appropriate methodologies were developed in order to estimate
the per teleworker costs for enterprise components
 The voice conferencing per teleworker estimate assumes that a teleworker uses an additional
two hours a month of teleconferencing services as a result of their telework
 The enterprise connectivity per teleworker estimate assumes that each agency’s Internet
connection is a DS3, which has an annual recurring cost of $8,650 (per GSA’s Washington
Interagency Telecommunications System pricing)
 The server cost per teleworker estimate assumes that one server can support 6,000 staff
 The help desk support per teleworker estimate assumes that a teleworker is responsible for a
20% increase per year in help desk support costs based on them teleworking 20% of the time
(equivalent of 1 day per week of telework)
49
Appendix B: Development of Telework Costs
Access to broadband is important for teleworkers due to the
increasing size of data files and the development of new applications
that take advantage of telecommunications infrastructure
 Broadband access is much faster and more
efficient than dial-up and is becoming
increasingly available to residential users
 Emails with attachments are frequently larger
than a Megabyte, particularly if they contain
graphical content, resulting in lengthy
download times for teleworkers with dial-up
access
 Broadband circuits have the capacity to
support new telecommunication capabilities
such as VoIP, video streaming, and
collaboration, which are inaccessible over
dial-up access due to limited bandwidth
Comparison of Cable/DSL to Dial-Up Data Transfer *
53 kbps dial-up line
768 kbps cable/DSL
Size of File
Transfer
Time (Min)
Transfer Time
Size of File
(Min)
100 kbytes
0.3
100 kbytes
0.1
500 kbytes
1.3
500 kbytes
0.1
1 Mbyte
2.7
1 Mbyte
0.2
5 Mbytes
13.2
5 Mbytes
1.0
10 Mbytes
26.4
10 Mbytes
1.9
* Data transfer under ideal conditions, protocol overhead and other
impairments can more than double transfer times
 Study found most organizations do not
reimburse staff for broadband access. If the
government would contract directly with
carriers for broadband service it would provide
more efficient billing and providing teleworkers
business class service
50
Appendix B: Development of Telework Costs
Per Teleworker Cost Build-Up Methodology: Enterprise Connectivity
 It is estimated that, during traffic peaks, 20%* of the user
base is actively using the enterprise Internet access
connection
– The peak traffic is then multiplied by 20%, based on the
assumption that staff telework one day a week
 See sample calculation below; this calculation resulted in a
per person cost of approximately $1 for each organization
Data used in Sample Calculation
DS3 in kilobytes per second (kbps)
44736 kbps
WITS DS3 Installation Cost
$5,300.00
WITS DS3 Recurring Cost
$8,650.00
Sample Calculation
Bandwidth per Twer (in kb per
second - kbps)
5
Assumed
Concurrent Twers
63.04
(20% x 1576 Teleworkers) x 20% = 63.04 Concurrent Twers
Concurrent / Aggregate
Bandwidth (in kbps)
315.2
5 kbps x 63.04 Concurrent TWers = 315.20 kbps
% of Current Bandwidth 0.00704578 315.20 kbps / 44736 (DS3 in kbps) = .007% of Current Bandwidth
$8,650.00
Per GSA’s Washington Interagency Telecommunications System
(WITS) Pricing
Total Cost (Current BW Costs x
% of Current BW)
$60.95
.007% Bandwidth Use x $8,650 = $60.95 Total per Person Cost
Annualized Cost
$731.35
$60.95 x 12 months = Annualized Total per Person Cost
Annualized Cost per Person
~$1.00
Annualized Cost / Total # of Twers
Current Bandwidth Costs
(WITS / FTS)
*1 day per week of Telework = 20%
51
Appendix B: Development of Telework Costs
Per Teleworker Cost Build-Up Methodology: Voice Conferencing
Regardless of the number of teleworkers, this Per User Cost remains the same across each organization,
illustrated by the following calculations which include dramatically different numbers of teleworkers
Organization # 5
Assumed per Minute Rate
$0.13
Assumed Ave. Conf. Call Duration (minutes)
60
Ave # of Conf. Calls Due to TW
2
Ave. Duration of Conf. Calls Due to TW (in minutes)
120
60 Minutes x 2 Hrs = 120 Minutes
Total # of TWers at Org
1,576
Source*
Monthly Cost
$24,585.60
$.08 x 120 Minutes x 1576 TWers = $15,219.60
Annualized Cost
$295,027.20
$15,219 x 12 Months = $181,555.20
Per User Cost
$187.20
$181,555 / 1576 TWers = $115.20
(Per Vendor Quote)
Organization # 9
Assumed per Minute Rate
$0.13
Assumed Ave. Conf. Call Duration (minutes)
60
Ave # of Conf. Calls Due to TW
2
Ave. Duration of Conf. Calls Due to TW (in minutes)
120
60 Minutes x 2 Hrs = 120 Minutes
Total # of TWers at Org
18,604
Source*
Monthly Cost
$290,222.40
$.08 x 120 Minutes x 18,604 TWers = $178,598.40
Annualized Cost
$3,482,668.80
$1798,598.40 x 12 Months = $2,143,180.80
Per User Cost
$187.20
$2,143,180.80 / 18,604 TWers = $115.20
(Per Vendor Quote)
*Source: The Office of Personnel Management’s (OPM) OPM’s 2005 Report “The Status of Telework in the Federal Government
52
Appendix B: Development of Telework Costs
Per Teleworker Cost Build-Up Methodology: Standard and
Enhanced Help Desk Support
 Standard Help Desk Support: The $100 per teleworker help desk support cost is based on
the average annual per teleworker cost of a contractor-operated help desk that supports 15,000
staff at a large cabinet-level department
Estimated TW Help Desk Costs
$100.00
assumed average annual Help Desk cost per user
20.00%
increase in HD costs due to TW*
$20.00
$100 x 20% - $20 (annual per user increase cost due
to TW)
*1 day per week of Telework = 20%
 Enhanced Help Desk Support Costs: Per the basis of estimate above, a help desk provided
solely for teleworkers would cost $100 per teleworker on an annual basis
Enhanced TW Help Desk Costs
$100.00
assumed average annual Help Desk cost per user
53
Appendix B: Development of Telework Costs
Per Teleworker Cost Build-Up Methodology: “Basic” Web
Application Development Cost
 Basic Web-Based Application Development Solution: Total Cost of $256,500
– Two-tier Microsoft-based architecture (less scaleable, more affordable)
– 4 yr lifecycle
– Tier 1: web front end =
2 servers at $20,000 each  $40,000
1 load balancer  $25,000
Software license  cost not included since it can vary widely due
multiple vendor solutions available and due to an application’s specific
requirements, e.g. business rules, data manipulation
– Tier 2: web app =
Network switch  $25,000
2 servers at $50,000 assumed)  $100,000
– Annualized cost of $64,125 ($256,500 / 4)
– Annual 15% hardware maintenance  $28,500; Annual 20% software maintenance 
$38,000
– Supports up to 200 concurrent teleworkers which is scaleable to 5000 teleworkers who
access it once a week on average
– Per teleworker cost of $13 (not including software and labor costs)
54
Appendix B: Development of Telework Costs
Per Teleworker Cost Build-Up Methodology: “Basic” Web
Application Development Cost (cont.)
 Labor costs are not included here since they vary widely due to the scale and scope of
development work, however some guidelines are below:
– 2-8 staff per development is range, with 3-5 being the median
– $110 per hour is typical outsource cost for web development work
– Timeframe: small application = 2-3 months; large application = 6 months – 1 year
– System Administrator is needed to manage each application
55
Appendix B: Development of Telework Costs
Per Teleworker Cost Build-Up Methodology: “Ideal” Web
Application Development Cost
 Ideal Web-Based Application Development Solution: Total Cost of $526,500
– Build 1 component (that uses a 3-tiered component-based architecture) that can used by
multiple apps and can serve multiple requests simultaneously  much more cost effective
– Multi-tier Unix-based architecture (more scaleable and robust)
– 4 year lifecycle
– Tier 1: web front end =
2 servers at $20,000 each  $40,000
1 load balancer system  $25,000
Software license  cost not included since it can vary widely due
multiple vendor solutions available and due to an application’s specific
requirements, e.g. business rules, data manipulation
– Tier 2: middle tier =
2 servers at $100,000 each  $200,000
– Tier 3: web application =
Network switch  $25,000
2 servers at $50,000  $100,000
56
Appendix B: Development of Telework Costs
Per Teleworker Cost Build-Up Methodology: “Ideal” Web
Application Development Cost
 Ideal Web-Based Application Development Solution (cont.): Total Cost of $526,500
– Annualized cost of $131,625 ($526,500 / 4 )
– Annual 15% hardware maintenance  $58,500; Annual 20% software maintenance 
$78,000
– Supports up to 200 concurrent teleworkers which is scaleable to 5000 teleworkers who
access it once a week on average
– Per teleworker cost of $26 (not including software and labor costs)
– This per teleworker cost must be doubled to $52 to account for redundancy (again,
this does not include software and labor costs)
 Labor costs are not included here since they vary widely due to the scale and scope of
development work, however some guidelines are below:
– 2-8 staff per development is range, with 3-5 being the median
– $110 per hour is typical outsource cost for web development work
– Timeframe: small application = 2-3 months; large application = 6 months – 1 year
– System Administrator is needed to manage each application
57
Appendix B: Development of Telework Costs
Per Teleworker Cost Build-Up Methodology: Collaboration
Resources, i.e., Live Communication Server 2005 Costs
 Centrally managed and secured resources such as instant managing, document sharing, and
virtual meeting tools are made available to teleworkers
 Microsoft Live Communication Server (LCS) 2005: Total Cost of $251,000
– This sample solution assumes a teleworker base of 20,000
– 3.5 yr lifecycle
– Annualized cost of ($251,000 / 3.5)  $72,000
– 2 load balancers (for redundancy) at $25,000  $50,000 subtotal
– Array of 4 servers at $30,000 each  $120,000 subtotal
– $3150 LCS licensing cost per server  $12,600 (does not include federal government
discount, which could result in significant savings)
– Annual 15% hardware maintenance  $28,000
– Annual 20% software maintenance  $37,000
– Supports 4000 concurrent teleworkers, which is scaleable to 20,000 teleworkers
teleworkers who access it once a week on average
– Client Access License (CAL) if $31 but Microsoft does not charge this amount if the
customer has valid MS Exchange licenses (which we assume each organization has)
– Per teleworker cost of $4
58
Appendix B: Development of Telework Costs
Per Teleworker Cost Build-Up Methodology: Remote Email Access
Costs
 Microsoft Outlook Web Access (OWA) Solution: Total Cost of $233,000
– This sample solution assumes a teleworker base of 20,000
– 3.5 yr lifecycle
– Annualized cost of $67,000 ($232,500 / 3.5)
– 2 load balancers (for redundancy) at $25,000  $50,000
– Array of 4 ISA servers at $30,000 each  $120,000
– $2000 - $4000 ISA total servers licensing cost (varies) $3000 assumed
– Annual 15% hardware maintenance  $34,000
– Annual 20% software maintenance  $26,000
– Supports 4000 concurrent teleworkers, which is scaleable to 20,000 teleworkers who
access it once a week on average
– Per teleworker cost of $3
 It is estimated that, during traffic peaks, 20%* of the teleworker base is actively using remote
email
 The peak traffic is then multiplied by 20%, based on the assumption that staff telework one
day a week
59
Appendix B: Development of Telework Costs
Per Teleworker Cost Build-Up Methodology: VPN Costs
 Standard VPN Solution: Total Cost of $25,000
– 3 yr Lifecycle
– Annualized Cost of $8300 ($25,000 / 3)
– Cisco VPN concentrator
– Includes end teleworker licenses
– Supports 1500 concurrent teleworkers, which is scaleable to 37,500 teleworkers
– Per teleworker cost of $6
 Clientless SSL VPN Solution: Total Cost of $350,000
– 3 yr Lifecycle
– Annualized Cost of $117,000 ($350,000 / 3)
– includes hardware and software and maintenance)
– supports 5000 concurrent teleworkers, which is scaleable to a teleworker base of 125,000
teleworkers
– Per teleworker cost of $1
 It is estimated that, during traffic peaks, 20% of the teleworker base is actively using VPN
 The peak traffic is then multiplied by 20%, based on the assumption that staff telework one
day a week
60
Appendix B: Development of Telework Costs
Per Teleworker Cost Build-Up Methodology: “Limited” vs. “Full Costs
 To account for the fact that in each
scenario, the current solution
provides limited versions of the
components we identified, we have
reduced the per teleworker costs to
appropriate percentages
Component Full (100%) Limited Per Percentage
Per
Teleworker
Teleworker
Cost
Cost
PDA
$288
$29
10%
10% PDA
Access
$651
$65
10%
Mobile
Phone
$144
$14
10%
 Explanation of 10% Mobile Phone
Access - provided for executive staff
only
Mobile
Phone
Access
$651
$65
10%
 Explanation of 25% Peripherals –
assumes printer only
Peripherals $238
$60
25%
Web
Interfaces
$13
N/A
 Explanation of 10% PDA Access –
provided for executive staff only
 Explanation of 10% Mobile Phone provided for executive staff only
 Explanation of Web Interfaces –
different architecture, redundant
system
$52
61
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
– Per Teleworker Cost Build-Up Methodology
– “Basic” and “Ideal” Costs
– Scenarios
 Appendix C: Resources for Developing Telework-related Business Cases
62
Appendix B: Development of Telework Costs
Basic and Ideal Costs – Home Office
The Annual Cost Per Teleworker Per Alternate Site Component Including Maintenance Costs
Components
Description
PC
Laptop PC & Docking Station - Provides basic computer capabilities to teleworkers,
including mobility and access to enterprise software; Assumes use of same PC for office
and home
Printer / Copier / Fax - Provides common office functionality away from office to
perform job functions (assumes “All-in-One” device)
Peripheral
Support
Network
Interface
Mobile
Telephone
Security
Resources
Basic
Ideal
Solution solution
$2,072
$2,072
$238
$238
Broadband Router - Provides connectivity interface for broadband Internet access,
which is required for accessing enterprise network
$68
$68
Mobile Telephone - Provides mobile voice communication allowing co-workers and
customers to easily contact the teleworker (OPTION 1)
$144*
$144*
Firewall Solution - Enterprise hardware and/or software solution provides secure
connectivity services, application policy enforcement, and attack protection
Authentication Device - Devices that provide extra secure layer of teleworker
authentication beyond teleworker id / password policies (e.g. secure hardware tokens)
Advanced Authentication Device - Devices that provide high layers of teleworker
authentication and encryption for secure and classified access (e.g., fingerprint readers,
biometrics)
Web Cam - Integration of video streaming with enterprise collaboration tools allows for
virtual meetings with co-workers and customers
$307
$307
$42
$42
Collaboration
Tools
PDA Devices PDA Devices - Messaging devices (e.g., Blackberry, Treo) allowing mobile voice and
$30
$90
$288*
data communication with co-workers and customers (OPTION 2)
*Only one of the 2 options needs to be provided for remote telephone communications equipment
63
Appendix B: Development of Telework Costs
Basic and Ideal Costs – Services
The Annual Cost Per Teleworker Per Services Component Including Maintenance Costs
Components
Description
Enterprise Connectivity – Network connectivity to support teleworker expansion
Data
Communications from enterprise to Internet (e.g., DS3, OC-3)
3 OPTIONS
(Ideal solution assumes enterprise has redundant network connectivity for
backup connectivity and disaster recovery (including wireless, satellite, etc.)
Home Office Connectivity – Broadband access connectivity from teleworker home
office to Internet for enterprise access (e.g., DSL, cable)
(Ideal solution assumes that teleworker access costs are covered by
government)
Voice Conferencing - Audio bridge services available to teleworkers for multi-party
Voice
Communications voice calls with co-workers and customers
Mobile Telephone Access - Usage costs for mobile voice services covered by
Government
Calling Card - Cost allowance provided to teleworkers for long distance voice
charges
Telephone Line - Additional land line to enable separate voice communication
from home office
Help Desk Support - Use of existing resources to provide hardware / application
Help Desk
support and troubleshooting services to enterprise and teleworkers
Support
(Ideal solution assumes enhanced help desk support for teleworkers to
maintain SLAs and KPIs)
Technical Training - Information such as telework technology policies, IT
Technical
troubleshooting techniques, and technical capabilities of home office provided to
Training
teleworkers and managers of teleworkers
PDA Access - Usage costs for mobile voice / messaging services covered by
PDA Access
government
*Only one of the 3 options needs to be provided for telephone communications access
Basic
Ideal
Solution solution
$1
$1
$620
$620
$187
$187
$651*
$651*
$14*
$14*
$494*
$494*
$20
$100
$300
$300
$651
64
Appendix B: Development of Telework Costs
Basic and Ideal Costs - Enterprise
The Annual Cost Per Teleworker Per Enterprise Component Including Maintenance Costs
Components
Description
Basic
Ideal
Solution solution
Secure Network VPN / Firewall Solution – Infrastructure (hardware / software) provides secure remote
access for teleworker connectivity to enterprise network (includes enterprise network
Access
$6
$1
$3
$3
$433
$433
$13*
$52*
interface and software for teleworker clients)
(Ideal solution assumes clientless, browser-based solutions (e.g., SSL VPN) that
reduce administrative efforts and expand range of accessing devices)
Application / Remote Email Access – Centrally managed solution provides for secure remote access
Administrative to enterprise email system (e.g., Outlook Web Access, Lotus iNotes)
Terminal Emulation System – Centrally managed solution (e.g., Citrix) that provides
Access
teleworker secure remote access to non-web enterprise applications and data without
the need for separately installed client applications (only thin client software required)
(Ideal solution assumes fully redundant enterprise system for backup / disaster
recovery)
Web Interface - Multi-tier architecture that provides capability to remotely access
enterprise web applications and limited administrative functions (e.g., time cards,
expense reports)
(Ideal solution assumes fully redundant system allowing remote access to
additional admin functions such as travel planning, training, support services,
etc.)
Collaboration
Resources
Collaboration Resources - Centrally managed and secured resources such as instant
managing, document sharing, and virtual meeting tools are available to teleworkers
$4
*Web Interface total does not include labor costs or software licensing costs. Please see Appendix for more detail.
65
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
– Per Teleworker Cost Build-Up Methodology
– “Basic” and “Ideal” Costs
– Scenarios
 Appendix C: Resources for Developing Telework-related Business Cases
66
Appendix B: Development of Telework Costs
The organizations that participated in the study were grouped into
5 scenarios based on how much additional infrastructure was
required to provide the basic and ideal telework IT environment
 Scenario A organizations provide basic telework infrastructure including home office support,
services, and enterprise access, but additional IT infrastructure is required to bring them up to
the ideal environment
 Scenario B organizations provide some basic telework infrastructure including some home
office support and services and full enterprise access. However additional IT infrastructure is
required to provide all basic and ideal telework technologies to teleworkers
 Scenario C organizations provide some basic telework infrastructure including some home
office support, services, and enterprise access. However additional IT infrastructure is
required to provide all basic and ideal telework technologies to teleworkers
 Scenario D organizations provide a few basic telework infrastructure components and services
for the home office but limited if any enterprise access. Substantial IT infrastructure
improvements are required to provide basic and ideal telework technologies to teleworkers
 Scenario E organizations provide few if any basic telework infrastructure, so significant IT
infrastructure improvements will be required to provide basic and ideal telework technologies
to teleworkers
67
Appendix B: Development of Telework Costs
Network infrastructures and the ability to scale resources and
support for expanded telework programs vary across the federal
government
Ideal
Ideal
Ideal
Ideal
Ideal
Basic
Basic
Basic
Basic
Basic
Critical Home Office, Services, and
Enterprise components available to
support teleworking
Per User Cost
Minimal Services and Enterprise
components available to support
teleworking ; No Home Office
resources or support available
Scenario A
Scenario B
Scenario C
Scenario D
Scenario E
Scenario A
Scenario B
Scenario C
Scenario D
Scenario E
Per User Cost
Per User Cost
Per User Cost
Per User Cost
Per User Cost
Basic*
$0
$2,171 –
$2,952
$2,244 –
$3,025
$2,323 –
$3,104
$3,040 –
$3,821
Ideal**
$512***
$1,420
$1,420
$1,420
$1,420
LEVEL OF ADDITIONAL HOME OFFICE,
SERVICES, AND ENTERPRISE
COMPONENTS REQUIRED
All necessary Home Office, Services,
and Enterprise components are
provided to support teleworking,
including some enhanced capabilities
*Cost varies depending on which voice communication option is chosen
**Cost of upgrading from basic solution to ideal solution
***Cost of upgrading from current to ideal solution
68
Table Of Contents
 Introduction
 Methodology
 Sample Telework Program Business Cases
– BCA 1 – Home Office (In-Depth)
– BCA 2 – Services (High-Level)
– BCA 3 – Enterprise (High-Level)
 Findings and Conclusions
 Appendix A: Benefit Savings Calculations
 Appendix B: Development of Telework Costs
– Per Teleworker Cost Build-Up Methodology
– “Basic” and “Ideal” Costs
– Scenarios
 Appendix C: Resources for Developing Telework-related Business Cases
69
Appendix C: Resources for Developing Telework-related Business Cases
Government decision makers need information for comparing cost,
benefit (both financial and non-financial) and risk that quantifies
projected results in a meaningful and accurate manner
 In July 2001, Social Security Administration (SSA) and
General Services Administration (GSA) engaged Booz Allen
Hamilton and Harvard University’s Kennedy School of
Government to develop an effective methodology to assess
the value of electronic services (e-Services)
 The resulting Value Measuring Methodology (VMM)* was
developed to be flexible, scaleable, and customizable
– Its guiding principles and consideration of risk, value and
cost are universally applicable in the government
environment
– This methodology enables important insight into the true
business value of many types of investments
 The groundbreaking VMM approach provides a means to
quantify financial and non-financial value using five factors
–
–
–
–
–
Direct User (Customer) Value
Social (Non-direct User/Public) Value
Government Operational/ Foundational Value
Government Financial Value
Strategic/Political Value
VMM Key Considerations
What benefits will the
investment provide to
all interested parties?
How much
will it cost to buy?
How much will it
cost to operate and
maintain?
What Could Make
Costs Go Up or
Performance Slip From
Projected Levels?
70
Appendix C: Resources for Developing Telework-related Business Cases
An enterprise-level capital planning process will help enhance
telework program efficiencies, benefits, and overall strategic value
Direct Financial Benefits




Multi-use
Tools and
Capabilities
Enterprise
Modernization
Telework
Program
Shared Costs, Risks, and Benefits
with Other Enterprise Initiatives
Additional Benefits
Disaster
Preparedness &
Continuity of
Operations
Improved employee availability
Opportunities for real estate savings
Increased recruitment and retention potential
Potential for increased employee productivity while
teleworking and during office closures
Indirect Financial and Other Benefits


Enhanced organizational process efficiencies

Accessible, modernized applications that allow staff to
perform their work regardless of location

Adaptable applications that support changing business
needs of organizations

Legislative Compliance and alignment with ongoing
Congressional interest





Coordinated standards for technology configuration
Continuity of Operations (COOP) readiness for public
health, weather, and other emergencies
Reduction of traffic congestion and pollution
Compliance with OPM and GSA guidance
Enhanced public image (“employer of choice”)
Increased work opportunities for people with disabilities
71
Appendix C: Resources for Developing Telework-related Business Cases
The sample BCAs provided in this document can be customized to
fit agencies’ changing business requirements and staff sizes
 Adjust the benefits calculation assumptions to fit your agency’s
particular operating environment, for example:
– Increase the number of employees retained annually due to
telework,
– Decrease the percent reduction in real estate footprint
 Add or subtract costs of components from sample BCAs as
appropriate, by:
– Adding applicable unit costs to cost estimate from the pages that
follow
– Increasing or decreasing the investment window, e.g. 1 year, 5
years
 Customize the risk analysis as appropriate
– More potential risks could be identified
– Probability and impact of occurrence vary from agency to agency
72
Appendix C: Resources for Developing Telework-related Business Cases
In the course of this government-wide study, we have developed a
comprehensive and current collection of the costs associated with
a telework program
 These costs can be leveraged when developing estimates for
telework-related BCAs
 The following three pages provide unit costs for each of the
components that typically make up a telework program
– These costs are grouped into three major categories:
teleworker-at-home, services and enterprise
 The Appendix provides additional detail on costs for:
–
–
–
–
–
–
–
Enterprise connectivity
Voice conferencing
Help Desk
Web application development
Collaboration resources
Remote email access
VPN
Home Office
Services
Enterprise
73
Appendix C: Resources for Developing Telework-related Business Cases
The cost of equipment to support a teleworker in the home office
varies from $2,072 for a laptop to $42 for authentication equipment
Component
Laptop & Docking
Station
Description / Purpose / Assumptions
Annualized Unit
Cost (per user)
Provides mobility and access to enterprise software; Assumes use of separate
office and home computers, new laptop without application or OS software; 3year refresh cycle
$2,072
Printer / Copier / Fax Provides common office functionality away from office; Assumes new
integrated device with 3.5 year refresh cycle
$238
Broadband Router
Provides connectivity interface for broadband Internet access but does not
include Internet service; Assumes new router with 4 year refresh cycle
$68
Web Cam
Allows for virtual meetings via video streaming and collaboration tools;
Assumes new web cam with 3.5 year refresh cycle
$90
Mobile Telephone
Provides mobile voice communication; Assumes new phone with 2 year refresh
cycle; connectivity fee not included (refer to “Services” section)
$144
PDA (Blackberry,
Treo)
Messaging devices for mobile communication; Assumes new device with 2
year refresh cycle; connectivity fee not included (refer to “Services” section)
$288
PC Software
Operating system, application, and security software required for new laptops
(e.g., Windows XP, MS Office Suite, Anti-virus, Spyware, etc.); Assumes new
user license and 3 year refresh cycle
$628
Authentication
Device
Devices that provide additional identification of the user beyond the typical user
id and password (e.g., secure tokens; fingerprint readers); This report uses the
RSA SecurID device because this device is often used in the federal
government. Assumes a new device with a 4 year life cycle
$42
Firewall Solution
Enterprise hardware / software solution provides secure connectivity services,
application policy enforcement, and attack protection; Assumes new appliance
with 3.5 year refresh cycle.
$307
74
Appendix C: Resources for Developing Telework-related Business Cases
Services include the cost of enterprise connectivity and support
services such as help desk and training
Component
Description / Purpose / Assumptions
Enterprise Connectivity Percentage of network connectivity from enterprise to Internet used by
teleworkers
Annualized
Unit Cost (per
user)
$1
Teleworker
Connectivity
Network connectivity from teleworker home office to Internet for enterprise
access (e.g., Dial-Up, DSL, cable)
$620
Voice Conferencing
Audio bridge services provided by external carrier for multi-party voice calls
$187
Calling Card
Cost allowance provided to teleworkers for long distance voice charges
$14
Managed VPN
Secure network connectivity from teleworker home office to enterprise; VPN
service managed by external carrier
$80
Mobile Telephone
Access
Usage costs for mobile voice services (i.e., cell phone plan)
$651
PDA Access
Usage costs for mobile voice / messaging services
$651
Telephone Line
Additional land line to enable separate voice communication from home office;
Allows dial-up users to maintain simultaneous network connectivity
$494
Help Desk Support
Hardware / application support and troubleshooting services to teleworkers
$20
Technical Training
Information such as telework technology policies and procedures, IT
troubleshooting techniques, and technical capabilities of home office
$300
75
Appendix C: Resources for Developing Telework-related Business Cases
The enterprise resources that most directly support the teleworker
are access and security facilities, such as terminal/access servers
and virtual private network systems
Component
Description / Purpose / Assumptions
Annualized Unit
Cost (per user)
Remote Access Server Provides enterprise access point for teleworkers utilizing dial-up network
connectivity; Assumes new server with 4 year refresh cycle
$2
VPN System
Provides secure access point for teleworker connectivity to enterprise
network; Includes end user licenses; Assumes new concentrator with 3 year
refresh cycle
$6
Enterprise Systems*
Hardware and software required to support enterprise applications accessed
by teleworkers; Assumes that there are no significant changes to existing
enterprise applications to support telework
$0
Terminal Emulation
System
Provides teleworker with remote access to enterprise applications and data
(i.e., Citrix); Client software for teleworker PC is included in cost; Assumes
new software with 3 year refresh cycle
$433
*Negligible additional cost due to telework because the enterprise systems are already in place to
support each organization's existing operations
76
Appendix C: Resources for Developing Telework-related Business Cases
A composite General Schedule profile for teleworkers was
developed in order to more accurately calculate the potential
worker productivity gains
Level*
GS-7
GS-9
GS-11
GS-12
GS-13
Total
%
DC Hourly
Plus
Plus
Loaded Hourly Composite
Weight Rate
Fringe**
Overhead***
Rate
Rate
5.00%
$19.91
$6.54
$3.17
$29.62
$1.48
20.00%
$24.36
$8.00
$3.88
$36.25
$7.25
30.00%
$29.47
$9.68
$4.70
$43.85
$13.15
40.00%
$35.32
$11.60
$5.63
$52.55
$21.02
5.00%
$42.00
$13.80
$6.70
$62.49
$3.12
100.00%
N/A
N/A
N/A
N/A
$46.03
 Step 5 is assumed for all GS levels
Fringe Benefits
32.85%
OMB Circular A-76 Attch C (B.f.1.)
Overhead
12.00%
OMB Circular A-76
The % breakouts are based in part on the real GS distribution across government and in
part on the survey data collected in the course of this study which indicates that very
senior and junior employees are less likely to telework.
 Employees in lower GS levels (7 and below) may not be afforded the opportunity to telework
due to their junior status and/or short tenure, while employees in higher GS levels (13 and
above) may not be allowed to or may choose not to telework due to managerial duties and/or
office-based work demands
77
Appendix C: Resources for Developing Telework-related Business Cases
In addition to OMB’s 19 risk categories, there are a number of
telework-specific risks that should be considered when developing
a telework-related BCA
Telework Risks
Technology Issues (e.g., connectivity, performance of legacy
client-server applications remotely, security, data security)
Space availability (at telecenters) in an emergency
Access to / availability of quality equipment
Access to / availability of IT support
Efficacy of training
Operational impacts
Reactions of co-workers
Inflexible agency-based operating procedures
Too few at-home days authorized for program to be effective
Supervisor behavior
Appropriate selection of participants for telework
Timely coordination with unions
Inadequate preparation
Coerced management participation
Automated monitoring of employee performance (e.g.,
monitoring an employee’s key strokes and time on/off a
computer via electronic devices)
Creation of burden on non-participating employees
Potential for low utilization rate of telecenters
Staff culture / existing expectations
Resistance by organizational support functions (e.g., HR, IT)
Historical resistance by smaller Federal agencies
Difficulty in measuring results
Mitigation Strategies
Senior management leadership
Long-term IT and capital planning for telework
Broadband residential services
Comprehensive security planning
Telework-specific training
Organize Telework Advisory Group or Program Management
Office
Assessing the impact Telework has on timekeeping,
compensation, and other issues
Developing a plan to address the equipment needs of your
organization Telework program
Preparing a written Telework agreement for employees and
managers
Regularly re-evaluating and modifying the program, when
necessary, to meet changing circumstances
Willingness of agency to participate
Designation of appropriate telework coordinator
Coordination with local unions (when applicable)
Increased IT support and allocation of resources
78