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Total economic impact studies: Why Divvy makes financial sense for customers
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Total economic impact studies: Why Divvy makes financial sense for customers

16 min read

Divvy recently commissioned a total economic impact (TEI) study, and it shows what we’ve always known: Divvy saves our customers a lot of money. But what is a TEI study, and what does it include? And what can Divvy customers learn from this information?


  • A total economic impact (TEI) study explores the general impact of adopting a new technology.
  • This helps businesses decide if the new technology has the right return on investment. 
  • Our independently conducted study reveals that though Divvy software is free to use, it is an excellent investment in time and education for small and medium-sized businesses.
  • Divvy customers received a significant return on investment in the form of a reduction in the amount of time and effort it took to manage spend, and also a reduction in wait times for reimbursements. 

What is a total economic impact study?

A TEI study is a format developed by Forrester Research to support a company’s decision-making processes. It analyses cost, benefits, flexibility, and risk. If a business owner is interested in a new software, they can refer to a TEI study to understand the tangible value of technology initiatives. 

What is the objective of the TEI framework and methodology?

For over 20 years, the TEI framework and methodology have been used by technology organizations and consumers to help determine potential ROI. This industry-standard framework evaluates cost, benefits, flexibility, and risk to analyze all impacts of a given product or service. Researchers will evaluate qualitative and quantitative samples through detailed interviews of real customers. 

In the end, the study answers the question: is this solution worth the time and money it will take to implement it? 

Exploring the Divvy customer journey 

Using real customers to get real feedback is an important component of TEI studies. 

Forrester, the third-party organization that evaluated Divvy’s TEI, interviewed four real customers using 12 months of usage data to determine what their experience has been like. 

In general, interviewees felt that prior to using Divvy, they struggled with managing the volume of their organizations’ expenditures. They also felt that existing credit providers did not supply enough payment cards for their employees. 

The customers felt that expense management under their old solution was too difficult and not transparent enough, and they did not like to leave their employees waiting for reimbursements. 

Image of the TEI report one year analysis

However, after switching to Divvy, the interviewees felt their organizations benefited in many different ways. They were able to obtain increased credit lines, and the direct integrations between the credit accounts and accounting software reduced accounting personnel work efforts and expense reporting efforts for business users of credit. 

Most importantly though, the entire process was more convenient, and now that there was visibility and control into where and how money was being spent, errant spending was minimized.

Quantified and unquantified benefits

The key findings from our interviewees include both quantified benefits, which are measurable effects, and unquantified benefits, which include relevant information that cannot be given a numerical value. 

Image of TEI report on Divvy benefits

The key findings from our interviewees include both quantified benefits, which are measurable effects, and unquantified benefits, which include relevant information that cannot be given a numerical value. 

Quantified benefits

  • Spend control and management reduced noncompliant spend by $150,000 in a single year. In using Divvy, interviewees’ organizations improved their spend management by reducing maverick and errant spend by 3% as well as reducing the number of hours to manage spend by hundreds of hours in a year. 
  • Business users of payment cards gained time with faster expense reporting. Prior to having Divvy, expense reporting was tedious. Business users with payment cards from Divvy spent less time doing expense reporting and follow-up work, to the tune of half an hour per month or 25% less time than before. Time savings for the composite organization is equivalent to nearly $39,000 present value (PV) in the first year.
  • Finance and accounts payable teams recouped time with automated reconciliation processes. Finance and accounting professionals saved an incredible amount of time with Divvy, as reimbursements and validation of spend were precoded and integrated with accounting software. The composite of the four organizations interviewed for this study saves 24 hours per month, amounting to nearly $5,000 PV in the first year.

Unquantified benefits

  • In providing payment card access to a greater employee population, company spend by employees on personal cards was mostly eliminated. Employees no longer needed to float a balance and wait for reimbursement, making for a much happier workforce.
  • Some interviewees stated that the available credit Divvy provided was higher than other card issuers. In one instance, the disparity was as large as ten times greater. Having that type of credit flexibility enabled more transactions to be performed while decreasing work for accounts payable.

Divvy’s ROI for customers

Because Divvy is free to use, the risk-adjusted present value (PV) costs are limited to implementation and change management costs. Indirect costs are incurred for ledger coding and training of accounts payable personnel, managers, and users of payment cards. The total cost for the composite organization amounts to less than $33,000 PV for a one-year analysis.

The decision-maker interviews and financial analysis found that a composite organization experiences benefits of $193,000 over the first year versus costs of $33,000, adding up to a net present value (NPV) of $160,000 and an ROI of 487%.

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The information provided on this page does not, and is not intended to constitute legal or financial advice and is for general informational purposes only. The content is provided “as-is”; no representations are made that the content is error free.

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