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Aug 20

Video 4.0 – Look at Telepresence approach by ROI or Cost side?

Within IT space you see a real shift on who is interested in Collaboration and Videoconferencing.  It’s not the IT manager or the CIO at a corporation. They see this usually as an headache, a lot of technical complexity and a huge cost. A higher cost than that’s affordable in their current budget. In the economic downturn they budget’s have shrunk and diminished.

Some of the most seen cost components they most often have to take into account to support this:

  • Video equipment, from endpoints to entire Telepresence rooms
  • Maintenance, Installation, Training
  • Wide Area Networking including Quality of Service
  • Local Area Network upgrades to support the Quality of Service that have been postponed
  • Local Cabling upgrades
  • Usage & Adoption and Awareness Programs to support wide spread usage
  • Internal Marketing &  Communication Costs
  • Laptop / PC upgrades to desktop video (i.e. MSFT OCS, Polycom CMA or Cisco/Tandberg Movi)
  • Executive Sponsorship
  • up to
  • Business Cards renewel with video addresses where executives can be reached personally

To take just two of the cost components:

  1. Equipment. (Just the purchases of the equipment alone can go from eur 5000,- to eur 500k for a single room)
  2. Network (it’s not uncommon to have international links to go well over eur 5000 a month to locations like India, China, Vietnam, Thailand, Brazil, Africa, or Argentina)

These are just the top two that an IT manager has in mind. He thinks no one will ever pay this. Besides video conferencing in the early century never promised what it did on ISDN. Why should it now, the equipment is still there but no one uses it.

Well, although the cost should be carefully looked at, the benefit is multiple times bigger. But the benefit is with other people that do not see the cost. That’s with the people where budgets come to together, for example a CFO, Sales, Marketing, Communication etc, It is the what IT people call the Business user. The Business see the benefit and IT has to pay. What an IT manager usually does not see or cannot quantify is the benefit that videoconferencing or collaboration brings and how that relates to the cost to be made.

Benefits come in the form of:

  • Travel reduction (very measurable, and easy for ROI if all travel is tracked)
  • Faster decision making (quality meeting can be held, without having to wait two week)
  • Green (less CO2 emission) (less flights so less CO2 emission)
  • Better work / life balance (more time to see your family)
  • Faster business (communicate with partners, customers, supply chain) over video

With Collaboration and Video becoming less expensive and more and more people are looking at it today. from Metcalfs lawIt becomes even more attractive. This is where Metcalfs law comes into play. The more people that use it, the higher the amount of communications.

Look at mobile phone adoption rates, at a certain point growth is exponentially to a point where you reach an adoption of 75%. I predict that in 2 years from now even people at home have videoconference equipment. They will not use the impractical skype to call distant family, but use there TV with build-in codec and camera and talk to distanct family traveling with their laptop or the can even be the iPhone4 with Facetime (if they even give their proprietary SIP to the open standards community).  Image calling your wife via your iPhone to talk to your children before they go to bed. You might be traveling but everyone still has the feeling that you are close.

So business have to keep in mind that if they do not follow this trend, their competitor will have the advantages of bringing costs down, is able to communicate better with the customer you are competing for.

Some good examples for business use can be found here, showing the benefit that has brought it to them

Tandberg business cases for Video

Polycom Return on Investment

Cisco the real ROI of collaboration

Orange Business Collaboration Blog

Also look for twitter and the tags #videoconferencing, #uc, #telepresence etc.

if you want to reach me over video, call me @ jako.boonekamp.movi@orangevideoconferencing.com

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