ROI

Unified Communications ROI Doesn’t Happen By Magic

I read an article recently that talked about the promise of cost savings with unified communications and that the ROI (return on investment) doesn’t always pan out the way it does in the marketing brochure.

I think the argument put forth in the article doesn’t support the headline. The article basically talks about why some customers aren’t able to determine ROI because they don’t know what their expenses were to begin with and have no baseline for comparison. That is an entirely different issue than whether or not the investment in unified communications is delivering the ROI it promised.

Assume for a moment that the claim is valid, I think I know where the problem lies. *Deploying* unified communications doesn’t lead to cost savings or deliver the expected ROI. It is the proper configuration, and more importantly, *use* of unified communications that leads to the ROI.

If an organization invests in unified communications, and deploys the technologies throughout the company, but the users don’t understand how to use the tools effectively and everyone just continues business as usual following the same old processes, unified communications will not provide any value. Part of the initial investment in unified communications should include some type of end-user training to educate the users {subliminal message} contact Tony Bradley to inqire about end-user training in unfied communications {/end subliminal message} on how to shift the way they communicate to take advantage of all that unified communications has to offer.

The UC ROI does’t just magically happen because you deploy UC. You have to actually USE the UC tools effectively to realize the ROI.

Invest in UC Now: Top Reasons Why You Shouldn’t Wait Any Longer

In the midst of an economic downturn, right now probably doesn’t seem like a good time to be investing in a full-fledge UC implementation. But, what many people don’t know is that UC can immediately save your company money and give you the competitive edge you’ve been looking for - without breaking the bank.

Attend this Virtual Seminar, “Unified Communications: A Good Investment in a Down Economy” to find out what you can do to ensure that you’ve got the building blocks in place to reap the benefits of UC even if you’re not ready to be there now. The knowledge you will gain will be worth the time you invest and will not only allow you to weather the current economy, but help you come out on top when things turn around.

When:    LIVE! June 16, 2009. 9:30 AM - 2:30 PM EDT (1330 - 1830 GMT)

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Cost Savings Drives UC Adoption by SMB’s

ROI is generally at or near the top of the checklist when trying to determine if a given project should be approved. Of course, the project may make workers more efficient, it may improve logistics or increase the speed at which products or services can be delivered to customers, or it may just be really cool. But, where the rubber meets the road is translating that efficiency, speed, or productivity into dollars and comparing it against the initial investment to determine if it is really worth it.

Recent studies by Siemens and bMighty help to illustrate just how significant that ROI is and how quickly the initial investment can be recovered when implementing unified communications. Interestingly, the Siemens study also found that SMB’s have the same top 6 pain points (listed in the same order of priority) as large enterprises when it comes to unified communications.

Looking at the big picture and doing the math “the study says 70% of SMBs have dealt with the top five pain points, rendering an average of 17.5 hours per week per knowledge worker into “unproductive” work time. This costs an average of $26,041 per knowledge worker per year, or $5,246 per employee per year.”

Comparing that with an average unified communications implementation cost of $225 per worker, a company with only 50 employees could see cost savings of over $250,000 in the first year. The cost of deploying unified communications will vary largely depending on the vendor that is chosen and the current state of the organization’s communications and data infrastructures, but for a company of only 50 people it is almost certain to be significantly less than $250,000.

Say the company has 250 employees? Suddenly that $250,000 in savings becomes over $1.3 million. If an investment in unified communications can save a 250-person company $1.3 million per year I think the next questions should be ‘when can we start, and how soon can we get UC up and running?’

Defining ROI with UC-B

UC-B is apparently a term coined by Blair Pleasant (and others at UCStrategies.com), President and Principal Analyst for COMMfusion Unified Communications. In this SearchUnifiedCommunications.com article she talks about how communications-enabled business processes (CEBP) will be the driving force behind the success of unified communications.

Pleasant explains that she perceive two types of unified communications: UC-U (user-oriented unified communications) and UC-B (business-oriented unified communications). “UC-U is nice to have, but it’s UC-B where the ROI really comes in,” Pleasant said.

I couldn’t agree more. One of the primary advantages of unified communications is the extensibility of the platform and the ability to create custom communications solutions. Traditionally, businesses have had to conform their business processes to the limited capabilities provided by their communications systems. Now, organizations can design business processes that maximize their efficiency and productivity and develop custom communications solutions that fit their needs.

This article mentions some development that BT has done to customize the functionality of Microsoft Office Communications Server 2007 (OCS 2007) for their customers. Evangelyze Communications is a leader in this aream having developed an entire suite of products around the extensibility of OCS 2007 and OCS 2007 R2. SmartChat, SmartVoIP, SmartSIP, and others enable organizations to expand the functionality of Microsoft Unified Communications and leverage ‘UC-B’ to maximize their ROI.

Remember ROI?

Ah, the ‘Good Ole Days’. Remember when business decisions and investments could be made based on ROI (return on investment). If a business invests $1 million in new manufacturing equipment that helps them produce higher quality widgets faster, thereby increasing output and bringing in $200,000 a month more in revenue, then the investment pays for itself in 5 months and after that its all gravy. Simple enough.

The problem is that many of the business decisions and investments on the table these days do not fit into ROI calculations. Investing in network security does not generate revenue. It just (hopefully) protects you from losing money. Investing in process automation does not generate revenue. It (hopefully) makes processes more efficient resulting in cost savings per process execution which reflects back to the bottom line. Unified communications is sort of in the same boat.

In and of itself, UC won’t generally make money. What it will (hopefully) do if implemented properly is allow employees to work more efficiently and be more productive. It will allow employees to collaborate more effectively and help to generate team synergy where it wasn’t possible before. It will enable the business to respond to market pressures and customer needs more agilely. UC is a tremendous investment, but companies need to understand the big picture and both implement and use the tools effectively. Oh, and don’t try to justify the investment with a straight ROI measurement. Your CFO probably won’t cut a check based on that argument.

Corporate Culture and ROI

Unified Communications is many things to many people. Many organizations (and even some experts) are still struggling to define what it is, what it isn’t, what are the features and benefits, and what are the pitfalls. Arguments can be made about how it will streamline communications and allow the company to be more productive and more efficient, but that assumes it is properly implemented and used. Where the proverbial ‘rubber meets the road’, the true measure of ROI for the UC investment will be based in large part on how well the company educates its users and transforms the corporate culture so that the users understand how to leverage the new tools effectively. Investing in a unified communications infrastructure without training the employees to use it effectively is like having a race car that nobody knows how to drive. Evangelyze Communications, a Microsoft Gold Partner and Voice Premier Partner, understands this need and has developed an end-user training course organizations can use to educate their users and transform the communicatios culture to make sure employees take advantage of the UC tools at their disposal.

The Value of VoIP

For new companies or old companies building new facilities, the value of VoIP is easier to define and the return on investment can be realized much quicker. Deploying only one infrastructure- the network infrastructure- for voice and data, rather than an IP network for data and separate wiring and infrastructure for voice presents immediate cost savings. For existing businesses, the value is still there, but removing and replacing an already present voice network is a harder sell in terms of ROI. As this article points out, there is value in VoIP, but businesses need to look carefully at the costs of licensing and the actual handset phones they will need. More importantly, to more accurately determine the value or ROI, the business needs to look not just at the ‘now’, but also project how they will grow and expand over the next 2 to 3 years and what the additional investment will be. On the other hand, VoIP is not an island an the sum total of the value of VoIP does not rest in the VoIP itself. VoIP is also a stepping stone to more comprehensive and robust unified communications solutions which can make the business more efficient and boost productivity, increasing the value of VoIP even further.

Quantifying the Value of UC

The features and benefits of unified communications sound great, but for most businesses you have to be able to demonstrate and quantify the actual return on investment. The fact that it is “very cool” does little for the bottom line. But, what if you could tell the CFO, or the Board of Directors that it will reduce the cost of communications by 10%, or that employee productivity will go up by 10%, or that customer satisfaction will increase by 21%? That might make a more solid case for UC. A recent study by Dimension Data shows just that. For more about the Dimension Data study, check out this article from Customer Strategy magazine.

Integrating Avaya with Microsoft UC

One of the promises of unified communications, particularly Microsoft Unified Communications, is the ability to leverage the existing telecommunications infrastructure. Selling UC to upper management and proving the ROI is significantly more difficult if it means ripping out and disposing of the entire existing communications infrastructure to replace it with a new UC infrastructure. Avaya wants to make that integration and incremental adoption that much easier by providing detailed guidance for making it happen with Extend the Value of Microsoft Office Applications with Avaya Unified Communications.