investment

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.

UC Cuts Costs by 78% for Ohio Township

What happens when you’re a large (the largest in the state) township in Ohio with an archaic, outdated communications infrastructure? In this economy, and in the state of Ohio in particular, money is not exactly flowing freely for IT projects.

As I have mentioned repeatedly here though- an investment in unified communications is not an expense. You have to consider the overall impact, the improved communications, and the more efficient processes. You have to look at the savings that will be generated once the unified communications platform is implemented.

In the case of Colerain Township, OH, the investment in unified communications resulted in a 78% drop in annual services costs for communication while vastly improving the communications infrastructure and enabling the local government to provide better service for its citizens.

Saving Money By Investing in Unified Communications

When is an expense not an expense? When the expense saves more money than it costs. There is a reason that so many organizations are continuing to invest in unified communications deployments. They are laying off workers, freezing pay, and cutting budgets in other areas in response to the recession / depression and general state of the global economy.

But, investing in unified communications is seen as a cost-cutting measure as well as an investment in technologies that will help the organization to communicate more effectively and operate more efficiently so it can continue to get more done with fewer resources. In a time when people and budgets are being cut, unified communications almost becomes an imperative so that the people who are remain can still get the job done and deliver quality products and services for customers.

That is just my $.02 (which may only be worth half a cent in this economy- so take it for what its worth). You can get another point of view on the subject from this CIO.com article: Unified Communications, Collaboration Can Help Save Cash.

Security Funding First To Go In Tough Economic Times

Let’s be honest - even in a good economy, when business is booming, security is still a reluctant after-thought in most cases. Why do we have Sarbanes-Oxley, HIPAA, GLBA, PCI DSS and other legislation and regulatory requirements? Because companies can’t be trusted to do the right thing of their own accord. Had they done that, the situations that sparked the creation of each of the various laws and guidelines would never have occurred.

Spending on security is like buying insurance. You spend money on health, auto, home, and life insurance (and perhaps others), but you hope to never use it. If you never get in a car accident in your life, that could be more than $50,000 you spend in your driving lifetime to protect yourself against something that never happens. You could buy two new cars outright with cash and just forget about the insurance.

Companies tend to look at security like that as well. There is no return on investment (ROI). There is no upside gain. Budget is being allocated and money is being spent to safeguard against a gamble that may never come to pass. All that money may just be wasted. Even before there were laws demanding a baseline minimum of security controls, many companies waited to address security until after an incident. At least once the company experienced the pain of an enterprise-wide malware infection, or a data compromise of sensitive information they had a barometer against which to measure the cost of making sure it didn’t happen again.

So- in a recession, or a depression, or even just a quarter of down revenue, security is often one of the first things to go. However, we do have SOX, and HIPAA, and GLBA, an PCI DSS. That means that aside from the pain the company will feel if there is a data breach or malware compromise, and aside from the damage that will be done to the reputation of the company if customer data is leaked or compromised in any way, there are also additional fines and consequences, including possible jail time, to try and create the proper ‘incentive’ for companies to do the right thing.

But, money is tight. According to the article ‘What Can You Afford NOT To Do On IT Security?‘ from CIO.com, budgets may not be cut from 2008, but they also won’tbe going up in many cases. Personally, I think that more will be cut than this article suggests. Unified Communcations and VoIP security administrators will need to be more resourceful and perhaps look into the free and open source tools available to help protect the unified communications infrastructure. It is possible to protect the network on a minimum budget, but the learning curve may be higher and getting support requires more initiative and effort than simply dialing the vendor’s toll-free number.

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.