ROI study sheds light on conference benefits (1)

it's not just GREEN IT ...

It's not just with Green IT that ROI calculations are a must. Conferencing is very much at the centre of most discussions on that topic at the moment. I believe that Cisco's much touted launch of its new telepresence system a couple of years ago has been very instrumental in putting conferencing - and video conferencing in particular - on top of the business agenda. The recent interest in environmental issues  (as in our new CO2 saving tool)  - no longer disconnected from business - has also triggered an outstanding revival in the conferencing market. Similarly, the accelerating pace of globalisation and the fact that business teams are now increasingly scattered across different regions is no longer a subject for the likes of Charles Handy (who warned us more than 13 years ago that virtual organisations were our future) but a reality that almost all knowledge employees have to live with and a potential opportunity that the most nimble of us can leverage. No doubt then that the demand for conferencing tools is rising.

working in the global village

My extended team is made of people reporting to all parts of the organisation. One of them is in Virginia, another is an American based in the UAE, most others are based in the UK and France, not to mention all our counterparts from regional Marketing teams, and namely the EMEA Marketing teams based in Germany and the Nordics. This reality is certainly one that many a manager reading this blog will not only understand but relate to. How on earth do you get all these people to work together without audio and web conferening? And I'm not even mentioning virtual meetings with clients. To us there is no question that we need these tools to do business. Still, that doesn't mean we shouldn't try and measure the return on investment for such tools, be it to justify one's investment or even just to better understand the benefits which can be derived from the use of such tools.

hard facts and numbers

Webex - which was acquired by Cisco in early 2007 - has commissioned a number of white papers on the subject including one on the subject of the ROI of web conferencing ('Measuring the True Business Benefits of Web Collaboration') which was developed by Frost & Sullivan in 2005 (access the entirety of the Webex white papers at http://www.webex.com/smb/webex-white-papers.html). This white paper is particularly interesting in that it's an in-depth study of the benefits which can be derived from the use of Web conferencing over a relatively long period of time. Webex and Frost have collected data from a major Fortune 500 company in the high tech sector in two major departments: sales and training.

Beyond the major qualitative benefits listed by Frost (environmental impact, improved communications in a globalised economy to cut a long story short, re the above example), the main takeaways from this study are quantitative. And the main quantitative benefits aren't quite what most people would think they are in the first place. In most discussions I've had on this subject, the first item which springs to mind is travel cost reduction. In essence, this is not - at least not entirely - a false statement. Conferencing - and Web conferencing in particular - enables firms to curb their travel expenses. Yet, business travel is a source of revenue for some and also a source of motivation for managers. Managers might be winging a lot about travel  ('you know, it's terrible, I was in Buenos Aires yesterday, in London today, this is wearing thick') but you cannot deny that business travel is also a status thing, it shows your position in the company, and this is a item against which we already fought lost battles in the past. Any time we were advertising video, audio or web conferencing to business people, we had to walk on eggs and avoid mentioning cost reduction (post-advertising feedback surveys left no trace of doubt on this point, we made sure, towards the end of the 1990's that we avoided using that selling argument). Things are changing now, and airlines like Cathay Pacific whose revenue hinges mostly on business travel are starting to experience problems. Yet, oil prices rise and fall, and as soon as they fall, this argument tends to get weaker and weaker. And alternative energy sources are also possible. Will that make conferencing obsolete? I don't think so.

not just a matter of travel cost reduction

And the reason why I don't think so is clearly stated, black on white, by Frost on the Webex white paper for Web conferencing: the overwhelming argument which makes conferencing a must has nothing to do with travel cost, it's got to do with productivity. Anybody who uses web conferencing and audio conferencing extensively will be able to tell you why. This very morning I started my day with a conference between our Dubai team member and the representatives of our emailing system provider. The company is American, but its business development manager is based in Melbourne, Australia. My only chance of catching up with them is by waking up early and starting a screen sharing session in which I can show them my statements of requirement. At noon, I will have another conference scheduled with a small SI based in the south of France with whom we are working on a regular basis, although I haven't seen my counterpart physically for years. Later today, I will also have a status call with our teams in Virginia or Atlanta. How on earth could I do that without web & audio conferencing? We have clearly a case here where a collaborative tool like web conferencing is enabling people to do things that they wouldn't otherwise be possible.

The added value brought by Frost's study is that it enables us to put numbers to back up our first impressions. In part two of this story we will then focus on these quantitative benefits and describe them in detail. We will review the numbers and compare them. In the third and final part of this article we will deal with the critical analysis of this ROI and its limitations.