Almost everyone believes unified communications (UC) will be a major factor in the networks of the future, but how do you justify investments in today's UC technology? What elements offer the best payoff? This presentation offers real-world examples of UC investments that paid off, and will describe how the payoff was achieved. Get guidelines on whether you can bank on "soft" productivity enhancements to justify the cost of implementation and whether such gains will pass muster with your CFO.
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� Savings eliminate or reduce current expenses� Eliminate equipment and maintenance� Eliminate support and administration workload/staff� Reduce staffing in operating unit
� Fewer sales people to cover same territories� Fewer clerical staff if customers use self-service
� Reduce assets required� Less office space if field people work from home� Less inventory if orders are processed more quickly
� Reduce or eliminate recurring costs/fees� Lower telephone tolls if using internal IP network� Reduce travel expenses
� Benefits are not measured but seem valuable� Most often proposed by vendors
� Beware: “This will save 15 minutes per person per day.”� Ask how to convert that to savings or benefits
� Some solutions are obvious and compelling� Cell phones, even though not measured in most cases� RIM Blackberry, as e-mail became core to business process
� Weakest of three justification types� Solutions with productivity-only justification usually wait until
bundled into purchase of core products (e.g. display screens on IP phones)
� Investment includes:� Equipment purchase or lease
� Including net write-offs of any displaced equipment
� Installation, professional services and training� Cost of operating the system/solution
� Staff� Software or hardware upgrades during lifecycle� Maintenance and other support services� Recurring payments/fees (e.g., network or wireless charges)
� Lay out investment in spreadsheet � Monthly, quarterly or annually, depending on the project
� Use investment accounting tools to calculate and compare
� ROI, IRR, Payback, and NPV are used to evaluate business investments
� ROI: Focus on profitability; 100% or more is compelling� IRR: Focus on capital use; 50% per annum or more is compelling� Payback: Focus on cash use; less than one year is compelling� NPV: Compares different investments from today’s perspective� Leasing or hosting can improve these metrics
The value in “today’s dollars” of investments and future benefits
NPV (Net Present Value)
ROI (Return on Investment) Ratio of return to investment, after paying off the investment
IRR (Internal Rate of Return) The “interest rate” earned on the investment amount over time, after recovery of the investment
Payback Period Time (in months) to save enough to pay back entire investment and reach positive cash flow
Typical “Survey” of Savings for UC-User Productivity
For ROI in this category, link the time to the completion of high-volume activities that are eliminated or reduced by the new UC tools.
E.g. With IM most companies see reductions in phone calls (time and $), e-mail messages (time and $), and faster completion of some tasks or transactions.
ROI for Improving Business Process Is Much Larger than for User Productivity
� A simple case study:� Joe processes “applications”; needs specialist input� Without UC:
� Calls friend Sally, leaves voice mail, puts folder aside� Sally (who was on vacation) calls back three days later
� With UC:� Uses skills-enabled presence to talk to Howard right now
� What’s the difference?� “User Productivity” tends to focus on aggregating the two
minutes Joe “lost” in leaving a message for Sally� But, the business lost 3 days of time-in-process
� The key ROI question: What is the value of that 3 days?� Cost reduction from faster processing?� Close sales more rapidly, with higher close rate?� Improved customer satisfaction from rapid response?
� Enable demonstrable cost reductions:� Conferencing � IM, or peer-to-peer voice connections, especially international� Consolidate administrative support
� Enhance “user productivity”, but link to business process� Presence-aware communications alternatives� Single “number”; many communications modes� Access communications from within an application
� Transform how work gets done: “Communications integrated to optimize business processes”� Reduce cycle times � Eliminate process steps� Reduce staff requirements
� Use investment evaluation tools (ROI, IRR, NPV) and case studies to present justification to management