InformationWeek
Defining The Business Value Of Technology
November 10, 1997
Users Turn To Audio Systems
Videoconferencing not always best
Budget Rent a Car recently rejected videoconferencing for training in favor of an online system that uses a combination of audio, graphics, and terminal emulation. The system, which the company calls the Budget Education and Communications Online Network, let the car-rental company cut its training costs from almost $2,000 per employee to just $156 per employee.
Budget, with nearly 1,000 rental locations throughout the United States and annual revenue of more than $2.7 billion, trains nearly 700 employees a year. Instead of sending employees to an out-of-town training class, the company is sending new hires to a training station, each located within an hour's drive of an employee's agency, that consists of workstations and headsets connected to an instructor v
ia two standard analog phone lines.
Trainees are given a phone number and pass code to dial into the instructor, who sets up the conference using MeetingPlace, a conferencing system from Latitude Communications in Santa Clara, Calif. The instructor then trains the new employees on how to rent vehicles to customers, occasionally taking control of the employee's terminal to guide the trainee along.
Budget estimates that it would have spent at least $4,000 per location-or $508,000 total-to install videoconferencing. The training system is priced at $492,000. More important, conventional phone lines are about half as expensive per month as the ISDN lines needed to support videoconferencing. Budget estimates it recouped the costs of the system, compared with the costs of out-of-town training, in about six months.
Budget considered videoconferencing. But vendors had trouble coordinating the company's online presentation with video, says Paul Kasten, Budget's director of training and development. "After four
weeks, they threw up their hands and walked away from it," he says.
Besides being relatively cheap, the audio-graphics system has also boosted customer service, Budget says. "It's because we're all singing from the same songbook, doing the same processes, and using the same methods," Kasten says. "We're doing business the same way in New York that we are in Chicago."
In the past, half the customer service representatives wouldn't even attend training, Kasten says. The out-of-town training also precluded Budget from hiring college students, single parents, and others who couldn't travel. Additionally, half of Budget agents leave within a year.
Budget is expanding the system to include other kinds of meetings. The company is now using it to teach employees how to manage their fleet of vehicles, and beginning next year, Budget will use the system for management training.
Rise Of Audio Teleconferencing
The audio conferencing equipment and services market rose 34% last year, to $2.1 billion, and is expected to reach $2.8 billion this year. The videoconferencing sector, up 18% to $2.7 billion last year, is expected to hit $3.2 billion this year.
Telecom carriers are jumping into the business. MCI last week rolled out networkMCI Net Conferencing, a service that lets people do document conferencing over the Internet by connecting through a Web browser.
Vantive Corp., a software vendor in Santa Clara, Calif., uses the MCI Web conferencing service to conduct product seminars with potential customers. Says Christopher Lochhead, executive VP of strategic marketing for Vantive: "Our customers appreciate the fact that they don't have to leave their desks to participate."
ho needs video? Some companies are finding that they can fulfill their basic electronic training and conferencing needs without the cost and bandwidth hassles of deploying video networks.
Audio teleconferencing is growing faster than videoconferencing, according to TeleSpan Publish
ing Corp., a market research firm in Altadena, Calif.
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