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7/30/2007
12:00 AM
Melanie Turek
Melanie Turek
Commentary
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Justifying Unified Communications: Where's the ROI?

More and more, I’m hearing people ask about return on investment when it comes to deploying unified communications—both from IT managers, who need the numbers to justify their purchases; and from vendors who want to give those numbers to their customers. That’s good news for the market, since it’s a sign of maturity and interest. But it also poses a significant challenge, since no one has yet come up with a knockout way to justify the technology’s price tag.

There are, of course, traditional methods of measuring ROI for communications applications. The first, simplest and most transparent is cost savings: By integrating various communications technologies and paying one set price for all, companies can save money (more if they bring the technology in house, but still something if they continue to purchase it as a hosted service). The idea here is to replace costly audio, web and video conferencing services with a single UC application. Other cost savings come from running UC apps on an IP network (which has nothing to do with UC per se, but which does deliver savings) and from avoiding phone calls by using presence and IM to ascertain whether a contact is available for a voice chat, or simply to have the exchange online and avoid the cost of the call altogether. These metrics are real and they can be measured, but most companies tell us they are less motivated by cost savings than just about any other ROI measurement. Plus, as we’re starting to hear from the VoIP trenches, the savings aren’t always as large, or easy to achieve, as promised.

A second popular ROI measure is quantifying the boost in “productivity,” which is usually measured in terms of time gained multiplied by the value of that time per employee. UC apps—especially presence and “click-to-connect” capabilities—can certainly decrease the time it takes to reach and communicate with someone else, theoretically boosting productivity. The catch is that no one really knows whether that additional time—much of which is measured in minutes, or even seconds—is actually used by employees for work-related tasks, so it’s anyone’s guess whether the application in question really delivers the hard-dollar return it purports to.

The other big claim for UC applications is that they allow companies to change their business processes, presumably making them more efficient and effective, and thereby positively impacting the bottom line. The trouble with this argument is that it assumes several things, most of which aren’t always (or even often) true: 1) that the company understands its existing business processes (and can describe and define them); 2) that the company knows what’s good and bad about those business processes; 3) that the company knows how to change those business processes for the better; and 4) that managers and employees alike are willing and able to embrace any such changes when they happen. Good luck with that.

Seriously, business process change can be a great thing, especially in customer support (including internal IT and external contact centers), where the impact of such changes can be measured, and where seconds and minutes do count. (The idea here being, if I change the “business process” so that, for instance, instead of sending an e-mail to a manager with a problem, I can look at a list of knowledge experts, see who’s available, and get an answer via IM immediately, I will save considerable time and serve the customer that much better.) But changing other types of business processes, such as how a product is manufactured, or how ideas get shared and acted upon, is both much more difficult and much less measurable.

Rather than assign a hard-dollar value to unified communications, I like to look at them as delivering parity. With the rapid growth we’re seeing in the number of virtual workers, companies must find ways to connect employees remotely, or they risk losing ground—not compared with their competition, but with themselves. That is to say, the workplace will look very different in five or 10 years, and without unified communications to support and enable presence-driven interactions among employees, companies simply won’t be able to be as productive as they are today (or were, five years ago).

Now I’ll admit, that’s a tough ROI story to sell to an under-funded IT manager and his or her CFO. But companies ignore it at their peril.

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