Virtual Meetings Yield Real Results

U.S. companies turn to conferencing technologies to deal with travel restrictions
Lengthy delays at airports and travel restrictions imposed by some companies are making it harder for businesspeople to meet face-to-face. A growing number are turning to conferencing technologies as an alternative to on-site meetings.

The Automatic Transmission Engi-neering Operations Group of Ford Motor Co. last month planned to host a meeting to determine the future direction of new transmission technology. Participants were to include three Ford divisions and two partner companies, one based in Germany. "The meeting had some big implications for all the parties involved," says Craig Renneker, Ford's executive engineer for new programs.

But plans to meet in Michigan were abruptly scrapped following the Sept. 11 terrorist attacks because one company instituted a strict ban on all business travel. Instead, Ford turned to videoconferencing-it has PictureTel videoconferencing equipment in place in meeting rooms in its plants in Dearborn, Mich., and Cologne, Germany.

While the experience wasn't as good as meeting in person, the meeting went well, Renneker says. "The technology was so strong we could see gestures, facial expressions, everything," he says.

More U.S. companies are looking at and using conferencing technologies-teleconferencing, videoconferencing, Web conferencing, instant messaging, and online collaboration-as they struggle to keep their business moving forward in a sluggish economy while coping with concerns about airline safety, longer lines in airport terminals, and canceled flights.

Nearly half of 1,609 companies surveyed after the attacks by market-research firm the Masie Center say they've increased use of digital collaboration tools such as audio, video, and Web-based conferencing. Videoconferencing equipment maker Tandberg Inc. says inquiries about its products increased by 30% following the attacks. And Qwest Communications International Inc. reports a 30% increase in usage of its Web-based and telecommunications conferencing services in the weeks since Sept. 11.

It's too soon to tell whether a fundamental change in the way business is conducted is taking place. Use of videoconferencing jumped after the 1988 crash of Pan Am Flight 103 and the outbreak of the Gulf War but then quickly fell once business travel returned to previous levels.

But it may be different this time. Conferencing equipment and services have become less expensive and offer higher-quality sound and video than what was available a few years ago. Well-established videoconferencing standards also have reduced incompatibility problems that used to plague the industry, although there are different standards for IP-based systems and those that use the public telephone network.

"The impact now is more sustainable because today's technology offers a better value proposition," says Roopam Jain, an analyst with Frost & Sullivan. The cost of a videoconferencing system has dropped from around $35,000 or more several years ago to less than $5,000, he notes.

Prudential Financial Inc., a $26.5 billion insurer in Norwalk, Conn., also has videoconferencing rooms set up in its offices-and the rooms have never been busier, says chief learning officer Frank Bordonaro. "The total amount of business communication is ever increasing," he says. "But I believe we won't see a rise in travel to meet business needs." Instead, he says, businesses will spend more on technology to facilitate communications such as videoconferencing.

Bud Parer agrees. The IS manager of the CompuMotor division of Parker Hannifin Corp., a $6 billion hydraulic equipment manufacturer, oversees the division's California and Ohio locations using PictureTel conferencing equipment. He doesn't plan to invest in desktop Web-conferencing equipment because, he says, his videoconferencing equipment works well. "Using videoconferencing is like walking into a conference room," he says.

Ford's Renneker says he uses instant-messaging technology, videoconferencing, and Web-based conferencing almost daily to talk to engineers across the United States and in Germany. "I had planned to visit Germany every three months," he says. "With travel restrictions, I can't. But I've noticed that if we try a bit harder, we can still communicate well."

Still, some companies are reluctant to use technology to replace more conventional methods of doing business, such as taking a client out to lunch. But the continuing problems of air travel are causing many companies to take a new look at conferencing technologies as an alternative to business travel.

Tandberg president Karl Hantho had to take a business trip last week. He left his home in northern Virginia at 2:45 a.m. and drove an hour to the Baltimore-Washington International Airport to catch a 6 a.m. flight to Chicago. While the flight takes only a little more than an hour, Hantho says, the extra time was needed to ensure that he would make it through airport security before the plane took off. Still, he only had "an extra 15 minutes to spare, that's it," he says. "Do that a couple of times and it gets old real quick."