Justifying Unified Communications Investments Today

Justifying Justifying Justifying Justifying Unified Communications Unified Communications Unified Communications Unified Communications Investments TodayInvestments TodayInvestments TodayInvestments Today

Don Van DorenUniComm Consulting, LLC

100 American RoadMorris Plains, New Jersey

USA 07950+1 (973) 229-7185

[email protected]

© 2008 UniComm Consulting, LLC 2

The Theory: Justification Methods

� Cost Savings

� Measurable Benefits

� Productivity Potential

Let’s look at each…


UC Justification through Savings

� 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


UC Justification through Benefits

� Benefits are measurable business improvements� More productivity from existing staff

� Higher sales per rep due to better customer response� Increased orders without adding administrative staff

� Lower cost of goods or services� Design new product in less time� Finish service calls in less time due to better information

� Better customer satisfaction and retention� Increase in repeat business from typical customer

� Increase in competitiveness� Customers shift to your company for better service

� Better corporate citizenship� New solution is “Green”� New solution lowers business risk through compliance


UC Justification through Productivity

� 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 and Justification

� 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


Tools to Measure Business Investments

� 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


Applying the Theory to UC –Investment Justification Points

� Don’t get off on the wrong foot� UC does not require “rip and replace” approaches� You don’t have to “boil the ocean” and convert the entire

company

� We are dragging around baggage from earlier mistakes

� The vendors are making it easier � New pricing constructs� Plug and play� Built-in tools to construct applications � Innovative, effective plug-ins

� Understand the power of “case studies”

� Involve managers most affected by the change to estimate benefits


What is Unified Communications?

“Communications integrated

to optimize business processes”*

* www.UCStrategies.com


What is Unified Communications?

“Communications integrated

to optimize business processes”

This is the This is the Key to Key to

JustificationJustification


Unified Communications:Two Categories of Opportunity and ROI

Helping individual users

manage their communications

Enhancing business activities

with integrated communications

UserProductivity

BusinessProcess


Comparing Deployment Approaches

UC User Productivity Tools

Easier More Difficult

Ease of Understanding, Designing, and Implementing

Corporate Benefits Realized

Modest Significant

UC Integrated Into Business Process

& Workflow


Early Perceptions Differ From Eventual Opportunities

� Street lamps and electricity

� Visicalc and 1-2-3 and personal computers

…and dozens more


How to Evaluate Justification Opportunities

� Communications industry “flipped on its side” and supported by standards, open interfaces, SDKs

� Emerging ecosystem of developers and applications

� Transformation to software-controlled communications, integrated into every application and portal we use

If we limit our vision of Unified Communications

to only the User Productivity opportunities,

we will misunderstand the impact of

where and how this market will develop

How does that change how work gets done?


UC Applications in Two Categories or “Zones”

UC – User Productivity

� User-oriented tools� IM (with presence)� Softphones� Mobility support� Conferencing

� For Generic groups (~ COS)or Enterprise-wide

� Saves “xx” minutes per day

� Often the “sizzle” of VoIP

UC – Business Process

� Process Optimizations� Rich Presence (with IM)� Roles/Skills vs. Names � Software-assisted� Mobile Information Delivery� Collaborative Workspaces

� Targeted to process groups

� Involves System Integration

� Cut Costs, Drive Revenues

� Perhaps a good place to start

� Builds acceptance and understanding

� Still requires adoption support

� Area of greatest benefit and ROI

� Source of business differentiation

� Similar to contact center investments


Instant Messaging – Time Savings

Sage Research,Incfor Cisco Systems

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.


UC Applications in Two Categories or “Zones”

UC – User Productivity

� User-oriented tools� IM (with presence)� Softphones� Mobility support� Conferencing

� For Generic groups (~ COS)or Enterprise-wide

� Saves “xx” minutes per day

� Often the “sizzle” of VoIP

UC – Business Process

� Process Optimizations� Rich Presence (with IM)� Roles/Skills vs. Names � Software-assisted� Mobile Information Delivery� Collaborative Workspaces

� Targeted to process groups

� Involves System Integration

� Cut Costs, Drive Revenues

� Perhaps a good place to start

� Builds acceptance and understanding

� Still requires adoption support

� Area of greatest benefit and ROI

� Source of business differentiation

� Similar to contact center investments


Five UC-Business Process Applications To Fix Communications “Hot-Spots”Application

AreaBusiness Impact Benefits

Contact Management

Dramatic increase in “first call resolution”

Shorten sales cycles; Increase customer sat.

Seamless Information for Mobility

Deliver information when needed; without using others’time and effort

Avoid call backs; speed resolution; reduce support costs.

Resource Identification and Problem Resolution

Immediate access to “right”skill or knowledge; automatic follow-through

Eliminate delays; speed transactions; increase revenues; automate administrative tasks

Collaboration Acceleration

Speed project completion with less effort; improved information access

Eliminate delays; improve quality; cut meeting costs

Job-Specific Information and Comm’n Portals

Communications functions embedded at point of need

Improve speed and accuracy; use best comm’ntools for job


Use “Value Chain” to Find Applications

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Representative Enterprise Value Stream

Market Sell Make Deliver ServiceDevelopEnterpriseSupport

Source: M. Parker; BCR Magazine June 2007

CollaborationAcceleration

ContactManagement

Resource ID &Problem Solving

Comms EnabledJob Portal

Seamless Info.For Mobile Staff

R&D

Engineers

Marketing

Sales &

Support

Manufacture

Logistics

Support

Services

IT, HR,

Finance

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“Top 5” UC-Enabled Applications Address Process “Hot Spots”


Top 10 Clues to a “Hot Spot”

Does the process involve:� Serving or routing incoming contact requests?

� Finding / waiting for specific resource, skill, or person?

� Queues (e-mail, VM, tasks), especially from customers?

� Prioritizing, scheduling, logging responses to queues?

� Communication (now or future) triggered by process step?

� Getting approvals to continue or complete process?

� Consultative processes (analysis, negotiation, decision)?

� Calling / messaging for information, especially when mobile?

� Collaborative processes (R&D, Marketing, HR, Legal, Management)?

� Interruptions (EM, VM, IM, Call) with / for info, status, query?


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?


UC Value by CategoryBenefits Per User Per Year Based on UniComm Consulting Modeling

Individual User Productivity

� Conferencing Gains:Increase UtilizationReduce Travel, Setup

$3,034

� Comm. Efficiency:Avoid call/message waste via IM & Presence

$1,137

� Eliminate Delay:Find resources faster via IM & Presence

$1,005

� Toll Cost Savings:Assuming 25% Int’l calls

$246

� Admin TCO: $43

Business Process Transformation

� Increase Sales:via UC Contact Management

$115,909

� Speed Projects: via Collaboration Acceleration

$95,000

� Lower Process Costvia Comm-enabled Job Portal

$12,880

� Cut Operat’l Costs: via Resource ID, Problem Resolution

$11,875

� Drive Transactionsvia Info to Mobile Devices

$7,813

Model based on cross-vendor use cases for Unified Communications


� Business Process: Distributor Sales

� Job Type: Field Sales Reps

� Business Problem: customer contact delays� Distributors cannot reach sales rep promptly

� Business Impact: Lost sales, customer

dissatisfaction

� UC Solution: one-number, find-me software, presence� Reps publish one number; system “finds” them

� Reps access staff support via “find me” and presence

� Users use IM, directory dialing

� Measurable results: Tracking revenue increases

UC Application Example:Contact Management


UC Application Example:Mobile Information Delivery

� Business Process: Healthcare Sales

� Job Type: field sales; in-house sales, customer care

� Business problem: coordinating customer information � Field sales could not complete transactions

� Business Impact: multiple phone calls, delays

� UC Solution: mobile device “portal”� Field sales accesses information directly,

reducing number of calls

� Reps call / message from client on Blackberry

� Reps update records right after meetings

� Measurable results: Eliminate calls, speed sales


UC Application Example:Resource ID & Problem Resolution

� Business Process: Network Provisioning

� Job Type: Network Operations Engineer

� Business Problem: Improve speed and accuracy while cutting costs. � Customers wanted faster changes

� Business Impact: high costs and

customer dissatisfaction

� UC Solution: Integrate Presence/IM with ERP Network Management System� Software immediately finds right engineer

� Opens IM/Chat window to solve problem

� If required, click for voice call

� Measurable results: Reduced costs 75%, improved response time 80%, while volumes increased by 70%


� Business Process: Internal meetings

� Job Type: Health care staff managers

� Business Problem: reducing meeting cost and travel time � Managers required to drive to meeting location

� Business Impact: business delays, travel costs

� UC Solution: Collaboration through videoconferencing� Managers meet from desk or local meeting rooms

� Meetings scheduled through system

� Users avoid 30 trips per day to other buildings or sites

� Measurable savings: $750K / year, time and expense

UC Application Example:Collaboration Acceleration


UC Application Example:Comm-Enabled Portal

� Business Process: Retail Financial Services

� Job Type: Financial Advisor

� Business Problem: Increase customer contact time from 30% to 70% of workday.

� Business Impact: Low contact time was impacting customer sat , revenues, margins.

� UC Solution: Integrate voice communications into Salesforce.com job portal� Click to call directly from follow ups, campaigns.

� Incoming calls link directly to client file, notes.

� Measurable results: Achieving about half the goal with this investment, moving from 30% to 50% customer face time. � Improved customer satisfaction

� Proportional increase in revenue per FA.


Summary: Justifying Unified Communications

� 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


Thanks For Attending This Session!

UniComm Consulting is an independent consulting firm, which helps clients incorporate

unified communications concepts and capabilities to help achieve business goals.

Please contact us if you have any questions about this presentation, or about how some of these ideas might apply to your company.

UniComm Consulting, LLC100 American Road

Morris Plains, NJ 07950www.UniCommConsulting.com

Don Van Doren+1 (973) 229-7185

[email protected]

Justifying Unified Communications Investments Today

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