I caught a couple of blog posts on the IBM Keynote for UC (Lotusphere Message: Yes There Is a UC ROI) and then one on the Sametime blog (see below). A few good tips and examples but also some "buyer beware" tactics that folks should be aware of. Overall - I give IBM 3 Thumbs-Up and 5 Thumbs-Down:
The ROI of Unified Communications & Collaboration
Let's take a company - we'll call them Renovations, Inc. - with 5000 users.
On average - using suggested retail prices, it would cost approximately $450K to purchase 5000 Sametime licenses including maintenance, two hardware servers, pay someone to plan and install the software and servers, and pay an administrator to maintain the system.
Thumbs-Down: The concern I have here is that the total cost of ownership is not clearly outlined, a reasonable TCO model would establish a timeline (say 3 years) and include the total costs, including various weighting factors for planning, operational support, integration costs, help desk, change management, and so on. IBM is being very selective (almost dismissive) of the costs to introduce, deploy, and maintain the system.
Let's talk about the potential savings that Renovations could realize in just one year. These figures are based on our experience from similar deployments as well as IBM's own measured cost savings. By using IM or voice chatting, we have found that users can, on average, eliminate 5 telephone calls per day. At an average rate of .02/minute and 4 minutes / call, Renovations could save $480K annually.
Thumbs-Up: It's important to note here the different between channel switching (from telephone to IM or VoIP chat) vs. time-saved by reducing phone calls. The example is correct in that there are some costs associated with telephones (and international calls as outlined below) that can be avoided if you use another communication channel. That's a real opportunity for business and IT strategists to consider.
Thumbs-Down: The "time saved" argument is one that has been used over and over again to justify technologies and for the most part - these arguments rarely deliver the level of demonstrable savings promised. Using the soft productivity argument might get the project approved - but it may not always result in benefits people can actually measure. The reason is that if you save someone 10 minutes it does not mean they will take that 10 minutes and apply it to real work. The more structured and directed the activity is (e.g., call center) the better that argument resonates. But the more discretionary the work, there a greater chance that the person will just chat with a co-worker, go grab a coffee, etc.
Anyone who travels internationally knows how expensive it is to use your hotel or mobile phone. If you spend 5 days on your international trip and make just 1 hour of calls a day, with international roaming rates, you will spend over $380 per trip on phone calls. If instead you use Sametime to make your calls over your WiFi connection, you can avoid these international fees. In the case of our Renovations example, if only 5% of their employees make one international trip per year, that would equate to over $95K in savings a year.
Thumps-Up; Good example - there are real cost avoidance opportunities in this type of scenario.
If 1000 of the employees in Renovations are using hosted conferencing services, like WebEx Meet Me, which charges $39/user/month, you'd be spending $470K a year. You could eliminate these recurring charges by using Sametime's emeetings…and pick up a whole lot of incremental capabilities.
Thumbs-Down: I dislike this example because IBM fails to accurately portray the total cost of ownership for an on-premise implementation of Sametime vs. a SaaS solution. So I actually would take this statement as vendor posturing.
And let's not forget that e-meetings can save you travel costs as well. We found in IBM, we spend on average around $1100 per person per business trip, which is in line with industry averages. If Renovations converted just 130 meetings during the year to online meetings, eliminating the need for an average of 3 people from traveling per meeting, they'd save over $445K annually.
Thumbs-up: Using web conferencing to reduce travel expenses is a very well-known best practice. Organizations should be looking at how they are approaching web conferencing and how that decisions aligns with where they are going with UC.
And if you operate a call center, it costs on average $10 to handle a single customer call. If Renovations cut 50 calls/day by presence and IM enabling their website, they would save up to $120K.
Thumbs-Down: This example is a stretch for me - a big stretch - most customer-facing applications on web sites that are handled by call centers do not use off-the-shelf generic IM products. They typically use real-time collaboration tools that are included within their call center suites and/or CRM applications. The reason is that call centers do a lot of multi-channel management so you do not want someone involved in an IM chat to appear available to handle a phone call or email response. You need to integrate on-hook/off-hook signaling, integrate with other customer response management tools (telephone, web, e-mail, IM, etc). IBM is correct that organizations should be looking at these tools - but incorrect that they should look at IBM and Sametime.
If you add up all these potential savings, it equates to over $1.6M in one year alone…all from an initial investment of $450K for Sametime. ... And remember, these are undiscounted retail prices. That's 3.5X the initial investment…and the ROI just gets better and better in year 2 and beyond... And we haven't even gotten into the productivity savings.
Thumbs-Down: Productivity savings are very difficult to prove. As I mentioned up above - the more transactional and structured the work environment, then time saved arguments can actually be proven in many instances. When information/knowledge workers are involved, there's more leeway in how work is done making productivity a difficult thing to prove. We can pontificate on the productivity savings coming from UC - they make for nice project proposals. But it's very difficult to prove the "because of this, therefore that" impact on real operational savings and impacts to the bottom line.
Hi Mike - wanted to let you know that I posted a reply to your commentary on the Sametime Blog. http://www.thesametimeblog.com/sametimeblog/sametimeblog.nsf
Posted by: John Del Pizzo | February 04, 2009 at 01:09 PM
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Posted by: Overseas calls | November 05, 2010 at 12:03 AM