Unified Communications Featured Article

Maximizing ROI for a Unified Communication and Collaboration Solution and Making the Business Case


June 27, 2011

As unified communications and collaboration (UC&C) solutions further evolve and deliver more and even better tools, more and more organizations are considering the move. Calculating the return on investment (ROI) for any new solution is critical in measuring and understanding its business value, but with UC&C systems, the complex set of variables can make it difficult to quantify. If we stay focused on narrowing ROI down to some core components – total investment and revenue gains – you can not only determine a definitive ROI and make a business case for your deployment, but also maximize the return on investment.

Total Investment

The most immediate on the list of considerations is the cost of implementing UC&C.  Take care to first assess your needs and then assess the market. There are several factors to the total investment amount that should be included, and failing to consider any one factor can negatively impact your ROI.  You should remember to include:

  • Cost of labor for the deployment
  • Price of any new equipment or software necessary for implementation
  • Cost of rented or leased equipment
  • Opportunity cost, or the costs associated with choosing this specific solution through a due diligence or other selection process
  • Monthly or yearly ongoing service or maintenance costs
  • Cost of users training
  • Cost of archiving
  • Savings & Revenue Gains

 

Streamlined communication, and the more effective and productive it can make your organization, is a huge attraction for nearly every shape and size company, but evaluating it numerically can be complicated.  When determining ROI for unified communications, you should consider the revenue that will be a direct result of implementing the new technology, as well as the savings that your business will incur.  There are three major areas where unified messaging savings and profit can be quantified. 

1. Employee Productivity. Consider how much time each employee is likely to save with the implementation of this new solution.  Using an average hourly rate for all of your employees, you can add up the savings over specified intervals, per week, per month or per year.  For example, most research states that a UC&C solution saves an employee an average of 30 minutes per day.  If the average hourly wage is $30 per hour, you can estimate the dollar amount saved per employee per day.  Added up among all employees for a month or a year, this can quickly amount to 10’s or 100’s of thousands of dollars in savings, possibly even millions for larger enterprises. This is your most dramatic and quantifiable piece of ROI metric. The new breed of product in the fast evolving UC&C market delivers many more integrated features for a more connected experience, so these productivity gains are even more amplified. 

2. Increased Sales and Better Customer Service.  The time saved from using unified communications can be dedicated to taking more calls, which cuts down on hold times and can increase sales that may have been lost due to missed opportunities.  Also, when employees are able to assist customers in real time or more quickly connect with their co-workers and get a customer the information they need, the result will be faster resolution times, increased sales, and a much improved end user experience. Other unified communications tools like instant messaging and rich presence allow you to do this.  Determine the average number of sales that are typically closed and your total sales revenue.  When you factor in more calls being taken, along with shorter hold times, decreased call lengths, faster resolutions, and a better customer perception of your business, you can determine a reasonable estimate of your increased sales.

3. Monthly Service and Administrative Savings.  Consider the hard numbers for how much you will save on your communication services each month.  By eliminating the need for a variety of separate service-providers, companies will almost always see a marked decrease in monthly service expenditures. The reduction in management overhead needs to be considered here as well, what time saved will any administrative staff have daily, weekly, or monthly and the average cost for that time. They, like all system users, can use that spare time on other projects and revenue generating resources.

Determining Your Point of Return

Your payback horizon, meaning the point at which your business begins to see a profit from implementing unified communications, is a relatively easy calculation.  By annualizing your savings you can come up with a clear monthly average.  Each month, subtract the monthly savings from your total investment costs.

Calculating ROI

A positive ROI occurs when reduced costs, coupled with increased revenue, exceed the cost of implementation.  The formula for calculating a company ROI:

ROI = [(Revenue-Investment)/Investment]*100

At the start of any initiative ROI will be -100% because you will not have earned any revenue or savings from using unified messaging.  At your point of return, your ROI will be 0%, where return equals the investment you put in.  Once your revenue begins to exceed the initial investment, you will begin to have the positive return and from there your ROI ratio will continue to grow.

Conclusion

The better your research into solutions and the more well thought out the deployment, the more you can maximize the ROI for unified communications. The market is moving rapidly and there are more flexible, more feature rich solutions with the same enterprise level reliability as many of the established vendors, so do not shy away from looking at all of your options. These new solutions are building in all the tools that businesses need and are delivering better ROI on average due to lower initial deployment costs, and better gains in production in the areas we discussed, productivity, ease of administration, and better customer service and end user experience.


John O Cooper V is the Director of Sales for IceWarp Inc., and oversees the sales and marketing direction for North America. To read more of John's articles, please visit his




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