Adam Gartenberg's Blog

Business Analytics and Optimization, IBM and Social Marketing

The ROI of Unified Communications & Collaboration

During the Unified Communications & Collaboration keynote at Lotusphere, Bruce Morse asked the following question: "How many of you feel like you can... come up with a cost justification for a new UC project?". As expected, only a few hands went up. While there were certainly demos and product roadmaps, this keynote was about arming our customers and partners with enough information to justify their projects on the basis of quantifiable ROI. From the conversations I had after the session, it was the right message at the right time. So much so, that I'm including a portion of the transcript here for future reference.

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.

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.

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.

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.

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.

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.

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.

For an evaluation of this analysis, see Eric Krapf's post on No Jitter: Lotusphere Message: Yes There is a UC ROI