Q

How can you determine video conferencing ROI before investing?

Video expert Stephen K. Campbell explains what factors to consider to determine video conferencing ROI before making the investment.

My company wants to invest in a room-based conferencing system. How can I determine video conferencing ROI during

preparations, and what would be a reasonable amount of time to get that return?

Video conferencing investments have often been justified on the basis of travel cost reduction. Travel data can be analyzed based on possible video system locations. Assumptions must be made about the number of trips that might be replaced by video calls, along with calculations about the hard and soft costs. Hard costs include airfare, lodging, meals, taxis and shuttles. Soft costs consist of lost time while in transit; loss of efficiency due to jet lag; time lost for routine activities like meetings; and hardships imposed on the traveling employee, such as having to endure the stress of travel and time away from home. 

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Hard costs are easy to measure, while soft costs are more subjective. Measuring the actual achievement of travel cost reductions can be difficult, since intended trips that are replaced by video calls must be factored in. If a video call routinely replaces a trip, travelers will stop reporting that it was replaced by a video conference.

Companies are becoming more willing to justify video implementations based on its impact on the company culture rather than on the hard dollar savings that constitute formal video conferencing ROI. When video is effectively implemented on a wide scale and actively encouraged at executive levels, communications and collaboration improve. This can be especially significant between locations where personnel don't see each other frequently. Holding a meeting using video is more like an in-person meeting. Body language and facial expressions that are missing in phone conversations are apparent in video calls.

Implementing video is an investment in improved communications, closer ties between sites and improved collaboration. The video conferencing ROI of such improvements can be hard to quantify and difficult to justify. It generally requires top executive support to approve investments that are based more on faith than on hard dollars.

Video conferencing is becoming more mainstream, however, and its impact on employees is more widely understood. Younger workers are more accustomed to using video as one means of communications and are more inclined to expect it will be available. Companies that don't provide enterprise-grade video systems are more likely to find their employees turning to consumer and social media systems for video calls.

Video has a part to play in the communications strategy of companies whose personnel are separated by time and distance. Enterprises should think about how this technology can best be utilized for maximum corporate benefit and maximum video conferencing ROI.

This was first published in March 2014

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