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Telepresence ROI: People just as important as technology

Telepresence return on investment (ROI) is about people as much as technology. IT organizations must make sure that end users believe in the technology.

After years of disappointment with legacy video conferencing technology, telepresence offers a level of experience that can finally deliver return on investment (ROI) to enterprises.

IT organizations will find that good technology is only part of the ROI puzzle, however. People are critical to telepresence success, too. If IT forgets this fact, telepresence risks being an even more spectacular failure than the underused, low-definition, legacy video-conferencing rooms that populate corporate offices across the globe.

The people component of the ROI equation starts with the executive suite, according to Claire Schooley, senior analyst with Forrester Research.

"It really has to come from the top," she said. "If [executives are] lukewarm about it and don't think they're going to use it, and they don't think they can get a volume of users from middle management, then it's not going to work."

An executive team might order an IT organization to go out and install telepresence as part of a broader corporate travel cost-cutting initiative or as part of a corporate green policy focused on reducing the carbon footprint associated with corporate travel. But executives can't stay in the executive suite. IT organizations need to make sure that executives are visible in their use of the technology.

Schooley said executives should be demonstrating the value of telepresence firsthand to employees, holding internal meetings with middle management through the technology and prompting those managers to do the same with their subordinates.

A company can expect a reasonable ROI if telepresence rooms see a 60% utilization rate.

Much of the hype that surrounds telepresence focuses on reduced travel costs. And that will resonate with employees to some extent, particularly those who desire a better work-life balance and are weary of traveling across continents to meet with customers and distributed project teams. Cisco, one of the technology's biggest boosters, brags about the millions it has saved on travel expenses by mandating telepresence use across the company.

Schooley said she spoke to one company that is incorporating travel expense savings directly into the user experience so that employees can see how they are helping the company's bottom line. For instance, when users log onto the telepresence system, they put into the console data about how much flights and hotels would have cost had the user traveled to hold a face-to-face meeting. This helps users understand the dollars involved, and it also makes it easier for IT to calculate early returns on investment.

Schooley said, however, that telepresence delivers more than savings on travel.

"Eventually, it's going to be about the way you're able to do your work. You're able to accomplish something in two hours of a telepresence session that might otherwise take you a couple of days' travel," she said. "You're really able to speed up business processes because it's so clear that high-level negotiations and business deals and all kinds of things can happen within telepresence."

Schooley talked to one international manufacturer that was able to make high-level business decisions via telepresence that once required executives to travel across the globe. The packaging manufacturer's executives were able to look at mock-ups of packages via telepresence and make quick decisions on colors and layouts. Normally, such product design decisions would take weeks as executives traveled from the U.S. to Europe or Asia.

IT organizations will need to make sure that executives are ready to lead by example and demonstrate that telepresence is about more than cutting travel costs. They should emphasize how the technology is an opportunity to do one's work faster and to find more time to be home with one's family. This is especially important because not all employees will take to the technology right away. Older employees may feel uncomfortable with it. Some may view corporate travel as a perk and be reluctant to cut back on it. Still others will have unhappy memories of legacy video equipment that was too difficult to use and lacked the immersive quality of experience that most telepresence technologies offer.

"It's really about changing the way that you do your work, and that means not traveling," Schooley said. "You really have to look at changing the way people work because we are creatures of habit and change is hard. Some people are more flexible than others, so you have to consider that. I've talked to people who have been in business for years who say, 'I won't stop traveling. I really think I've got to be face-to-face with customers.' And many of them will have to be brought around gradually into the telepresence experience."

Of course, adoption will never get off the ground if telepresence isn't reliable. Employees have seen video conferencing initiatives crash and burn before because of poor video and audio quality and syncing, and because of complicated systems that are hard to use.

That's why many enterprises are buying telepresence as a managed service. Irwin Lazar, vice president of communications research at Nemertes Research, said his firm is studying enterprise telepresence adoption. Although the research isn't finalized, he said, it looks as if two-thirds of enterprises are buying dedicated bandwidth (i.e., overlay networks) for their telepresence installations. In fact, network service providers are becoming a critical sales channel in general for telepresence.

"What we've seen so far in talking to companies is that a majority of them are going to a dedicated bandwidth solution," Lazar said. "They're buying from AT&T and others. If they're going to be spending so much money on telepresence, they want a guarantee of performance, and they want to make sure that other applications on the network don't screw it up. So they go with a service that provides dedicated management services so they can get issues resolved quickly. What we're seeing is people want to leave their WAN alone."

These enterprises tend to buy their entire telepresence package through the carrier, including hardware, room setup and managed services.

The exception to that is the organization that has already made heavy investments in high-powered networks, with 10 Gb uplinks to a 40 Gb backbone. Lazar said that some universities, for instance, are investing in such high-bandwidth WAN technologies so they have plenty of room for running telepresence over those pipes.

This approach means that companies will usually buy their entire telepresence solution as a bundled service from AT&T, Verizon, Global Crossing or other service providers.

Let us know what you think about the story; email: Shamus McGillicuddy, News Editor

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