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Observations on the unified communications market

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We recently conducted research on the Unified Communications (UC) market, and encountered some interesting results that run against prevailing wisdom.

1. Employees Are driving UC: At industry gatherings, one commonly heard opinion is that companies are deploying UC because employees are demanding these capabilities—they are using them in their private lives, or they are bringing consumer-grade technologies into the enterprise, such as web-based IM clients, or Skype for cheap long distance calls. But in our research, we don’t actually see this trend. When we ask companies what’s driving their UC deployments, employee demand, and use of free web-based tools, are dead last. Granted, we talk to IT managers, who may not look favorably on employees taking things into their own hands, and these answer may be more indicative of their need to maintain order in the network than true employee demand- certainly these types of behaviors are occurring in the enterprise. Instead, we encountered a different dynamic. Users generally play a very minor role, if any, in the decision or purchase process, but when it comes to UC, IT managers show a greater willingness to listen to user requirements and feedback on feature functionality. One measure of a successful UC implementation is whether employees adopt the new technology, and to ensure success, user input will be crucial in determining users’ needs.

2. The importance of ROI: A frequent topic of discussion is return on investment (ROI) associated with UC deployments. A recent press release stated that “unified communications can improve business productivity by up to 18% with up to a 250% return on investment.” In many areas, measuring ROI is straightforward, typically calculated off savings derived from the elimination of certain operational expenditures, such as reductions in long-distance charges when moving to SIP trunking. But UC is not necessarily about eliminating certain bills, but rather increasing the productivity of the workforce and overall company. That can make economics-based deployment decisions more difficult. A common approach is to look at time saved due to streamlining of processes, and the cost associated with that time. This works well in a call center (or similar) environment, where there is a high number of transactions, and by compressing the duration of each one, more transactions can be squeezed into the same timeslot. But according to our research, call center employees aren’t the beneficiaries of UC right now; instead, businesses are targeting executives and knowledge workers. In these environments, ROI can easily be overstated. For example, one shouldn’t assume that the time saved from using click-to-call (as opposed to manual dialing) will completely be put to productive use.

As it turns out, UC suppliers may be getting a break when it comes to demonstrating the ROI of UC deployments. About half of the companies we talked to didn’t require a return on investment, a higher percentage than for example, IP PBX deployments. The goal of UC is to increase productivity, and these companies realize that building an ROI model can be a contentious process, and thus discount a dollars and cents approach. Yet they understand that improving communications will have a positive impact on productivity. In cases where vendors do need to demonstrate ROI, it’s important to err on the side of caution. Raising the bar to high to make a business case more compelling will almost certainly lead to customer disappointment. Instead, vendors should expose the assumptions going into the model, and let the buyer manipulate them as they see fit.

Matthias Machowinski is Directing Analyst, Enterprise Voice & Data, for Infonetics Research.

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© 2008 Penton Media Inc.

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