ROI doesn't always pan out with unified communications

Return on investment is a big but unfulfilled promise of unified communications.

The well established potential for cost avoidances and lower operational budgets with UC don't necessarily pan out in practice, says Henry Dewing, an analyst with Forrester Research. “They're not deriving the benefits they expected,” he says.

His research finds that about half the respondents have no plans to deploy UC this year, about half saying they don't have the budget and about half saying they don't see the business value.

“When you talk to end users, they want a 12-month return and a triple digit ROI,” Dewing says, and that is not achievable in many cases.

Establishing ROI is difficult for some businesses because IT directors that propose use of UC don't calculate a baseline cost of certain business functions before UC that they can compare to the costs after an implementation, he says.

For example, Collette Vacations, a Pawtucket, R.I., business that sells travel packages got into UC for the functionality, not the savings so the company hasn't been tracking it religiously, says Bill Dziura, executive vice president of IT for the firm.

Collette uses an Avaya-based UC system integrated with Microsoft's Office Communications Server. The system was installed at the end of 2007 as part of an upgrade from a 20-year-old Executone TDM phone system that included a rudimentary call center.

The new system gives mobile workers access to the VoIP network via softphones in their laptops, access to presence information of other employees, voicemail accessible from their Exchange e-mail, and SharePoint collaboration and content management.

All users have extension dialing, full presence via OCS, and conferencing that is used for training with features such as instant messaging so participants can communicate offline while someone else is speaking.

Initially, the system was gathering less voice mail, but he attributes that to more callers opting to send e-mails or to instant-message agents.

“The sales team has one phone number now,” he says. Callers enter the agent's extension and if they're not there, it goes to their cell phone, house phone or is forwarded to their sales assistant. “We couldn't do that before,” he says.

Some of the UC features must save money, he just doesn't know how much. Agents can be deployed in different time zones so someone is available no matter when customers call, he says. Making some calls over Internet connections saves phone costs.

The sales team is managed more effectively and with less travel via conferencing, he says.

“The UC stuff?” Dziura says. “It's tough to put a dollar amount on that. How much do you save by getting a person right away when you call?”

Other businesses have an easier time tracking certain benefits because UC is eliminating third-party services for which they have billing records.

That is the case with Advocate Health Care, which has been using Alcatel-Lucent UC products since 2005, including its Omni PCS 4400 IP PBX, MyTeamwork conferencing and collaboration platform, and My Instant Communicator software that blends all forms of messaging so it can be accessed from multiple devices.

Advocate, based in Oak Brook, Ill., has saved money by eliminating Webex and other conferencing and using My Teamwork audio and video conferencing and My Instant Communicator instead, says Gary Horn, the director of enterprise architecture and network security for Advocate.

“There is a good cost savings. I believe the first year (2007) it was only $20,000. We're in the hundreds of thousands of dollars now,” he says. The savings is a measure of cost avoidance and increased productivity.

Having UC software on desktops makes it simple for users to start up conferences, which means they use them more, he says. “We've seen a very steady uptake in the product's utilization,” he says, and the plan is to extend it to all desktops, jumping from 3,500 today to 13,000.

The group has plans to integrate presence information from the corporate calendaring system into the UC system, so a person's presence can be known ahead of time. They are considering embedding click-to-talk in the electronic medical records software to start a patient consultation among doctors, he says. And they are also thinking about putting UC software on smartphones so medical staff on rounds can collaborate.

Horn says he has no way to estimate in dollars how future features might generate cost savings or improved productivity.

For some CFOs, that is a problem, Dewing says. “That increased productivity thing doesn't sell today,” he says because many businesses are looking for proof of a payback on their investments.

In some cases UC is being implemented relatively inexpensively to see what uses end users will put it to with no expectations that it will cut costs, improve productivity or avoid expenditures.

In the case of University of Kentucky, that means making Microsoft Office Communications Server available to departments as a phone option that comes with the potential for more functionality, says Doyle Friskney, associate vice president of IT for the university.

The school, which works hand in hand with community colleges, medical centers and agriculture agents, has implemented OCS on top of other Microsoft infrastructure that it deployed over the last decade or so, including Active Directory, Exchange e-mail and Windows desktop operating systems, he says.

Upgrading to OCS to support 20,000 concurrent users cost less than $100,000 on top of the other expenditures, and Friskney says that is all the cost that should be attributed to the UC upgrade. The other elements should be left out of the equation. “I would have bought them anyway,” he says.

When a department needs voice services OCS is offered as an option. The other options are traditional voice or VoIP services from a local phone provider. When they choose OCS, the primary reason is the cost, he says, which amounts to deploying an OCS client to each desktop and plugging in a USB VoIP phone.

Departments that choose this option also like presence, voice mail, e-mail and instant messaging that come with it. “Voice and video are icing on the cake,” he says. At the moment, between 3,000 and 4,000 OCS clients have been deployed mostly to new users who were not on the network before.

University of Kentucky also has a Cisco Call Manager IP PBX that could support the same services OCS does, but for a much lower cost. He estimates an equivalent Cisco deployment would run about $1 million.

“Microsoft OCS supports a voice infrastructure for the future that probably will never be as robust as the Cisco infrastructure or the [traditional voice service] but will be more than adequate for well over half of our end users,” he says. “It works much better than you think.”

The Cisco voice service runs on a separate virtual LAN, while the OCS voice runs over the regular data network without loss of quality.

“It's going to become the just good enough phone solution,” he says about OCS. “You can't tell the difference between a Cisco Call Manager call and an OCS call. It's that good.”

In the long run as more users adopt OCS, it will become the less expensive option for voice and video. “We didn't approach it from an ROI perspective but it's going to turn into that,” Friskney says.