The Business Case for Videoconferencing

by Hyoun Park
Aberdeen Group

Hyoun Park, research editor at Aberdeen Group, shares research and advice on ways non-profit organizations can use videoconferencing to save time and money, especially in these challenging times.

An Old New Technology

How can your nonprofit save money, accelerate projects, develop more effective fundraising and bring in additional volunteer resources?

Surprise: The answer just might be videoconferencing.

Videoconferencing is not a particularly new technology. Since the mid-1970s, there have been a number of videoconferencing technologies that have been released to the market. But all of these solutions were accompanied by significant barriers that made it difficult for non-profit organizations to adopt.

Initially, the cost of this technology was considered prohibitive to all but the largest organizations, with price points as high as several hundred dollars per hour of use.
Hardware costs also ranged into the hundreds of thousands of dollars in the 1970s and 1980s to launch even the most rudimentary of systems.
The bandwidth to pass video did not truly exist until the adoption of ISDN, or integrated services digital network, in the mid 1980s. (ISDN is an international communications standard for sending voice, video and data over digital telephone lines or normal telephone wires.)

A Boondoggle Makes Good

As a result, many large corporations ended up installing these solutions 20 years ago, only to find that this equipment ended up sitting unused, fully depreciated, and trivialized as a toy that failed the crucial enterprise test of providing ROI and utility at the end of the day. Words such as “pet project,” “toy” and “piece of junk” were often associated with these expensive, yet non-productive videoconferencing setups.

To understand the current state of videoconferencing, Aberdeen surveyed over 180 organizations in October of 2008. Based on this data, we were able to identify best-in-class organizations representing the top 20 percent of respondents in using video. These respondents achieved the following goals:

63% faster in setting up videoconferencing than average
56% more utilization of fixed videoconferencing resources than average
24% decrease in corporate travel last year

In other words, they were able to set up equipment faster. They used video more than their peers. And they were able to significantly reduce corporate travel by replacing it with videoconferencing.

Best-in-Class on a Budget

It takes a variety of capabilities and technologies to become a best-in-class organization. Although it always helps to have top-of-the-line technology, there are a number of organizational steps that organizations can do to promote best-in-class usage.

Make a Firm Commitment

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For starters, without a firm commitment to use videoconferencing in the workplace, any investment that brings videoconferencing equipment and software to end users is wasted. Before your organization purchases a videoconferencing solution, you must be committed to understanding how to use the technology to accelerate key operations and program processes, decision-making capabilities and fundraising activities.

Also, your nonprofit needs to bring this information to the employees who can leverage this technology. This does not simply mean that your organization should provide this technology to executive directors and high-level employees, but rather that video should be made available to all employees.

Determine How Best to Leverage the Technology

What are the practical uses of videoconferencing in your workplace? The top use of video was to negate or minimize travel. Since executives travel more than the rest of the workplace, they have traditionally used video more than all other employees. However, there is a lot of value that your organization can achieve outside of reducing executive travel.

Although 82 percent of respondents were using videoconferencing for executive meetings and 66 percent of all respondents had project management meetings over video, best-in-class organizations were able to find other uses for this technology, such as:

Remote training sessions to teach vital concepts and maximize the value of subject-matter resources which were not scalable or easily available
Communicating outside the enterprise and conducting business via customer service, sales and other functions

For instance, why shouldn’t an organization be able to improve its ability to remotely interview potential employees by leveraging its videoconferencing solution? Organizations comfortable with using video in the workplace are willing to do just that at a much higher rate than their counterparts.

By doing so, they gain a competitive advantage by effectively increasing the range of their talent search without being constrained to the limitations of phone-based communications or web-based conferencing, both of which fall short compared to the range of realistic and interactive communications that video can provide.

Make a Sound Investment

Although it is tempting to go with a free product such as iChat or Skype in choosing a video solution, there are a few problems with working with these free products. First, they are not “standards-driven,” meaning that they won’t work with other video solutions (with iChat, you can only use video with someone else who has iChat).

In addition, there is no quality of service associated with these products. Lastly, the video clarity is much lower with these types of solutions. In short: you get what you pay for.

So, how much will this cost? Premium telepresence suites, which provide a life-like audio and video experience to the end user, are sold by organizations such as Polycom and Tandberg for list prices of $200,000 to $300,000. Whoa, don’t throw up your hands just yet! There are many cheaper options.

Microsoft sells a product called Roundtable which lists for around $3,000 and provides a high-quality videoconferencing solution. For a PC-based solution, software such as Mirial can provide high definition video for only a couple hundred dollars per license.

Although you may not need a $200,000 solution, a certain level of technology is needed to obtain best-in-class solutions. Our research showed that 65 percent of videoconferencing users with HD-quality video achieved best-in-class results compared to only 9 percent of users who did not. There is a limit to the utility of video when it is choppy and inconsistent with realistic, real-time communication.

A Shrewd Technical Decision

In short, there are significant benefits that can be realized through video whether you can afford the state-of-the-art solutions or would rather leverage your PC. By understanding where your organization uses travel, gaining organizational acceptance of video and making an investment appropriate to your budget, videoconferencing can end up becoming a shrewd technical acquisition for your workplace.

This article was written by Hyoun Park, Research Editor at Aberdeen Group. See the full report that this article was based on.

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