WARNING: Without an ROI Your UCC Project May Never Get Approved
WARNING: Without an ROI Your UCC Project May Never Get Approved by Stephen Leaden
Introduction
Your organization has been given notice that your Telephony system is at End-of-Life. It could be TDM or even a VoIP platform. The manufacturer is seeking considerable capital for the upgrade and you have a dilemma: how do I get this project funded?
Last month, UCStrategies experts got together and discussed aspects of UCC ROI. It is a great topic and critical to any UCC project. UCC under the broader definition now includes all Telephony and Voice Mail, Contact Center, IM/chat, presence, audio conferencing, video conferencing, soft phones, Unified Messaging, document sharing, and Collaboration. It includes VoIP on the data network, so named as “voice is just another application on the data network.” UC is a game-changing technology that has been in the making close to 10 years, and is now gaining acceptance in the market. It carries a large capital expense that typically requires CXO approval.
For all intents and purposes, if you have an aging telephony system at 10+ years, it’s time to look at an upgrade to UCC or UCC replacement altogether. To be competitive in today’s market, you will need to consider all aspects of UCC and not just a Telephony upgrade/replacement. Note that a Telephony replacement just 24 months cost more that Telephony+UCC today. That’s a BIG value statement, however, the cost of Telephony+UCC is still a significant investment.
UCC offers huge value, and you can take advantage of such value towards a significant ROI, facilitating the cost of a fully loaded UCC project.
End-of-Life Challenges
Our economy continues to right size, and organizations continue to consider value as a key ingredient for every capital project approved. Without such value, we are seeing a UCC project rarely getting approval.
All TDM systems and most VoIP systems at the 10+ year mark are at End-of-Life, and letters from manufacturers for continued support require, in many cases, significant investment of capital just to stay “current.” Keeping an older system current typically does not include any UCC features or functions. As “ugly” as End-of-Life is, manufacturers must put their R&D into going-forward technologies, especially at the pace of change and competition we see in the UCC market at large. Of course there is risk to the enterprise, with a possibility of a multi-day outage based on lack of spare parts available at the time of an outage. Those risks are real and should be of consideration. No organization, in my opinion, can function “as normal” with a multi-day outage – just consider Hurricane Sandy as one example. After even just 1-2 days, a hard telephony down will get the attention of senior executive management and will not be tolerated.
ROI and the Enterprise
We have been involved with several clients over the last 24 months that absolutely, unequivocally required a hard ROI attached to the perspective UCC project, and without such never got approval. Those that made it past the “starting gate” provided management with some level of hard dollar savings, period. A multimillion dollar UCC project requires executive management approval, and a strong financial ROI will result in some level of approval for the organization. We have realized that all projects we have been engaged in for the last 24 months require some level of Return-On-Investment in order to get the overall UCC project approved.
In one client's case, we were advised that the CFO would not approve a UCC project for an aging TDM infrastructure unless there was an ROI to pay for the entire project. ROI, of course, includes hard and soft dollar values; however in our experience soft dollar is a much more difficult sell.
An ROI Client Example
As one example, we have a major healthcare client with 11,000+ endpoints who requires an ROI in order to get approval for the UCC project. The ROI strategy we put in place includes the following - COST:
We researched, analyzed, and identified several key areas that facilitated savings and cost avoidance, helping justify the $1.95 million annual expenditure, making the purchase of these new technologies "almost painless." Those key areas that will contribute to the overall ROI include the following - SAVINGS:
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SIP Trunking
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Audio-conferencing – bringing in as an in-house function
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Reduced Move and Change Activity – leveraging a self-move-and-change in a VoIP/UCC environment
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Contact Center optimization – leveraging UCC tools such as IM/chat, CTI, Workforce Management, and overall Contact Center objectives and efficiencies
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Paging Costs – reduced through leveraging UCC smart phone applications with pager notification
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Real Estate – Leveraging shared physician and administrators offices (where an office is needed only 2-3 days/week), utilizing UCC virtual office feature set, as well as encouraging off-site remote workers were possible leveraging remote worker VPN access (and minimal real estate in those instances)
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Removal of legacy tie lines and off-premise extensions
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Reduced desktops and reutilization of soft phones
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Mobility – utilizing BYOD, smartphones, and/or better cellular plans
Total projected savings: $2.3 million annually, which more than offsets the projected $1.95 million annual lease spend for that particular client. With mergers and acquisitions active in the healthcare market, the ROI leveraging particularly in real estate is very real over the next 24-36 months. Note that the above are examples we are leveraging for this particular client, and final savings and cost avoidance projections are subject to the client’s approval. Other client savings and cost avoidance will vary by client and their own environments.
In addition, we estimate “revenue loss avoidance” by optimizing abandoned call rates in the Contact Centers and the revenue loss associated with a perspective patient who “goes elsewhere.” This revenue loss avoidance is estimated at an additional $2.5 million annually, not included in the above savings/cost avoidance projections.
Summary and Conclusion
Yes, the value of UCC is significant. The endgame: UCC is a compelling, game changing technology. It can also leverage savings and cost avoidance through ROI and many times can quickly pay for itself through hard dollar savings. And UCC eliminates the risk of End-of-Life of legacy Telephony systems.
Net net, we have yet to see a major UCC project approved in the last 36 months without some level of an ROI in the equation. End-of-Life and the threat of non-support is one key reason – that at least begins the discussion with executive management. When coupled with ROI and game-changing UCC applications, an enterprise will have a compelling business case and be much more likely to have executive management approval for a UCC capital project.