The Business Case for Telepresence

Two of the biggest drivers for the proliferation of video solutions among large companies and SMBs alike are the increasing need for collaboration, both inside and outside the organization, and the desire to reduce costs related to business travel.

There is a clear need among SMBs for tools that enable effective communications with geographically dispersed customers and partners, says Roopam Jain, principal analyst with Frost & Sullivan's North American information and communications technology practice. SMBs are looking for effective ways to manage cash flow, reduce operations costs, maximize employee effectiveness, and eliminate inefficient processes. They need to adapt their business strategy to stay ahead of challenges, and that includes creating efficient communications strategies. In many cases, they are looking to partner with other businesses to leverage economies of scale. They want technology that will help them enhance operations, do a better job of serving their customers, and keep them a step ahead of their competition. Telepresence can help on all those fronts.

The business value of increased collaboration

Generally lacking the corporate infrastructure and considerable human resources of the larger companies against which they often compete, today's small- and medium-size businesses need to operate as efficiently as possible with a decentralized workforce. Teams consist of remote workers, off-site consultants, partners, and vendors, while customers may be spread over a wide geographic area—even globally. Collaboration is a critical component of success in this environment, and it must encompass people and culture, process and governance, and technology. Collaboration creates business value in four key areas, according to the Collaboration Consortium, a working group created to develop and disseminate insights, practices, and benefits of collaboration, resulting in a reference model to achieve business value from collaboration:

• Cost, with savings typically coming from lower transaction costs, reductions in travel, elimination of cycles, and waste reduction.
• Quality (e.g., better decision-making, reductions in product defects, and enhanced customer experience).
• Speed, resulting from reduced cycle times, faster concept commitment, and accelerated go-to-market timelines.
• Business agility, stemming from an accelerated rate of innovation and flexible capacity deployment.

For companies in survival mode, collaboration can play a critical role in cutting costs and sustaining the business. Growth-oriented SMBs can use collaboration to shorten decision-making cycles and get new products or services to market more quickly. 'There is no generic collaboration vision; instead, each organization must align its vision with its own goals,' the Collaboration Consortium states in its inaugural report.

Non-verbal communication matters in collaboration

By definition, successful business collaboration requires effective communication, and that cannot be achieved solely through traditional audio channels or digital communication technologies. Depending on the type and context of the message being conveyed, between 80% and 93% of communication effectiveness is determined by non-verbal cues such as facial expression, hand motion, eye position, etc., and/or by voice quality, which may not be sufficiently conveyed via a standard telephone call. Telepresence addresses the communication problems that exist between individuals in different locations by providing access to crucial non-verbal, visual cues. With many telepresence systems, the quality of the audio is also vastly superior to conventional telephony. Together, those attributes greatly facilitate more-productive collaboration in all types of business transactions and interactions.

Participants in telepresence meetings are more likely to remain alert and focused during the meeting because they know they can be seen as well as heard by the other participants. That is not the case with alternative communication channels, such as telephone, email, instant messaging, texting, or Web-based work-sharing applications. The enhanced communication capabilities provided by telepresence make improved collaboration possible. That, in turn, leads to greater productivity, as consensus is achieved more quickly and easily, decision-making is accelerated, and projects are completed on shortened schedules.

Cutting travel budgets without compromising quality

Businesses continue to face challenges in a slowly recovering economy, prompting them to look for new ways to do more with less. Travel budgets are one area many SMBs see as a prime candidate for savings. While face-to-face encounters remain the preferred method for certain types of business interactions, many routine business trips and internal company meetings can be effectively replaced with telepresence. Many businesses cut their travel budgets during the Great Recession (which began in December 2007; economists disagree about whether it has ended yet), in some cases turning to video collaboration as a replacement. Almost half of companies polled by the National Business Travel Association reported a drop of at least 15% in 2009 travel spending. While spending on business travel in 2010 is projected to stabilize, the trend toward increased use of telepresence continues. A recent study by Koller Marketing Group for the Association of Corporate Travel Executives found that 55% of businesses plan to rely on electronic alternatives to travel more in the future than they have previously. Companies with telepresence solutions in place had greater-than-average reductions in their travel spending in 2009, with the biggest impact seen on internal meetings.

Telepresence as an alternative or supplement to business travel and face-to-face meetings delivers a number of measureable benefits, including time savings, cost savings, improved access to clients and colleagues, and improved work/life balance, according to a report by Wainhouse Research. The time savings of telepresence comes not only from the actual travel hours avoided but also from the time that would otherwise have been spent planning the trip, purchasing tickets, packing and unpacking, etc. The cost of a typical domestic business trip will average about $1,080 in 2010, while international trips will run almost $2,820. Each avoided trip saves not only that direct expenditure but also the value of the employee time saved. Telepresence creates opportunities for ad hoc, fully interactive meetings both within and outside the organization. Finally, reducing business travel can lead to improved work/life balance for employees. Forty-four percent of respondents in one survey reported being stressed by business travel, and a World Bank symposium concluded that business travel often results in elevated stress levels for both the traveler and the traveler's family and may have a negative effective on the judgment and decision-making ability of frequent business travelers.