As with any technology investment, corporations are looking at Unified Communications with a keen eye toward how and when it will impact cash flow. The biggest challenge with that approach is that in its broadest form, investments that unify communications impact the ROI of all other investments while simultaneously accelerating all business processes. This makes calculating a traditional ROI virtually impossible.
Trying to determine the ROI of UC is like trying to determine the ROI of electricity, dial tone, or Internet access. We know these things create value, but we rarely ask if we need them or not. We typically consider them a cost of doing business and use our guts to determine "how much" to invest in them. Someday, investing in UC will be a no-brainer. But not yet.
It took electricity and dial tone years – decades, really – before those technologies reached "no-brainer" status. Even in the 1920s, there were accountants building models to determine electricity’s ROI. One example: the famed research at the Hawthorne Works, a Western Electric manufacturing facility outside Chicago.
One study done at Hawthorne between 1924 and 1932 was to identify the productivity yield for various investments (brightness levels) in electric lighting technology. One finding was that a purported productivity gain related to the brightness of lights was actually due instead to the fact that the test subjects were allowed to socialize while working as part of the study (normally a no-no on assembly lines of the era.)
So even half a century after the invention of the light bulb, companies were laboring to determine the ROI of electricity. Today, except for the "green" initiatives at large Fortune 100 companies, such detailed calculation is rarely done. So, while there are ways to show a hard cost ROI for UC in some companies, the most visionary companies see UC as a no-brainer.
The reason? New workers entering the workforce think and communicate differently. They multitask more than ever and shun the old paradigm of email and voicemail. My outgoing voicemail message, for example, says "you can leave a message here, but for a quicker response send me an email or, for urgent matters, send an SMS to this phone." I do this because (1) I cannot listen to a recorded voice in any less time than it takes the person to record it and (2) I cannot listen to a message while I am in meetings or on other calls.
Future versions of UC will attempt to transcribe voicemails so you can read them, or read them to you over the phone for when you are driving and unable to read. How do you calculate the ROI of that, something that will impact every communication within a company?
A reasonable approach is to look at how a fixed percentage productivity gain impacts revenue and expenses. If you could decrease costs by 0.5 percent and increase revenue by 0.5 percent, how much cash would that create? To determine this, you typically add 100 percent of the cost reduction and perhaps 20 percent of the revenue increase (reduced by whatever the direct costs are to generate that revenue, for a net cash impact). Then subtract the cost of the technology investment and that’s your rough payback for UC.
This greatly oversimplifies the calculation, as it ignores the time value of money and the timing of the productivity gains. But the basic approach is the same. A company with $10 million in revenues (one percent equals $100,000) needing to invest $150,000 to implement UC would have a much harder time justifying it than a company with $100 million in revenues needing to invest the same amount.
Rarely will a company invest in something as broad as UC until it becomes a "no-brainer" for enough decision-making executives. When this will occur for various companies will depend on their industry and the average age of their executives and workforce.
