December 22, 2011

Making a Business Case for UC

Unified communications is all about multimedia communication and collaboration.  Because UC can improve productivity, decrease costs and give an organization a competitive edge, enterprises have been finding it mandatory to at least investigate its use.  But just because migrating to UC appears to be the right move does not mean that its bottom-line value is obvious to everyone in the enterprise.  

Deploying UC will impact IT applications, communications, users and customers.  Before the enterprise approves the project and releases the budget for embarking on a UC implementation, IT has to develop a compelling business case and justify the associated expenditure.

The Value of UC

Unified communications is a collection of capabilities that can benefit and improve many aspects of an enterprise.  A successful UC implementation can lead to benefits in some or all of the following areas:

  • Business - Increased revenue and profit, a more competitive enterprise, shorter time to collaboration, richer communication, improved customer service, reduced travel expenses and improved response to disasters and service outages
  • Mobility - Improved remote collaboration, reduced travel and commuting time and lower mobile usage costs
  • Users - Increased productivity, lower cost-per-unit sales, shorter communication lag, reduced communications tag and streamlined workflows and business processes
  • IT - Lowered costs and reduced user support efforts

Why Write a Business Case?

The cost of a UC implementation can be relatively small (e.g., if a single function such as videoconferencing is implemented) or quite large (if the majority of UC functions are deployed in a single project).  The greater the expense, of course, the more closely executive management will want to examine the proposed budget.  Though most IT managers recognize the need for a business case, they do not always spend enough time writing a thorough, well-thought-out document.  Yet the better the plan, the more likely it is to win approval.

There are three roles for the business case:
  • Forcing IT to consider what has been implemented and how the UC solution will benefit the enterprise
  • Verifying and substantiating how UC will meet business goals
  • Presenting the UC solution in a form that can appeal to different audiences in the enterprise (financial, marketing, technical, etc.)

5 Key Components

Executives typically look for a 12- to 18-month payback on an IT investment - any longer and the perceived risks rise while the benefits appear less solid.  The business case should contain five components if it is to be considered worth analyzing and approving:

  1. Return On Investment (ROI) calculates implementation and operation costs and determines the time at which UC should start to deliver the value that pays for the investment.
  2. Total Cost of Ownership (TCO) includes all costs to own, implement, operate and maintain the UC solution over a specific time period (e.g.,  three to five years; the monthly bill).
  3. Net Present Value (NPV) is a financial figure that measures the investment in terms of future cash flows minus the initial investment.  NPV brings in the time value of the money for a long-term project.  This is where the CFO assists in formulating the business case.
  4. Soft Dollar Savings can be hard to quantify.  Implementing UC may help reduce employee turnover, reduce workplace stress, create stronger customer loyalty, increase market share and improve customer loyalty.
  5. Other Costs include expenses that can occur in related technologies and staff work such as network upgrades, expanding management tools and systems, staff training and improved security measures.

The business case needs to appeal to many individuals and departments across the enterprise.  The broader the business case coverage, and the more thorough the presentation and analysis, the more likely the migration to UC will be approved.

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