Philosophically Rethinking Video Conferencing and Its Return on Investment

Lifesize Video Evangelist Simon Dudley recently sat down with communications-industry veteran Dr. S. Ann Earon of Telemangement Resources International for a casual yet informative discussion about the “real return on investment (ROI) of video conferencing,” something that we wrote about recently on this blog.  The two-part video is definitely worth a watch, as it’s a chance to watch two experts engage in a wide-ranging discussion that touches on many of the salient topics affecting the video conferencing industry today, but it’s the central argument about the value of ROI in video conferencing that got us thinking about today’s post.  In our previous blog post, we outlined three ways to tabulate ROI (travel displacement, productivity and time efficiency).  Today, we’ll focus instead on some of the more philosophical things that Simon and Dr. Earon brought up in their chat and what they tell us about the state of video conferencing today.

video_roi_1 video_roi_2

Early in the conversation, Dr. Earon mentioned something that served as almost a thesis statement for the discussion to come: for some industries, a simple ROI formula just doesn’t make sense.  As she pointed out, companies don’t factor in ROI when they purchase computers and cell phones; in fact, once a communication tool reaches a certain level of ubiquity, its true value exists beyond what a simple cost-benefit analysis can describe.  Simon furthered this point when he said that, more and more, there’s an opportunity cost to not engaging with video conferencing—namely, the cost of not being in front of your clients.

But let’s go back to Dr. Earon’s point for another moment.  For a long time, we talked about justifying the cost of a video conferencing system in the simple terms of an elevator pitch: you spent $X on travel, a new video conferencing suite would cost $Y, and you could calculate the return on investment with a simple math equation.  But increasingly, companies are using video conferencing in all kinds of day-to-day applications, making it harder to assign a dollar-and-cents return on their video conferencing investment.  Dr. Earon illustrated this point by describing a chemical company she’d consulted with.

The CEO of this company was interested in video conferencing not because it allowed him to hold face-to-face meetings with clients or investors but because it allowed him to look at drawings of the chemical compounds that the company’s remote labs were working on.  But after he invested in a video conferencing suite for the company, his HR department started using it to interview potential job applicants.  For the CEO, the ROI of his video conferencing system is that it allows him to bring products to market faster.  For the HR department, the ROI is shaving weeks of man-hours off of the hiring process, and potentially lowering turnover as a result.  This illustrates an important point: as video conferencing usage becomes more ubiquitous within an organization, a simple ROI calculation does less and less to illustrate the system’s actual value.

These are just a few of the very interesting (and very important) thoughts that these two industry titans hashed out over the course of their casual hour-long discussion.  The videos are definitely worth your time, especially if you’re advocating for the adoption or expansion of video conferencing at your company, so we highly recommend giving them a watch.

Part 1 – What’s the REAL ROI of Video Conferencing
Part 2 – Video Conferencing ROI | 3 Ways to Calculate



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