Calculating the Real Cost of Video Conferencing

Like a lot of things in life, when it comes to adopting video conferencing in the workplace, there are two types of people: those who intuitively “get it,” and those who need some convincing.  For people in the first camp, the inherent usefulness and value of a video conferencing system is self-apparent; to quote one CEO, “I don’t cost-justify the use of our phones or computers, so why cost-justify the use of video conferencing?”  But to people in the second camp, video conferencing represents a change in the status quo and, like all such changes, needs to be justified before it can be embraced.


Ever since the technology was first made publicly available by CLI and NEC back in 1982, the standard sales line for a video conferencing system was, “Sure, there’s an initial up-front investment, but think of all the money you’ll save by not having to travel all the time!”  While that’s certainly true (and heck, we’ve talked about it at length on this blog before[1][2]), it left plenty of prospective clients—clients who could really benefit from adopting video conferencing—scratching their heads and thinking, “But do we really spend enough on travel enough to justify this cost?”

The truth of the matter is that the old travel line is just one of a few different ways that a video conferencing system’s return on investment (ROI) can be calculated.  Not every company travels enough to justify the cost of a system through savings on airplane tickets, hotel reservations and rental cars alone, but that doesn’t mean your company shouldn’t invest in video conferencing or won’t see a big ROI from it.  Today we’ll look at a couple of the other ways you can calculate video conferencing’s ROI, which may be more applicable to your business.  They are:

Increased productivity.  Anyone who’s ever worked on a big project is familiar with the phrase “hurry up and wait.”  Video conferencing can help improve communication between teams and divisions, reducing the downtime endemic to big projects and increasing productivity as a result.  One pharmaceutical firm used its video conferencing technology to improve the speed with which its specialists communicated and, as a result, was able to bring a product to market four months ahead of schedule, saving millions in the process.  In this instance, the ROI was calculated by evaluating the increased productivity of the company’s employees and the profits generated by its new product.

Increased time efficiency.  Prior to the deployment of a video conferencing system, one engineering firm solved problems at remote sites by flying out engineers to look them over.  These problems on average took about 15 minutes to resolve, but it took two days for the engineer to travel to the site and back.  Now, thanks to video conferencing, engineers are able to solve several remote problems a day without having to leave the office.  Your employees’ time is valuable, especially in the case of experts, and you can calculate this increased efficiency’s impact on your ROI by multiplying your employees’ salary rate by the number of hours saved.

Ultimately, video conferencing’s real ROI is determined by the value its users place on the technology.  If it’s easy to use and intuitive and has a perceived benefit, then your employees will use it—and when they do it often enough, it will become as indispensable as the phone or the computer.  Video conferencing will become, as the CEO we mentioned earlier suggested, so ubiquitously necessary that it exists beyond ROI calculations.

For more information on calculating ROI and making the most of your investment, check out the Calculating the REAL ROI of Video Conferencing whitepaper.


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