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Unified Communications: India Earns Highest ROC
India has the highest ROC, when it comes to unified communication and collaboration tools
Akhilesh Shukla
Wednesday, February 03, 2010
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2009 saw India earning the highest 'return on collaboration' investment, when it came to adopting unified communications and collaboration among companies. However, the country has the lowest average spend on UC&C. India's nearest competitor, China, is embracing UC&C in a big way. As many as 89% used some form of VoIP as their primary phone service.

This startling fact was revealed by a study conduced by Frost & Sullivan jointly with Verizon Business and Cisco. The study was conducted for a second time to determine a model for measuring a ROC, and the impact of IP enabled advanced collaboration on business performance. The first study was conducted in 2006 to find out that collaboration is a key driver of business performance. However, India and China were not a part of the first study.

"The average ROC score was 4.2-meaning that overall, organizations that invested in collaboration performed on average four times better than introducing UC&C technologies. Organizations deploying more sophisticated collaboration tools realize a corresponding improvement in business results relative to the overall amount of money invested in a given functional area," says Benjamin Green, practice manager, unified communication, Asia Pacific, Verizon Business. The greatest impact of collaboration was found to take place in organizational areas where the largest numbers of people interact, including sales, research and development, and marketing.

Adopting UC&C
The study conducted across ten countries found that almost 44% of all organizations surveyed have deployed UC&C tools. Of those organizations that have not yet deployed, 80% plan to deploy UC&C in the next two to three years. Those companies that deployed UC&C reported that they are more successful than their peers compared to companies who have not deployed. The interesting part is that 40% of the current UC&C adopters planned to increase spending even when the economy was in a bad shape.

The study also said that organizations were deploying more advanced IP enabled collaboration tools to see a progressive and a better performance and higher returns on their collaboration. The most advanced collaborations see over 2x return on collaboration than their less collaborated peers. Sales, R&D, and marketing verticals saw the most dramatic returns on collaboration.

The findings show that larger the size of a collaboration network, greater is the return. The network effect held true while looking at enterprises vs SMBs and greater the number of individuals working to reach a goal, greater the ROC. Consequently, the overall ROC for enterprises was significantly higher than it was for SMB. However, all sized organizations can increase their ROC across all functional areas by using more advanced collaboration tools and encouraging a more collaborative culture within an organization and in working with customers, suppliers, and partners.

Collaborative Culture
The study also highlighted the regional differences in work culture of various regions as they have influence on the adoption of UC&C in an organization. "Culture has a very weak influence on UC adoption. Technology adoption decisions tend to be driven more by business imperatives, and perhaps less on the wider culture in which an organization is located. However, I would guess that a society's culture could have an influence on an organization's corporate culture, as it interacts with UC. For those countries that tend to have a more communal culture, which may influence the work environment, collaboration could be enhanced by UC technology," says Green.

Across the World
Employees in the US had the highest percentage among all the regions being surveyed. The US citizens lead busy professional lives and require readily available substitute communication technologies for business travel. They feel that conferences are a good alternative to face-to-face visits and prefer them because of the increasing amount of hassle and safety concerns associated with air travel. They like the ability to telecommunicate and if possible, would do most of their work from home. These people guard their privacy, sending calls via voice mail or instant messaging.

What is ROC?
  • Frost & Sullivan created the ROC index to qualify the return of collaboration deployment, measured across six areas, including research and development, human resource, sales, marketing, investor relations, and public relations. ROC shows the improvement in a particular area, relative to the organization's overall collaboration solution spend. However, ROC does not equal dollars invested and dollar gained. It equals dollars invested and improvement gained.
  • ROC is based on UC&C deployment investment across organizations, average organizational spending in a given performance area-R&D, and change in performance areas directly attributed to using UC&C. For example, an organization invested $1 mn deploying UC&C and spends on average $50 mn on R&D. It estimates an 8% improvement in R&D activities such as improving the speed of bringing new products to market, improving success of new products introduced and reducing the cost of new products deployment process. Thus, the $1 mn invested in UC resulted in a $4 mn improvement in R&D business results.

In Europe, people like to work in the office, as opposed to working from home. They are least likely to multi-task while on conference calls. They prefer in-person meetings and business travel over using conference calls for meetings. These people are least likely to disconnect from communication tools, in order to preserve their privacy. They do not feel that communication technologies keep them too connected, leaving them no time of their own.

About the Study
  • This was the first study to develop a model for measuring return on collaboration and the impact of IP enabled advanced collaboration on business performance. The study targeted both lines of business managers and IT decision makers. Both enterprises and SMBs were covered in the study. More than 3,600 people were surveyed. The seven verticals covered included healthcare/ pharmaceuticals, government, financial services, manufacturing, professional services and hi-tech retail. The ten countries surveyed included the US, the UK, Germany, France, Sweden, Japan, Hong Kong, Australia, China, and India.

People living in the APAC region think that communication technologies give them the control over their lives and allow a better work-life balance. They are most concerned about the security of their information, while using these technologies. People living in the region like to work in projects with teams, and accept that conferences can be a good alternative to face-to-face meetings. They love the ability to telecommunicate, and believe that communication technologies reduce the need to travel for business.

Collaboration Trends
India also emerged as the most telecommunication friendly country. No doubt the telecom industry in India is adding about 8-10 mn subscribers every month, even during the time when the global economic turmoil was at its peak. Hong Kong ranks the second, and the US and China hold the third slot. China has the largest proportion of its firms, currently having both desktop videoconferencing (69%) and immersive videoconferencing (62%). China ranked first with the highest percentage of companies giving these communication tools to their non-management employees. The US ranked second and Australia came third.

APAC came out as the most improved region in the study, driven by China and India. "The recession is likely to have played an important role. A major finding in China and India's successful standing in the study is that there was a lot of investment in communications infrastructure, including UC&C. Perhaps this is due to these strong growth of these economies before the recession that resulted in such investments. But the study showed that the amount of money invested in both the markets was comparatively low. The data also indicated that the spendings tend to be on more advanced UC&C technology solutions. Perhaps because the recession hit these markets less hard than others, China and India were able to realize the catalytic benefits of UC&C," says Minaz Zia, national sales manager, unified communications, Cisco.

More than half of the respondents say that reducing their organization's carbon footprints and other environmental concerns are important considerations in determining UC&C technology requirements. With the economy showing early signs of improvement, 2010-11 could be a good year for the adoption of UC&C tools across the globe.

Akhilesh Shukla
akhileshs@cybermedia.co.in

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