Published on April 4, 2017 @ 10:38 am

News Calculating the Real Value of Enterprise Video Collaboration

By Julian Phillips, EVP, Whitlock

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Ever since Microsoft bought Skype for $8.5B in 2011, we have been awaiting the prospect of universal video collaboration across the enterprise when any user can connect, communicate and collaborate with colleagues from anywhere in the world simply and efficiently. If you ever doubted the commitment of the big IT players to video collaboration, then watch the fervent activity around Microsoft Surface Hub, Cisco’s Sparkboard and now Google’s eagerly anticipated Jamboard. But have we got our math right? Do we truly understand why customers need this technology and how it will help them gain competitive advantage? Perhaps now is the time to challenge some of our convictions and assumptions.

Lessons learned

Although 1994 seems like yesterday, its actually over 8,000 yesterdays and the same year I had my first experience of video magic. I was wildly ambitious and hopelessly naïve and in the early stages of my career at Dell in the UK. Across the road was a little company called PictureTel who invited me to have a face to face conversation with their colleagues in the USA via a PC. I was amazed, bamboozled but smitten; At “Networks 94” the eponymous industry exhibition, Dell PC Video Conferencing was the centerpiece of the show’s largest booth and within six months we had sold exactly, none.

So, what did I learn from this expensive and potentially career limiting mistake? Well for one, just because something is amazing and the business case sounds all too believable (yes, we used the one about travel cost savings), it does not mean customers will buy it, adopt it and use it. I do, in hindsight console myself with the fact that despite massive investment, innovation and ingenuity there have been many false dawns of video conferencing and telepresence over the last twenty years.

In search of the mythical ROI

Photo of Julian Phillips
Julian Phillips, EVP at Whitlock

I am not sure exactly when it happened, but when incented to do so, we stopped selling businesses things they actually needed and switched to proposing a “return on their investment”. With silky smooth marketing and spurious calculators, we converted what was once a financier’s mundane formula for the value of economic profit into beautiful wizardry to loosen the purse strings of C-suites across the land. Of course the basic premise is simple “if you spend $1M, you will get $3M in return over 3 years, which means you will achieve return on investment in 12 months, sign here”.

Now here’s the problem; we can work out the cost, that’s hard cash up front, but how do we measure the gains over the three years? Is it possible to present all the undoubted benefits as dollars? Perhaps capital is the wrong currency after all? Perhaps ROI is just like the Holy Grail, often sought, but never found other than in storybooks and film.

The new currency of business

I am not saying that profits do not drive corporate behaviors, but I will argue that the clear majority of businesses are not being driven by the short-term profiteering we often witnessed in the nineties. And the reason? The digital transformation agenda is challenging every industry to pivot, innovate, re-imagine and re-engineer everything they do. The world’s largest automakers see UBER as their competition, universities are now global without bricks and mortar and banks are shutting their branches and slugging it out with PayPal.

Therefore, the prospect of investing in technology just to make more money from an already redundant business model, is not as important as investing in new ideas and creating an agile and creative culture to stay ahead of the competition yet unknown. Capital is not the answer, there’s plenty of that out there unused, what all businesses are competing for harder than ever before, is talent. The talent that has powered Apple, Google, Amazon and Microsoft is now in demand from Toyota, Harvard and Bank of America. So, if talent is the new currency, how do we measure productivity?

The value of time

The woefully underrated 2011 movie “In Time” starring Justin Timberlake and Amanda Seyfried imagines a dystopian world where aging stops at 25, but everyone is engineered to live for only one year and the only currency is time which can be earned to grow older and spent to die younger. Guess what? The wealthy are those that live for a thousand years and the poor are snuffed out in weeks. So even when we take the one commodity that everyone in the world has the same amount of every day, we find ways of placing more value on some time more than other time.

So perhaps it is time we should focus on, rather than money? Perhaps we should express the value of video collaboration as minutes saved and time given back? Well, we have certainly tried that before, remember the “every meeting starts 12 minutes late because the technology does not work first time, imagine the minutes you could save every year if… sign here”.

The problem with this, is the assumption that time is directly proportional to efficiency as it was in the post-industrial age where building a sedan 24 hours faster than the competition meant 1.2% more profit. The reality today is that we spend time on non-productive things every day, so giving back a few minutes more will not make us any more productive. Think about how many minutes the average corporate employee spends on email, playing with their smartphone, attending meetings they don’t participate in and performing tasks that perpetuate the corporate problem. So maybe it is not time that matters, it is how we spend our time that truly makes the difference.

The real value of experience

The real value of time is the experience we enjoy as we spend it. As individuals, we make those decisions every day, choosing to spend more time on tasks that are productive and enjoyable and less on those which are mundane. For example, an original premise of UBER was that it would save time being able to book a ride from your smartphone and not wait to hail a cab; so why is it now that I will prefer to wait 10 minutes at an airport for an UBER rather than jump in a cab that is waiting in line? And why is it that all around the World, there are lines going out of the door for a Starbucks, when there is a perfectly good coffee shop next door ready to serve an equally good cappuccino? The answer is “experience”; we have become an experience driven economy. And don’t take my word for it, listen to Joseph Pine describe the progression of economic value in his seminal work “The Experience Economy”.

The new business imperative

So, if it is true that talent has replaced money as the new currency and time is subordinate to experience, how do we create value for our customers for video collaboration technology and services? Here is the premise; customers will invest if we can clearly demonstrate that our solutions will help to create a working environment which helps them attract and retain the best available talent and enables that talent to be the most creative, productive and happy they can be. In other words, they have the best possible experience. Intuit is a great example of a Silicon Valley powerhouse, probably not as fashionable as some of its West Coast cousins, but they get it: “Hire the best talent, and enable them to do the best work of their lives”. It’s no longer good enough to have the best technology to drive efficiency, you must create an environment and a workplace culture which enables people to shine and innovation to thrive.

Proving the formula

JP-ROI-Formula2017I am not a mathematician, but I confess to receiving a little help from my son studying Computer Science at Widener. We can create value for our customers (v) if we demonstrate that time (t) using our technology leads to a productive and enjoyable experience (e) for their people. And of course like everything else in life, we must consider the cost (c) as a moderator. Note that in the formula, (t) for time is to the power of (e) for the experience as a force multiplier.

In summary, the greater the experience, the more valuable the time! I’m not sure how different businesses might add values into this formula as it likely has a great variance, but I do think it gets us closer to measuring a valuable experience and a worthwhile return. Let’s work together to figure it out! Maybe there is a formula that works for small, medium and large businesses. What would you suggest?

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