Innovate, don't hibernate

The last thing that you should do in the midst of turbulent economic times is to invest in new technology, right? "Not necessarily", says Don Van Doren (Principal of UniComm). In this thought provoking article he makes a strong case for the implementation of Unified Communications (UC) as a means of blunting the edge of the current economic climate. He shows how UC can help cut costs, improve productivity and position your business for future growth.

Unified communications in a turbulent economy

• How UC can help cut costs


• Additional productivity benefits


• Leveraging UC to grow despite economic downturn

The deteriorating economic climate brings intense pressure to cut costs, reduce headcount and restrict capital expenditure. Unified communications (UC) capabilities can help enterprises in each of these areas.

Current conditions

The effects of the financial market collapse are being felt by enterprises around the globe. Line-of-business managers are looking at their products and assessing the effects on sales in both the near-term and during the recovery. IT managers will face pressures to delay purchases of new systems, especially non-essential ones that do not show a payback within a relatively short time. Managers are also considering sourcing options for infrastructure that must be acquired, for example using hosting solutions to defer capital expense. When talking to enterprise executives about the impact of the economy, we find that many organizations display characteristics that fall into one of three categories: survival, maintenance and opportunity.



A few companies have been dramatically impacted by the economic downturn and are now in survival mode. These companies are cutting spending to the bone and taking any steps available to reduce current costs. The majority of companies are in maintenance mode. Spending is usually cut back to conserve cash. However, projects continue to be funded where they are deemed to be high priority.

For a relatively small number of companies, these challenging times will open up important windows of opportunity. Those companies with stable financial structures, low debt and confident leadership will streamline internal processes, seek acquisitions of weaker but well-positioned companies, and generally make investments that improve their positioning for when the economy re-emerges.

However, for all companies we see some general patterns. Preserving cash will be critical in these times of constrained credit resources. Current expenditures in all areas will be examined carefully for reduction opportunities. In addition, most managers will experience pressure to reduce headcount, either as a cash saving mechanism or as a way to upgrade staff quality. Business process efficiency will become even more critical as a result of headcount and cost pressures. Finally, capital commitments will come under increased scrutiny. In all cases ROI and payback requirements will become more stringent and non-essential projects, or those without a clear strategic value, will be postponed.

Interestingly, UC offers significant opportunities for companies to address many of the challenges they face in response to these economic conditions. In some cases, UC directly reduces the cost; in others UC helps get the work done when other actions, such as headcount reduction, mean that productivity has to rise.

Expense reduction and budget cuts

In times of economic crisis, this category often gets the most attention. The reason is simple – improvements tend to directly improve bottom-line performance. This effect becomes even more important as revenues decline. UC provides a number of ways to help cut costs immediately:

• Reduced conferencing service fees. Many companies use outside conferencing services to support audio, video and web-based conference calls. In the past, in-house systems were often cumbersome and offered only limited capabilities. The combination of screen-based interfaces for ease of use and functionality that spans all conferencing modes brings the opportunity of rich conferencing directly to any enabled desktop in the enterprise. As an ancillary benefit, most companies find the flexibility and simplicity of UC-based solutions means that ad hoc conferences occur naturally and with increasing frequency.


• Reduced travel costs. Companies have become increasingly global. In addition to multinational corporations, even smaller companies frequently have manufacturing partnerships or customers in overseas locations. Travel charges are a highly visible category of expenses. UC supports conferencing, application and document sharing, and integrated access to individuals. In many cases, these capabilities can enable effective meetings without participants having to climb onto airplanes.


• Many companies find that even without budget cuts, the inconvenience of travel meant that colleagues did not get together as frequently as project opportunities demanded. With the advent of UC-supported collaboration capabilities, more frequent, effective meetings could take place


• Replace off-site meetings with UCfacilitated collaboration. As budgets are slashed, off-site meetings are frequently canceled to save hotel, catering and travel charges. Unified communications can enable groups to collaborate effectively, even if they cannot get together physically. Moreover, these virtual meetings can often be recorded to provide documentation of activities and decisions, opportunity to review key issues and ability for absent team members to review the proceedings at a later time.


• Reduced cell phone and long-distance bills. UC helps reduce carrier-based costs in several ways. IM and presence capabilities allow users to quickly check the availability before placing a call that would otherwise have gone to voicemail. Frequently, a quick IM interaction is all that is necessary, eliminating the call completely. In other cases, with an increasing number of suppliers’ solutions, secure peer-to-peer communications can completely bypass the phone networks.


• Reduce IT administration and support staff and facilities. As discussed below, steps can be taken to consolidate infrastructure through the use of more powerful servers and centralized, virtual functionality. Usually, support staff requirements are centralized along with the equipment. This enables both manpower efficiencies and smaller and fewer facilities, thus reducing power, heating, cooling and lighting requirements. Moreover, reductions in the number of servers coupled with new vendor licensing schemes that bundle capabilities together often means significant potential for maintenance and operating cost reductions

Headcount cuts and hiring freezes

Many enterprises are undergoing reductions-in-force within the business units as a way to reduce costs. In these situations, UC’s contribution is to improve productivity, efficiency and effectiveness so that a smaller team can get the work done. The effects of UC fall into two broad categories: facilitating individuals’ communications and streamlining work groups’ efficiencies.

Presence functionality is a cornerstone to help individuals improve their productivity. Presence information instantly lets someone know who is available for communication and through which channel. Moreover, this capability extends to all of the user’s communications devices – desk phone, cell phone, laptop, PDA, etc. Conferencing is another key application to help facilitate individual productivity. UC capabilities such as click-to-communicate from an email or document speed up simple communications activities. In addition, many UC system up integrate well with mobile endpoints, managing both voice communications as well as mobile access to time-critical data.

Further opportunities for improved productivity happen when work groups or departments decide to use UC capabilities to transform the way business processes work. In most organizations today there are numerous examples of workflows in which progress on a particular issue is halted, finding someone to provide information, or waiting for an authorization or approval. Too often, these kinds of requests sit in some inbox, waiting for someone to access email or voicemail, get the information and respond.

There are many examples of enterprises where departments have embedded UC functionality directly into the workflow applications or business software to materially speed up such communications. The ability to reduce ‘human latency’ means that even with headcount reductions, the necessary work can be completed.

Conferencing and collaboration tools are another important way in which teams can work together more effectively and more rapidly. For instance, experts from outside the team can be identified and brought into a working session to provide insights. Many examples, from R&D to marketing to sales, show how UC capabilities speed workflow and enhance the accuracy of results.

All of these capabilities translate into getting work done faster, or with fewer people, thus supporting headcount reduction initiatives. There are other benefits, but some, such as providing excellent customer service, are harder to quantify. Many companies have harnessed UC to link experts to customers to achieve first-call resolution. Some are even offering presence-enabled web portals for key customers, to provide immediate access to both pertinent account information and to the assigned sales and service teams. These steps promote customer satisfaction and loyalty. Similar capabilities tighten relationships with key distribution partners.

Capital spending cutbacks

A third area often under scrutiny is capital spending plans. In many cases, routine projects will be deferred until credit conditions ease. Only urgent projects or those supporting critical strategic initiatives will be considered. However, many enterprises find that their communications infrastructure, often purchased in advance of Y2K, is approaching end-of-life or end-of-service

As discussed elsewhere in this magazine, the voice communications industry is undergoing a massive transformation accompanying the growth of UC. Ecosystems of suppliers and developers are embedding specialized communications capabilities directly within business applications. Enterprises making investment decisions today must avoid simply upgrading existing infrastructures. New investments must be pointed toward platforms that will support UC capabilities now and into the future.

In situations where infrastructure upgrades are deemed essential, UC systems may offer significant opportunity to reduce ongoing operation costs under expense reductions. But there are also opportunities for creative UC architectures to eliminate the need for some traditional voice communication systems. Smaller offices and remote workers may only require the capabilities supported by a centralized UC server, a UC gateway to an aging PBX, a job portal, or the use of mobile endpoints linked to a UC-based solution. In many cases, this approach will provide excellent solutions for communications requirements without significant capital expense.

Next steps

The opportunities described here only scratch the surface of the many ways unified communications solutions can help companies plan, respond to, and act in the face of dismal economic news. Whether your corporate situation is survival, maintenance or seizing opportunities, unified communications solutions can play an important part in achieving your goals.

It is essential that managers take this opportunity to understand their corporate mandates, assess their situation, identify alternatives that meet stated goals, and prepare an action plan. For those enterprises focused on survival, UC offers immediate cost-saving possibilities. For enterprises looking to grow their businesses, UC provides innovative capabilities to dramatically improve business processes, speed transactions and improve responsiveness to customers.

The turbulent economic conditions might induce a desire to crawl into a cave, hunker down and hope it blows over soon. Clearly that is not an option. The watchword must be ‘innovate’ not ‘hibernate’. UC can be an important tool in helping enterprises design their future despite the news.

Don Van Doren is Principal of UniComm Consulting, an independent UC consulting firm, and a co-founder of www.UCStrategies.com. Don is also President of Vanguard Communications, an independent contact center consultancy.