Unified communications is a combination of different types of communication technology, provided as a single, hosted solution. Web conferencing, voice calls, video and instant messaging are delivered as one toolset, delivered alongside presence.
Read: What is Unified Communications?
When we talk about cost savings of communications technology, we tend to think about capital expenditure. This is certainly a very valid way to quantify the potential savings. If you’re using a PBX, you’ll notice that unified communications saves on procurement, maintenance, repairs and infrastructure provision.
But what if we broadened the scope of what a ‘cost saving’ actually is?
In this guide, we look at all of the additional ‘soft savings’ that are found across an organisation when unified communications is rolled out.
It’s these extra savings that make unified communications so attractive, and give them such huge potential to increase profitability and drive growth.
Cost savings through reduced capital expenditure
Before we move on to the soft savings of unified communications, let’s start with the capital expenditure savings that are compelling for businesses of all sizes.
When you first implement a new telecommunications solution in your business, there are various costs to cover. You’ll need to purchase your infrastructure and communications hardware. That includes the phones that sit on everyone’s desks.
But this is just the beginning.
Measuring the Cost
Next, there’s the cost of keeping the system running reliably, which may include purchasing new hardware or upgrading the system to cope with demand. Every time you add new lines to a PBX, you are adding capacity that may or may not be utilised – but the business must purchase more than it initially needs.
There’s then the cost of maintenance fees, which may include a contract for servicing and repairs. Each problem with the PBX system will involve escalation to an engineer.
Measuring the Savings
Clearly, we can see that unified communications provides a more manageable cost structure, as well as a lower acquisition cost at the beginning. While hardware phones may be required, many businesses get started by using smartphone apps that can replicate the functions of a desktop telephone.
And because all of your calls are provisioned via the internet, there are no lines to install. The only thing the business needs to do is provide an internet connection with sufficient bandwidth.
When we look at the CAPEX and OPEX of unified communications vs. the PBX, we instantly see a more controlled cost based on a seat or user licensing model. The hardware, infrastructure and call-out costs almost totally disappear.
Cost savings through productivity
In IT, productivity is the buzzword of the moment, and the cloud is the primary driver of change. You’ve probably already seen dozens of studies that confirm cloud technology elevates output – but how can you put this into figures?
Productivity has a very real effect on your bottom line, and unified communications has a direct influence. One contributor is the ability to adapt the working day to better suit employees’ lifestyles.
Measuring the Cost
An unproductive workforce can reduce your business’ profitability by stealth.
Employees become unproductive for various reasons. Not all of them are malicious, or within their control. Ill-health, injury and stress can have a considerable impact.
Others fail to contribute due to presenteeism: they attend, but the effort is lacking. Presenteeism is common when the employee becomes disillusioned with their jobs; irritated, distracted, overworked or pestered by unproductive colleagues. In some cases, employees may decrease the amount of effort the put in if they feel the business is not supporting the way they want to work.
Samsung and the University of Leeds produced The Ahead of the Curve Report, which found that unproductive workers cost UK businesses £250 million per year.
Measuring the Savings
One study, conducted by Harvard University, proves how these adjustments can elevate output. It studied the Chinese travel agency, C-Trip, as it rolled out a flexible working program. Half of its workforce were allowed to work from home, telecommuting from remote locations. At the same time, half of its employees remained in office-based roles.
The Harvard researchers found that employees who worked at home completed 13.5 per cent more calls than the office-based staff. This is essentially a gain of one extra working day, per week.
Ctrip estimated that it saved $1,900 (approx. £1320) per employee over a nine month period.
Cost savings through increased mobility
With a PBX system, you’ll have hardwired phones on the desks of your employees. That’s great, and in workplaces 20 years ago, it worked well. But in 2016, few of us expect to contain all of our work to one location.
Employees expect to move around the office and work in an agile way. New methodologies such as Lean, Kanban Scrum are changing project management forever, removing waste and encouraging employees to speak to each other more often.
It’s clear that we need people to move around. They need to be able to exchange ideas. Unified communications technology is an essential cog in the machine.
Measuring the Cost
Businesses are faced with a dichotomy. They want people to be mobile, yet they need them to communicate easily. If mobile employees are stuck with a rigid PBX system, there are going to be costs and risks.
If a member of staff is working with a client on a remote site, or posted in a distant company office, they will be instantly cut off from the face-to-face communication they depend on. Additionally, it is costly and time-consuming to reroute telephone calls to new locations when a PBX is in place.
Some businesses do already have on-premise video conferencing solutions, but these require near constant upkeep and maintenance. Interoperability can be a challenge, security is a concern, and the infrastructure can be expensive to maintain.
When you add in the challenges of sharing equipment among users, and the complexities of different platforms in different locations, you start to see the massive potential for waste when employees are mobile.
Measuring the Savings
BT rolled out a flexible working experiment that proved increased mobility cut costs, when supported by a unified communications strategy.
In its white paper – Cost Transformation Through Mobility – BT cited:
- A reduction in travel costs
- A reduction in absenteeism
- A reduction in property costs
- A reduction in fuel consumption
- An increase in staff retention after maternity leave (thus lowering the costs associated with staff churn, knowledge transfer and recruitment)
Unified communications lets your employees take their phone line with them. Because the system is hosted, there are no problems with interoperability, security or obsolescence. And the business instantly frees up your employees to be mobile, so they can work wherever they feel would be most beneficial. They can use the same phone lines, and the same phone number, that they use when they’re at their normal workstation.
Increasingly, we’re seeing workers demanding more flexible hours, and a different work-life balance that may involve agile or remote working practices. Your communications system needs to support these workers in doing their job regardless of location.
We also need to consider the rise of Bring Your Own Device (BYOD), an approach that has its own cost saving benefits for business. If employees are using personal devices to communicate, the business needs to support them by providing the right support, as well as good quality connectivity via mobile and WiFi. It also needs to work in cooperation with the employee to secure the device, which may mean asking for them to sign a policy governing the way their device is secured.
Cost savings through increased collaboration
In the last section, we talked about remote working, and the benefits of mobility. Looking more closely, how does unified communications support collaborative working?
When employees are based in different geographical areas, the business must ensure they can still collaborate as efficiently as they did face-to-face. Unified communications brings together all of the tools people need to keep in touch: including voice communication, video calling, instant messaging, whiteboard sessions, web conferencing and more.
Another key part of collaborative working is presence awareness. Using simple control panels and tools, people can set their online status, or be marked as automatically ‘away’.
This combination of different technologies means that employees that are physically separate can work together as though they were in the same room.
Measuring the Cost
Inefficiency of communication can quickly eat up scarce resource in a hectic working environment. This is already painfully obvious to anyone who owns the notorious I Survived a Meeting blue ribbon. It may be a joke, but the cost is real: wasted time is costing you money.
If your company is not collaborating effectively, communication will break down. This can affect morale, efficiency, downtime – even health and safety. US figures from Gallup suggest that disengaged employees cost businesses $450 to $550 billion (approx. £313 to £382 billion) per year.
Measuring the Savings
- According to Towers Watson, companies that communicate effectively deliver 47 per cent higher returns to shareholders
- Online collaboration can help to reduce the amount of time wasted on pinging emails and documents back and forth, and can also reduce the time needed to create documents by 33 per cent
- Clinked also found that 90 per cent of business leaders say cloud-based collaboration has the potential to “improve virtually any set of processes”.
There are also some very good practical reasons to rely on unified communications solutions. As companies look to reduce their carbon footprint, reducing travel is a must, and another good way to cut wasted time and boost the output of a team. Of course, every time there’s a benefit to the environment, there’s a benefit to the bottom line that corresponds: compared to meetings, there’s a clear financial case for promoting online collaboration. Your team will spend fewer hours spent on the road travelling to meetings, and endure fewer postponed sessions due to missing or late attendees.
Cost savings through obsolescence
As consumers, we expect that our devices will slowly be superseded by new technology. In business, things are no different. How do you cope with the constant need to innovate, upgrade and change?
Most businesses know that they need to plan ahead and budget for change, and in a climate of rapid cloud innovation, change is a constant force. Few businesses would expect to purchase a communications system and expect that system to be at the cutting edge 5 or 10 years later.
There will always be a need to upgrade, replace and evolve the system over time, even if the technology currently in use isn’t technically ‘broken’.
Measuring the Cost
There are three main reasons why business technology will eventually become obsolete:
- Functional: the technology has been superseded by a new version that includes features that will improve efficiency, or benefit the business in some way
- Quality: A new version of a solution is needed because the old one is no longer fit for purpose
- Desirability: The business has discovered a new solution that offers an innovative and exciting alternative approach.
Each type of obsolescence has a cost attached, and the business needs to predict this natural life cycle: the expiration of one solution, and the resource required to implement something new.
Additionally, there is a very real risk of poor decisions when upgrading a solution, and the potential cost of postponement when something is clearly obsolete. If your old phone system is not fit for purpose, but the business fails to act, it will fall behind and lose its competitive edge, for all of the reasons we’ve already outlined in this white paper.
Measuring the Savings
Unified communications as a Service (UCaaS) protects the business against costly replacements through obsolescence. The system is hosted by a third party provider, and provisioned through the cloud. So it’s the provider that takes care of updating the system as new features are rolled out. Equally, the provider is responsible for introducing new features and keeping ahead in a competitive market.
The net benefit is a system that is self-updating, without the spikes in expenditure, and the elimination of the risk of postponing vital upgrades.
Cost savings through increased uptime
Over the last few years, many UK businesses have been hit by chaos caused by natural disasters. The most prominent example of this is flooding, which can destroy a store or office within minutes. Is your business prepared?
In December 2015, floodwaters ripped through approximately 2,720 homes in the Calderdale area, and affected around 1,250 businesses, many of which are still struggling to recover. The local council suspended business rates and distributed grants to help these businesses cope.
Every business needs a disaster recovery plan, and a way to minimise the impact of disaster. Unified communications plays an important role in containing the impact of natural threats and other unexpected outages.
Measuring the Cost
Even if the business has insurance, this does not protect against the disruption of a disaster, particularly when it comes to business as usual IT services and infrastructure. In many cases, the resource needed to bounce back is simply too great for a business without a plan.
The amount of time that passes can also cause some businesses to cut their losses and shut down.
The figures around disaster recovery make for depressing reading:
- The London Chamber of Commerce says 83 per cent of London businesses do not have a written contingency plan
- 43 per cent of businesses with a disaster recovery plan do not test their strategy
- 90 per cent of businesses that lose data during a disaster are forced to close within two years.
Does your business have a strategy to cope in the face of downtime or disaster? If the phones cut out, and the computers are damaged, how will you continue to trade?
Measuring the Savings
Unified communications should be the cornerstone of your business continuity strategy. The technology allows you to quickly redirect calls, or use services like voicemail, by changing settings in a web portal. Even if your telephone hardware is destroyed or unusable, your solution is hosted elsewhere, so it will continue to function as normal.
Additionally, your solution provider should have its own comprehensive disaster recovery plan that covers the data centre they use to host your unified communications service. Look for a provider that offers:
- 2 hosting locations that are geographically separate (geo-redundant data centres), to protect against a disaster in one location. This will allow the system to function as normal if one of those facilities is affected
- 24/7 support that ensures instant response in an emergency
- Detailed SLAs that cover your business against data loss, if the worst happens.
When businesses tell us why they’ve adopted cloud technology, they almost always mention the resilience and disaster recovery benefits. In fact, at Cloud Expo Europe 2014, 60 per cent of respondents said this was a factor in their decision.
Conclusion
Few businesses approach cloud migration without a degree of trepidation. After all, PBX systems can be ingrained in the company psyche, and some stakeholders may be change averse. But when you look at the capital expenditure savings, the potential for healthier balance sheets is clear. When you then look beyond this, you see the positive impacts across the business: things that collectively reduce cost and waste.
There are many leading UK providers of unified communications in the cloud. Their job is to make unified communications accessible, affordable and understandable to SMEs and medium sized companies.
