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Sep
14
2011

Unified Communications – ROI versus TCO

jon arnold2 Unified Communications – ROI versus TCOThis is a core building block around UC decision-making, and for IT to really take ownership here, they need the right mindset. I say this not just to justify the investment to management, but to have a realistic basis for UC’s deployment over time.

The first thing to note is that any initial UC deployment will be a building block. In the legacy world, when you install a PBX, the main work is done. From that point on, you manage the asset; it’s pretty much a finished product. Unless you’re deploying a soup-to-nuts UC solution – which in theory never happens – the initial offering will address some core needs, with the understanding that others can be added over time. UC is very much a modular concept, so a one-and-done approach isn’t going to work.

Second, you need to view UC as a service, not a product. Again, if you’re steeped in legacy telecom, this may not come easily, but it must. A PBX is a physical asset and a capitalized investment with a long operating life. Durability is a core virtue, but flexibility is not. As you know, the PBX is very good for its designed purpose, but today telecom is just one element in the communications spectrum.

In the bigger picture, the nexus of communications is shifting – or has already shifted – from the desk phone to the desktop, and that’s where UC comes into play. Most of the PBX’s functionality can now be achieved either on less costly IP phones or on Web-based applications. UC is the underlying platform that can support these alternatives, but more importantly, to also integrate voice with other modes.

When you take these two factors into account – UC is modular and UC is a service – the conventional ROI metric becomes difficult to defend. While you still need to think about communications as an investment – and not just an expense – there is no hard asset to gauge a return against with UC. Getting management to buy into this shouldn’t be that difficult since this means your capital budget needs will now be lower.

With UC, you’re essentially shifting capital dollars into an operating budget, and that takes us to TCO – total cost of ownership. This is actually a misnomer with UC if you’re going with a hosted or cloud-based offering. The trend is going this way, at which point the utility model takes over, and you don’t really own anything. More accurately, it becomes total cost of operation, as the only pieces you own are some inexpensive IP phones.

Regardless, the key takeaway is to value UC on the basis of TCO. In the short-term, your total financial outlay will be less, as you’ll be substituting a lot of capital dollars for a relatively low monthly licensing fee, which often incorporates the cost of any new IP phones. Over time, your TCO will rise if/as you add other UC elements, but you’ll be getting more benefits in return. In my view, this really is the key to getting full value from UC; you take only what you can use and you can add other pieces any time. You still retain cost control and cost certainty, and that puts you in the driver’s seat for getting company-wide support for UC. How does that sound to you?

Permanent link to this article: http://blog.adtran.com/unified-communications-roi-versus-tco/

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