Forget UC ROI

by Dave Michels

Stop wasting your time with UC ROI tools. It’s that simple. ROI is for sissies.

ROI, or return on investment, is a simple yet abused concept. The idea is that a business (or person) should not spend money on something without a clear and positive benefit. To some degree, everything a business does is supposed to have a positive ROI. If only life were that simple, the reality is not every expenditure results with a measurable increase in revenue or decrease in cost. Take yourself for example – is your cost (salary plus burdened costs) lower than the benefits you provide? Hopefully the answer is yes overtime, but things change. HP just did a new ROI and re-determined that 11,000 (more) employees need to go.

Total Cost of Ownership (TCO) is different than ROI. TCO examines the full cost of a given solution like a PBX. The total cost includes actual out of pocket costs as well as hidden costs like the time required to maintain and update. TCO can, but usually doesn’t, include opportunity costs. TCO is important.

UC ROIs put too much emphasis on the wrong thing. Sure, a UC solution can save money – both hard and soft savings are achievable. The ROI effort and process reveals a bureaucratic approach to the obvious. Does it take a committee to call an ad hoc video conference? If yes, then I would suggest survival should be the priority. Business works faster than it did before, people communicate more freely than they did before. Those that don’t – won’t.

There’s two major reasons why ROI is a waste of time. First, it is now a basic cost of doing business. Secondly, you are already doing it.

Voice is important, but no way to run a business. Skype doesn’t carry the most long distance because it’s cheap. It does so because it offers easy and rich consumer communication. A Skype conversation is more productive than email, Text, or voice alternatives. The fact that Skype is so popular is indicative itself that it moved into the mainstream – has your company?

Evidently, some execs missed the FAX that said multi-modal communications are are a god-given basic right. A UC ROI is blasphemous.

Time is much better spent on TCO analysis – which is not a trivial undertaking. Particularly with cloud v premises-based. By the way, cloud is always cheaper than premises, and if you came with a different answer, you did it wrong. More on that later.