This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
The Challenges in Funding UC Projects
It is budgeting season again as most organizations start compiling their 2011 budgets. The primary battle in budgeting is for capital to fund new hardware/software and additional contractor resources.
Let's say an organization adds to the 2011 budget a project called "Common Customer Voice Experience", with the objective of giving any customer who calls any number for the organization, a good and consistent experience. All toll free and DID numbers would come through a centralized voice portal (IVR) which would use a common voice talent, common music for when customer is on hold, and menu options that would allow a customer to either use self-service or get to the right person, anywhere within the organization. The organization already has a common web portal environment where all customer-facing web pages have a common look and have links to other parts of the organization. Will this project get funded? It depends on:
1. Who funds it?: Is this project funded by IT infrastructure, IT applications, or the various business divisions? What happens if some of the business divisions want to fund this, and others do not? Most organizations that have succeed in getting a common Web experience have a centralized enterprise architecture group that works with the application groups in mandating and governing standards, and they design and build out the common Web infrastructure that the rest of the business uses.
2. What is the risk?: UC projects require the integration of people, process, information, and technology across all parts of the organization. Projects that have a large scope across many different IT and business areas have a history of failing. Plus, the expectation is that voice communication should always be there. If the web fails, people can call. If the telephony fails, people panic.
3. Where is the ROI? There could be some infrastructure savings, increased productivity, and better customer loyalty. Is the ROI calculated over 2, 3, 4, or 5 years? If the ROI is not great, or equal to other projects seeking capital, is it still worth doing for the greater good of the organization? If increased productivity is one of the business benefits of a UC project, have managers offered up head count that they will cut? If employees are 5% more productive, does this mean that 5% of the staff can be cut?
4. Why this project?: Are the company’s back-end IT systems in good enough shape that UC is the bottleneck on improving productivity and offering better customer service? Is a consistent customer experience a must-have for an organization, no matter what the ROI is? In the early years of the Web, lots of Web projects did not have a good ROI, but the Web was the next big thing and had a lot of hype.
5. How will it be implemented? A best of breed approach or a single vendor to do it all? UC is a combination of hardware and software with a session management layer to glue the communication systems with applications and information. There are not strong single vendor solutions in UC like there is in the web space. A best of breed approach requires an integrator. Because the standards are still evolving, there is a fair amount of customization.
Things that UC vendors can do to help ensure UC projects make it through the budgeting process and that will appease the CIO and CFO are:
1. Share the risk: Today, a lot of UC solutions require up-front investment and if the project is not successful, there is a lot of finger pointing and the organization is out the capital. Structuring a deal so that an ROI is guaranteed else a refund is offered.
2. Build a new environment: Evolving a legacy system can be more time consuming and a higher risk of outages than putting in a new system and migrating at the company’s pace with the option to fall back if something fails (technology, business process, or people/user training).
3. Educate enterprise architects: Every CIO & CFO has people that they trust to ensure projects do not have any major gaps. A lot of enterprise architects have worked on large ERP, CRM, SCM, and other cross organization and platform projects. Architects are responsible for ensuring people, processes, information, and technology are effectively integrated.
4. Provide a complete integrated UC solution: Partnerships and alliances only go so far. The objective is for a common Integrated Desktop Environment (IDE) and management system to be able to build and support a complete UC solution across all components so that the customer does not have to become the integrator on the technology side. Having 7 different configuration and management systems for a UC solution takes out a lot of the potential efficiencies of an overall UC solution.
5. Minimize upfront capital spend: Most UC projects have an ROI, but the ROI may not be as great as other projects that need capital. Most organizations have a limited amount of capital. If the project can be funded by reducing IT costs and people on a monthly basis, taking some of this savings and applying it to a UC project can be a win for everyone.
Referring back to the example above, "Common Customer Voice Experience" project, what will most likely happen to this project is that the scope will be trimmed back to just a pilot to minimize risk, prove the ROI, educate everyone, and to minimize capital spending. The following year, the pilot may be expanded. The third year, the organization is ready for a full rollout, but by then the technology, vendor solution/alliances, business priorities and processes have all changed and the organization will still be hesitant to make a major capital investment.
Something has to change; else most UC projects will just be point solutions and pilots with the full benefits from UC going unrealized in the foreseeable future. What do you think UC vendors should do to help UC projects get funded?