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Identifying the Value and Return of UC

A new tool aims to help both Solutions Integrators and enterprises navigate through the cost elements of the UC environment.

Despite the Unified Communications market's steady growth, Solution Integrators (VARs, resellers, system integrators, etc.) are still finding it difficult to prove the Return on Investment (ROI) of UC solutions to enterprise customers. According to a study from UCStrategies, more than 50% of UC proposal rejections are due to a lack of ROI or budget, which means that it's more important than ever to help justify UC deployments with a solid understanding of the benefits and costs.

When making a decision on whether to invest in a UC solution, there are many factors that organizations must consider--return on investment, benefits they hope to achieve, initial cost of the solution, ongoing costs of maintaining and managing the solution, etc. While many organizations focus on the initial cost of purchasing and deploying a system, it's just as important to look at the total ROI and TCO over several years in order to get a true picture of the real cost and impact of the solution.

There are a number of UC ROI and TCO tools available today, but most have been developed for a particular vendor, making that vendor's solution come out to be the best solution. In addition, these tools don't take into account the benefits of UC and their impact on ROI.

To help organizations better identify the expected ROI of a UC solution and overcome one of the biggest challenges facing UC vendors and channel partners, Phil Edholm and I have developed the UCStrategies UC Benefits and ROI Analysis Tool.

Designed for use during the sales process, VARs and resellers enter information about the customer's configuration. There's a basic "Quick Start Analysis" that requires only five data points to be entered in order to provide the ROI and investment results.The VAR can also use a more detailed data entry option to provide more customized results for their specific customer. In addition, there are financial analysis sections and a Benefit Value section that can be utilized to paint a fuller picture.

Information entered includes the number of users, the portion of users that require basic telephony, UC, Group Collaboration, and Advanced Mobility, as well as the number of contact center agents, and whether the deployment will be a PBX augmentation or replacement. The ROI analysis is based on system pricing for the specific configuration entered, including equipment, lifecycle upgrades, installation, training, administration and maintenance, power and facilities, data networking and trunking, as well as other elements such as virtualization, centralization, survivability, etc.

One thing that sets this UC Benefits and ROI Analysis tool apart from others is that it looks at the "Benefit Value" of the solution, which takes into account the value that UC provides to organizations in terms of business impact. The tool identifies seven categories of UC benefits:

* Cost savings from SIP trunking
* Business continuity
* Collaboration improvements
* Mobility
* Communications Enabled Business Processes (CEBP)
* General business optimization
* Impact on the company's contact center

The effects of these benefits are quantified based on a number of factors. For example, by entering data on average number of trips per user, average trip cost, percentage of trips that can be avoided, and other data points, the tool can estimate the impact and cost savings of collaboration. The same can be done for the impact of mobility, CEBP, and the other UC benefit categories.

While the customer's IT manager is most interested in product capabilities and initial purchase and deployment costs, the CIO and CFO have other priorities. When dealing with these individuals during the sales cycle, it's important to have access to the various financial metrics to help identify not only the costs of the solution, but the expected returns, including internal rate of return. This tool provides not only data on the six-year costs of the UC solutions, but also financial metrics that compare the total costs of the proposed UC investment with the customer's existing solution, taking into account depreciation, etc.

By understanding the ongoing costs of a UC solution, as well as the benefits it will provide, organizations can make better informed decisions about deploying UC. For a good overview of the tool, you can view a video that Phil produced about what the tool can do and how it can be used. Our hope is that this tool will help both Solutions Integrators and enterprises navigate through the UC environment.

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