Many companies are now joining the trend of switching to unified communications (UC) tools or Unified Communications as a Service (UCaaS) for business communications. UC allows functions such as audio conferencing, web conferencing, instant messaging (IM), video conferencing, screen sharing, and social collaboration to be consolidated into one, easy-to-manage application, which significantly cuts costs and appreciably improves productivity.
While the benefits are apparent, many businesses still hesitate to make the switch because the return of investment (ROI) of UC seems unclear. It is not exactly easy to measure the specific returns that UC generates, especially if taken from a revenue perspective, but we can compare our pre-implementation balance sheet against the post-implementation one. More revenues after implementation could indicate that the UC facilitated more efficient operations and led to significant cost savings. If the total of these gains is greater than the cost of implementing the UC, we can say that the investment has paid off.
The value of UCs and UCaaS can be better understood by first defining the two drivers behind measuring ROI: hard savings and soft savings.
Hard savings vs. soft savings
Hard savings refers to savings that can be measured in dollars and cents, while soft savings refers to savings in terms of reduced risks or improved transaction flow. Soft savings are difficult to quantify and are measured typically in terms of satisfaction or ease of use. Many companies use a combination of the two to ascertain whether an investment paid off, although hard savings are more commonly utilized and are often considered to be more accurate indicators of a company’s savings or returns from an investment.
Below are some of the hard indicators that many businesses use for measuring ROI:
Overhead cost savings
UC eliminates the need for an analog phone line and uses a more cost-effective medium (the internet) for voice calls, text, and/or video communications. By using a UC platform, your business can also expect to reduce access costs and enjoy bundled services, which often contribute cost savings, too. Access costs refer to subscriptions and other costs that allow customers to access the network.
Lower IT costs
In-house IT infrastructure is costly to purchase, set up, and maintain, which is a risky proposition for small- to medium-sized businesses (SMBs) with limited real estate and manpower. UCaaS eliminates the need for extensive IT infrastructure while scaling down costs to make them predictable. This can help your business budget accurately.
Redundancy in business communications means overlapping communications applications/software subscriptions. This tends to be a result of a constant upgrade to a newer, perceivably better application, and what many businesses fail to recognize is that this becomes a costly practice caused by the incessant integration of apps to gain one or two unique or better features from each.
UC eliminates this money drain by centralizing its tools and apps onto one platform. This way, you can be sure that your business is only paying for features it uses, and that confusion and miscommunication can be minimized greatly.
Many businesses nowadays operate with remote workers, contractors, and/or multi-office setups, and as a result, business travel is on the rise. Multi-office setups induce managers to travel more than they would with a traditional office. Heavy travels can represent a lot of wasted time in transit and in traffic, time that could have otherwise been used productively.
Solutions such as SinglePoint Global’s Unified Communications allow your business to connect its workers and offices under a consolidated communications suite, reducing the need for constant travel.
Efficient use of resources
UC ensures that employees are spending their time doing work rather than searching for information that should have been readily available from the get-go. The average worker spends 2.5 hours a day searching for information. For a business that pays each of its knowledge workers $80,000 a year, this represents $25,000 paid out just for time spent searching for information. For many SMBs, this represents a lot of wasted money.
In our next article, we will be discussing soft indicators, as well as how your business can use the two types of indicators to measure ROI. Stay tuned.