The new economics of virtual meetings in the race to digital transformation Virtual collaboration is now a critical tool for corporations. It’s not just a cost saver anymore but a catalyst to transform business models and no longer the exclusive domain of IT, Sam Chon and Carol Zelkin write The current era of the digital business promises to remake every industry. The winners will be decided by who seizes the possibilities and how quickly. The explosion of data, mobility, advanced analytics, and new digital technologies offer tremendous opportunities. And challenges. How employees collaborate with each other and with partners and customers is an important part of the digital transformation of every business. Twenty years ago, videoconferencing was expensive, complex, and didn’t provide the expected savings from reduced travel that companies were expecting. Back then, video’s limited use, high cost, quality problems, and the tradition of face-to-face meetings were part of the explanation. Today, not only has the technology evolved: business culture itself has changed dramatically as well. The pace of business has quickened so businesses must be more agile to adapt to changing market dynamics. In 2014, nearly 25% of employees were remote or mobile workers, according to a study by Frost and Sullivan, and that number will grow. The work day has expanded for many beyond 9 to 5. Consumer devices have entered the workplace. Many teams are spread across different states, countries, and even continents, so remote communications for day-to-day activities are vital. And the Millennial Generation has brought a passionate embrace of technology and a desire for work/life balance, meaningful job roles, and a lower tolerance of poor working conditions. A study of nearly 50,000 businesses in 34 countries by Gallup in 2012 cited employee engagement as a major factor in low employee turnover, high levels of job satisfaction and productivity, and many other factors-including the bottom line success of companies. Among ways to increase employee engagement is a collaborative environment between employees, management, and partners wherever they are located. What is the downside of low employee engagement? The study estimated that it costs the US economy alone about $370 billion a year. So as companies reorganize to take advantage of digitization, the networked society, and globalization, virtual collaboration is contributing meaningfully to important metrics that support growth and a company’s continued prosperity. The value of richer communications experiences The new generation of virtual collaboration technologies includes audio conferencing, immersive telepresence, videoconferencing, and unified communications. These products are much better, cheaper, and more readily accepted in today’s business culture than past solutions. Videoconferencing in particular produces much more impactful meetings. What does that mean? The ability to see body language and facial expressions. To share and jointly review documents and media. To include multiple participants from different locations. To record and playback meetings. All of these features and many others contribute to better outcomes, such as lower travel and administrative costs, increased sales, higher productivity, better decision making, and happier employees, partners, and customers. No wonder virtual collaboration is catching on in corporate departments and as part of innovative marketing strategies. So it isn’t surprising that the virtual collaboration products market is set to double between 2013 and 2020, going from $3.31 billion to $6.4 billion, according to a 2015 Transparency Market Research study. While videoconferencing has been adopted in corporate board rooms by executives, it hasn’t been made available in many companies to all employees. But now, the costs for the solutions have come down dramatically and can be covered by savings from minor changes to corporate travel guidelines, workplace modifications, and other adaptations. If you’re a line of business manager, it’s time to sit up and take notice. Moving collaboration technology out of corporate IT silos Two business trends are helping to further accelerate the spread of collaboration solutions. First, corporate lines of business are increasingly acting independently of IT to get the tools they need. This ‘shadow IT’ phenomenon has been going on for a decade or more. A 2014 study by the Corporate Executive Advisory Board found that 40% of technology investments in large organizations now occur outside of IT departments. And that is expected to increase to 90% of tech spending by 2020, according to Gartner, with CMOs spending more on IT than CIOs by 2017. Many factors are contributing to this trend. Cloud as-a-service models. Consumers bringing their own technology into the workplace. The greater user friendliness of devices and apps. So to manage the demands of employees and teams, now groups such as Facilities, Corporate Travel, and Human Resources feel empowered to purchase and support technology, including collaboration solutions. The digitization of business is thus freeing diverse departments to get what they need and redefining job roles within those departments. A second trend is the popularity of the Integrated Business Services model. The model goes beyond individual departments sharing resources. It represents the elimination of departmental silos in favor of enterprise-wide access to resources and strategic knowledge. According to a 2016 report by Deloitte Consulting GmbH, ‘A move to Integrated Business Services requires much more than simply asking shared service centers to co-operate. It represents a fundamental change in how businesses utilize global assets and capabilities to most effectively deliver multiple functions, including Finance, HR, Procurement and IT.’ Among those different functions are a range of services and solutions that help individuals to do their jobs better. Offices, desks, computers, phones, cleaning services, caterers, employee benefits plans-the list of such services and solutions goes on. Within businesses adopting the Integrated Business Services model, different departments are now transitioning from being administrators and operators of these services to experts, business partners, and value enablers. They are actively using their tools and expertise to provide strategic support throughout the organization. Their value is measured not only in the ability to trim costs and increase productivity but also in the ability to enable scale and growth. So the budgets in these departments are now seen less as sunk operational costs of doing business and more as investments with future returns. Voice, video, and Web-based collaboration solutions are a perfect example of such a value enabler from within individual company departments. They are seen as strategic resources that can be adapted by those with imagination to serve many different types of jobs, cross-departmental teams, partner and supplier relationships, and other use cases. Virtual collaboration and business travel Human Resources. Facilities. Corporate Travel. These three corporate departments are believed to incur the highest total spend for most businesses. It’s time to value-enable them in the spirit of the Integrated Business Services trend with virtual collaboration solutions. At stake are tremendous savings that will more than pay for the new technology. And that’s just the beginning of the benefits to be had. Virtual collaboration gives employees greater flexibility in how and where they can work. It helps companies consolidate office space and use it more efficiently. And it is being used in some very novel approaches to institutional knowledge retention. They include encouraging soon-to-retire workers to record videos to pass on their experience and knowledge and retaining other retired workers part-time to be available by audio or videoconferencing links as expert resources. In 2015, corporations spent $1.3 trillion on business travel (air, hotel, and car rental costs only), according to a 2016 report by the Global Business Travel Association. Approximately 75% of that ($975 billion) is business travel that delivers top-line value to corporations, including sales meetings, customer visits, or the performance of a service that generates revenue. The remaining amount ($325 billion) is for internal travel within company offices for training or internal meetings. It’s no secret that there is very little if any oversight over or tracking of how business travel decisions are made. Corporations tend to decentralize these decisions over thousands of employees in different departments. With the amount of money spent on travel and the countless hours in lost productivity for people on the road, today’s business now has the opportunity to rethink travel decisions and propose viable alternatives. A key opportunity is to reduce internal travel within companies by encouraging employees to meet virtually instead of holding face-to-face meetings. With more control over videoconferencing resources, travel managers can determine what travel to approve or indicate what might be better handled through virtual or immersive technologies. An emerging practice within the travel management sector focuses on adopting a data-driven approach to analyze which corporate travel is necessary and which may be replaced or augmented with virtual meetings and collaboration technology options. Travel management consultancy firms, like Advito, are also building advisory services to aid organizations in analytics, policy management, strategy development to integrate traditional travel and virtual collaboration options. Approaches evaluate travel policy including looking at the purpose of trips, expenses by department and user, frequent travel routes for internal vs external travel and other factors to determine where less optimal spend is occurring. Once this is known, the corporation can target specific behaviors, departments, and individuals to provide suggestions for reduced spend outcomes for trips deemed less necessary than others (as shown below). This is a balanced approach to travel analysis with the goal of discovering opportunities for reducing unnecessary travel time and costs using virtual collaboration tools where appropriate. Cost and productivity savings are just two of many other benefits from using virtual collaboration. A South American healthcare organization used video collaboration to link doctors with patients, saving 500,000 miles in annual travel and providing 40% more consultations. A global financial services firm used video in branches to link remote experts and customers, seeing sales increase 15%. A large European manufacturer reduced travel costs by 50%, increased productivity 30%, and cut time-to-market 10%. Budgeting for virtual collaboration from bottom line savings Within individual companies, the savings from reduced internal travel should be enough to more than cover the costs of new collaboration solutions. The sample travel optimization worksheet below is based on a company with $1 billion in gross revenues. The estimated amount of 1.5% of revenues spent on travel is based on industry averages. So are the estimated percentages of total and internal-only travel for average corporations and the 10 largest North American locations. The sample target of reducing internal-only travel through the use of virtual collaboration by 25% would produce savings of nearly $500 million among a top 10 corporation. These savings would more than cover the cost of the collaboration solutions and all related costs. This worksheet may be useful to you. Just plug in the numbers from your own company and industry and see how much different percentages of reduced internal travel can generate in savings. Chances are, even small reductions will more than pay for new virtual collaboration solutions. After these one-time capital costs, the savings will continue to accrue. In the example above, over five years the company will save $2.5 million in travel ($500,000 x five years) on a single investment in collaboration solutions. So if you’ve been wondering how to help in the digital transformation of your company, wonder no longer. It’s time to reevaluate collaboration technologies to better manage your travel budget. Look into how you can use it throughout your company to do things faster, better, and less expensively. Virtual collaboration is available, affordable, and ready for prime time. Your employees will love it. And the budget is readily available from the savings you’ll reap from even minor changes to your travel budget. ABOUT THE AUTHORS Sam Chon is Sales Business Development Manager, Collaboration, at Cisco Systems, and Carol Zelkin is IMCCA Executive Director. The IMCCA is a non-profit industry association resolved to strengthen and grow the overall conferencing and collaboration market by providing impartial information and education about people-to-people communication and collaboration technology and applications. Founded in 1998, the IMCCA membership is open to end users, vendors and other interested professionals who wish to share their disciplines and knowledge for the benefit of members and the interested general public. The IMCCA offers an open and interactive environment for these activities, including participation in trade shows and industry events and the IMCCA website. If you are interested in more information about the IMCCA please visit our website or contact the Executive Director, Carol Zelkin at +1 516 818 8184 or


Virtual collaboration is available, affordable, and ready for prime time
Total business travel spending (BTS) Top 15 Markets (2015) Source: Global Business Travel Association
Source: Advito, 2016