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Microsoft Unified Communications - Improving User Productivity and Saving Communication Costs Whitepaper


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Microsoft Unified Communications - Improving User Productivity and Saving Communication Costs Whitepaper

  1. 1. WHITE P APER Improving User Productivity and Saving Communications Costs with Microsoft Office Communications Server and Enterprise Instant Messaging Sponsored by: Microsoft Robert P. Mahowald Randy Perry March 2010 EXECUTIVE SUMMARY At its roots, instant messaging is text chat on the desktop, with a sophisticated ability to display the real-time presence status and communications preferences of users. Inside a business, deployed by an IT organization, with rich presence information and F.508.935.4015 integrated into other applications and data sources, it becomes enterprise instant messaging (EIM). In the past few years, EIM has opened the doors of many businesses as a new mode of collaboration with its own attributes, beyond email. The combination of presence and EIM is emerging as a very powerful tool for P.508.872.8200 bettering the collaboration experience of business users, lowering costs for IT managers, and creating an integrated continuum between work objects (documents, presentations, spreadsheets), collaboration modes (Web conferences, voice calls, video calls, instant messages), and workflow characteristics (scheduling, processing, brainstorming, editing, approving). Users gain significant advantage in collaborating Global Headquarters: 5 Speen Street Framingham, MA 01701 USA with more information about their colleagues and within the context of their work. IDC calls these communications-enabled business processes (CEBP), and EIM can drive more efficiency in these CEBP workflows, reducing the effect of "human latency." Finally, presence and EIM provide the essential backbone for unified communications (UC). Figuring out how to unify the communication infrastructure is often the single biggest collaboration initiative facing IT organizations today. Identity, presence, and instant messaging are the primary tools that help many firms gain an understanding of how to build out and support a real-time collaboration system and put them on a path toward a more comprehensive UC deployment. To understand the benefits of rich presence and EIM, IDC conducted five executive- level interviews with different current Microsoft Office Communications Server (OCS) customers that have been using the solution for presence and EIM for between 12 and 36 months. IDC constructed a detailed interview guide to compare end-user experiences and business outcomes before and after the Office Communications Server deployment. The result provided IDC with a delta that was built into an IDC return on investment (ROI) analysis, yielding three key measures: annual benefits, return on investment, and payback period.
  2. 2. Highlights from IDC's research on the benefits of using presence and EIM are: Communications cost savings Customers reduced long distance and teleconferencing costs by $12,404 per 100 users per year. User productivity Users are saving an average of 1.7 hours per month (or about $26,634 per 100 users per year back into the system) by quick IM chats instead of waiting for email and telephony responses, accelerating file sharing and document collaboration and approvals and answering customer inquiries faster. Customers reported lowering project completion time by as much as 13%, generating an average of $2,141 per 100 users per year. IT support staff productivity Greater efficiencies have enabled these companies to move an average of 2.1 support staff to other projects, saving them $2,860 per 100 users per year. Service desk operations experienced a 9% monthly reduction in the number of trouble tickets and a 43% reduction in average call time — a time savings benefit of $889 per user per year. ROI and payback The aggregate return on investment is 258% with a payback period of 10.7 months. SITUATION OVERVIEW Instant messaging among consumers had already reached the 19 million worldwide user mark by 2000, when the first business-focused EIM products started to filter into the workplace. In the meantime, MSN, Yahoo!, and AIM consumer IM solutions had started to make their way into organizations as easy, effective, and efficient communication tools, creating a whole channel for communication outside the control and management of IT organizations. The result over the next few years was a broad acknowledgement that while consumer IM was a valuable productivity tool, it needed to be made "enterprise ready" and managed using authentication, archiving, security, and directory tools. Enterprise instant messaging platforms have been available since and have largely become an organizational prerequisite, with a clear set of user and management features and increasingly definable value to end users, business owners, and IT organizations. Additionally, IT has started to create trusted federated relationships with partners and customers and enable home office and mobile worker scenarios through remote access. By letting colleagues know the ways in which they want to be contacted and having these capabilities regardless of physical location, users have finally been able to take control and make choices about work location and work style. 2 #222262 ©2010 IDC
  3. 3. Another technological leap has powered EIM and rich presence (meaning more than just binary present/not present information) forward in a big way: the integration of communications into data applications that transform how business users incorporate collaboration into their workflow. Presence has lit up the office suite, business processes, and authoring, scheduling, workflow, and team collaboration tools. Working in these tools, to create, brainstorm, edit, approve, and present, typically requires collaboration and teamwork, and these processes are made easier by presence. Features and Benefits Key features included in enterprise instant messaging are: Rich presence, which can provide a rich set of useful information: Indicating whether someone is available to collaborate Indicating the channel (IM, email, voice, mobile, video, and physical location — primary office or home office or customer site) on which someone is available Providing the activity status of a colleague (Is he or she on the phone? In a meeting? In a conference room with a customer? When will he or she be free?) Multiparty instant messaging File sharing Peer-to-peer audio/video capabilities Desktop, Web, and mobile clients Remote access Enterprise instant messaging yields substantial benefits in business value, costs savings, and return on investments. Our interviewees found: Improved user productivity with the ability to find and respond to people quickly via the right communication tools Process improvements because of embedded real-time collaboration capabilities More optimized communications infrastructure, with reduction of email and voicemail overload for users and IT Improved security and compliance because of reduced data leakage More effective introduction of mobile and teleworking benefits for employees All told, these gains pointed to significant average annual cost benefits and an ROI of more than 200%. ©2010 IDC #222262 3
  4. 4. Microsoft Office Communications Server Office Communications Server is part of Microsoft's Unified Communications platform. It is available in Standard and Enterprise configurations and provides all the real-time communications capabilities needed by organizations. Office Communications Server provides provisioning and management of user IDs, access to the global address listing (GAL) from within Active Directory, and user access and management from a variety of clients, including Microsoft Office Communicator, Communicator Web Access, and Communicator Mobile. OCS Standard Client Access License (CAL) provides core IM and presence capabilities, file transfer, and 1:1 voice and video capabilities. Organizations can federate select presence information from OCS to OCS clusters in other (partner, customer) organizations if desired and can federate with public clouds such as Windows Live, AOL, Yahoo!, and Google Talk. OCS Enterprise CAL adds on-premise hosted audio, video, and Web conferencing and enterprise voice. For the purpose of this paper, we focused on the benefits and cost savings from presence and enterprise instant messaging functionality, which require an OCS Standard CAL. Business Value of Presence and Enterprise IM Study Demographics IDC conducted executive-level interviews with five current Microsoft customers that have been using the solution for presence and EIM for between 12 and 36 months. They are large companies with an average of nearly 31,000 employees, nearly three- quarters of whom are using EIM. The companies are highly distributed, with EIM users in an average of 135 sites. There were myriad reasons for deploying Office Communications Server, and four out of five companies have integrated presence and IM capabilities into their business processes. Table 1 displays the demographics. T ABLE 1 Company Demographics Number of employees 31,000 Percentage of users on EIM 73% Number of sites using EIM 135 Number of servers running OCS 30 Geography North America; Europe, the Middle East, and Africa Source: IDC, February 2010 Note: For the purpose of the analysis, all benefit and cost figures are quoted per 100 users. 4 #222262 ©2010 IDC
  5. 5. Benefits The benefits of the Microsoft’s presence and IM solution fall into three high-level areas: user productivity increases, communications cost reduction, and increased IT support staff efficiency. The average annual savings are shown in Figure 1. FIGURE 1 Average Annual Benefits of Microsoft OCS Presence and IM Solution per 100 Users IT staff efficiency ($3,749) Cost reduction ($12,404) User productivity ($28,775) Total = $44,928 Source: IDC, February 2010 Reducing Communications Cost The adoption of EIM has significant impact on traditional communications costs. In particular, companies save on telephony costs by using IM instead of calling or using PC-based audio for calls that would otherwise go through the traditional public switched telephone network (PSTN), employees save on roaming charges by using their PC for calling their colleagues while traveling, and IT saves on email and voicemail. The companies we interviewed indicated that within a few months of the introduction of presence and IM, users had increased their usage of IM by 450%, resulting in their leaving far fewer voicemails for colleagues and using traditional email less as well. As one customer said, "Our voicemail use is down 70% since we deployed EIM, and email traffic has declined another 20%." Overall voicemail is down an average of 53% across the five companies. With regard to PC-based voice calls, one customer estimated that the company is "doing about 12,000 per week, where before all those calls would go through the traditional telephony system." In the companies we spoke to, most users are now equipped with headsets and video cameras, reducing the barrier to using the new modes of communication. The companies on average saw a savings on communications cost of $12,404 per 100 users annually. ©2010 IDC #222262 5
  6. 6. User Productivity Improvement End users pointed to recurring time savings benefits, including more quickly finding people; reducing email and voicemail tag; faster file sharing, editing, and approving documents for collaboration; and being more responsive to answering customer queries. Time savings in these areas total nearly two hours per user per month. As one customer noted in the interview, "Altogether, I'd say that each user saves several minutes per day easily because there is no more phone tag, email tag, or going back and forth on projects. We don't leave voicemails within the company anymore because we have IM. So time just waiting around has been cut a lot." The value of presence information is made clear considering the reduction in response times from intracompany communications. Annually the companies are recognizing an average of $26,634 per 100 users in additional productivity. In addition to speeding up individual tasks, end users are able to more quickly complete team projects, thus increasing productivity. One company related how being "connected real time" enabled it to go from a serial process to a parallel process, greatly reducing the time to complete group projects. Because project time is reduced by as much as 13% in some cases, the company is recognizing around $2,141 per 100 users per year in saved time. The total value of increased user The total value of increased user productivity equals $28,775 in annual savings per productivity equals 100 users. $28,775 per 100 users. IT Support Staff Productivity Increase As a result of the increased use of instant messaging and the reduction in email and voicemail traffic better suited for a quick chat, companies are able to manage and support communications with fewer IT staff. Additionally, quicker troubleshooting means that fewer staff are required to support operations. On average, companies we spoke to saved the equivalent of 2.1 IT staff across the deployed user base. As one customer said, "We have been able to move staff on to other projects. This has been worth at least between two and three full-time equivalents [FTEs] of time on projects. These moves allow us to be more business enabling and provide better support." Companies also experienced increased IT efficiencies in their service desk operations. They found that EIM is more efficient at providing quick responses and access to experts. By shifting the communications load to IM, companies have reduced the complexity of their communications, and customers have been able to reduce trouble tickets by 9% per month. More impressively, the average help desk call time has been reduced by 43% as problems are more standardized and easier to troubleshoot. These savings, taken together and applied over the course of an average year, yield a savings of 30 minutes support time per user or $3,749 per 100 users in value. 6 #222262 ©2010 IDC
  7. 7. Investments On average, companies spent $15,160 per 100 users in initial costs to deploy OCS EIM solutions and another $5,890 per 100 users annually for a three-year total of $32,830 per 100 users (see Figure 2). FIGURE 2 Three-Year Investment in Microsoft OCS EIM per 100 Users 16,000 14,000 12,000 10,000 ($) 8,000 6,000 4,000 2,000 0 Initial Year 1 Year 2 Year 3 investment Annual IT support Annual licensing User training IT training Initial consulting Installation (IT staff) Initial hardware/software Source: IDC, February 2010 Chart of Accounts Investments to deploy presence and instant messaging were in the following areas: Hardware and software. Companies deployed from 7 to 100 servers, depending on the number and distribution of users. Installation (IT labor). Deployment took an average of seven months and required 3.2 FTEs in support for the total deployed user base. Installation. This involves third-party consulting. ©2010 IDC #222262 7
  8. 8. Initial training (IT staff). Companies trained 2–3 staff over 3.5 days. Initial training (users). Companies offered one half hour of training either in formal sessions or online to all of their users. Ongoing costs. These costs included server licenses and 1.8 FTEs in direct support annually (for the total deployed user base). Cost-Benefit Analysis Figure 3 displays the results from the cash flow analysis. Note that investments are highest at the time of initial deployment because some new software and hardware is purchased up front. Annual ongoing costs decline slightly and remain stable over time. Benefits tend to increase slightly over time as Office Communications Server gains greater adoption in the organization and users become more proficient with its capabilities. FIGURE 3 Benefit, Investment, and Cash Flow per 100 Users 140,000 120,000 132,288 100,000 80,000 ($) 60,000 55,637 56,194 40,000 22,953 15,161 20,000 5,886 5,886 5,886 0 Initial Year 1 Year 2 Year 3 investment Annual benefit Annual investment Cumulative cash flow Source: IDC, February 2010 8 #222262 ©2010 IDC
  9. 9. Return on Investment IDC performed a three-year ROI analysis using the information gathered from the interviews with current Microsoft Office Communications Server customers. Results of the aggregated data demonstrate that these customers received a return of $2.58 for every $1.00 invested in the Office Communications Server presence and EIM solution. Payback time is less than one year — at 10.7 months. Table 2 shows the complete ROI results. T ABLE 2 Three-Year ROI Analysis per 100 Users Benefit (discounted) $104,845 Investment (discounted) $29,298 Net present value $75,547 Return on investment 258% Payback 10.7 months Discount rate 12% Source: IDC, February 2010 ROI METHODOLOGY IDC performs a three-step process to calculate the ROI and payback period: Measure the benefits from reduced costs, increased availability, and improved IT efficiency since the deployment. Ascertain the total investment made while deploying the solution (hardware, software, FTE requirements for deployment and annual maintenance, customization, training, and consulting). Project the investment and benefit over three years and calculate the ROI and payback for Microsoft Office Communications Server. Benefits User productivity is defined as hours users saved per month as a direct result of using EIM (fewer wasted communications, faster internal response times, reduced external customer response times, and faster project cycles). ©2010 IDC #222262 9
  10. 10. Cost savings come from reducing communications cost due to increased use of PC-based audio and reduced long distance usage from increased reliance on IM. IT staff productivity results from consolidation of communications platforms, which reduces maintenance support requirements, complexity, and help desk support requirements as help desk professionals using IM are able to provide end users with information faster than in the past and resolve trouble tickets more quickly. CHALLENGES The biggest obstacle to crossing chasms has always been the model that precedes the innovation. Both IT staffs and telephony staffs tied to their current equipment and services, and users tied to their paradigms of workflow and accomplishment, will need strong evidence that presence and EIM, coupled with desktop IP voice and video, represent new opportunities to contain collaboration activity in the context of the applications they understand. In talking with customers and in documenting the ROI value with this study, IDC has found that the case for an EIM solution for an organization is compelling and clear and is by no means restricted in its application to organizations of particular size. Every organization can benefit from the value that rich presence and managed real-time communication capabilities provide. While IM, desktop voice and video, presence, and context-based collaboration may not replace familiar modes such as email, they have become a must-have complement in today's business environment. CONCLUSION The seemingly simple technological feat of accurately displaying user status and enabling text chat based on presence provides an outsize benefit for business users. Inefficient workflow, slow response times in the service desk, and poor task focus and orientation because users have to toggle between interfaces all eat away at the workday and add to the frustration level of business workers. In the workplace, documents and data — all of which are associated with individuals — are increasingly the currency of the business user. Both during the creation of information and once it is shared with a larger audience, other individuals often have questions or issues, and productivity increases immensely if these conversations can happen in real time. As email inboxes have become stuffed with a huge array of information, the emails themselves are less and less likely to be read or returned in a timely manner — if ever. Presence increasingly allows business users to jump directly from a document or deliverable into a communications session (voice, IM, or video) with others who are associated with either the deliverable or the content of the deliverable. All the immediate benefits aside, there is a long-term structural benefit for IT departments of all sizes that are struggling with how to serve their customers in a world of fast-changing communications: from landline phones to mobility, from behind the firewall to home office and remote office work styles, from asynchronous to real time, from PSTNs to IP voice, and from hardware centric to software centric. 10 #222262 ©2010 IDC
  11. 11. Figuring out how to have a single view of these "unified communications" is often the single biggest collaboration initiative facing IT organizations. It's easy to see how collaboration tools such as instant messaging, Web conferencing, video conferencing, scheduling, and IP voice all are integrated on a backbone of EIM and presence, but it can be hard to put all the pieces together at one time. For many organizations, implementing an EIM system is the first step in understanding how to build out and support a real-time collaboration system and puts them on a path toward a more comprehensive UC deployment. The combination of cost reduction, user productivity gains, and IT staff efficiency increase makes EIM products such as Microsoft Office Communications Server very compelling for many firms. Copyright Notice External Publication of IDC Information and Data — Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2010 IDC. Reproduction without written permission is completely forbidden. ©2010 IDC #222262 11