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May 27, 2010
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
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
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
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
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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.
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.
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
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
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.
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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
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
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
Multiparty instant messaging
Peer-to-peer audio/video capabilities
Desktop, Web, and mobile clients
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%.
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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
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
Business Value of Presence and Enterprise IM
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
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
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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.
Average Annual Benefits of Microsoft OCS Presence and IM
Solution per 100 Users
IT staff efficiency
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.
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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
The total value of increased user productivity equals $28,775 in annual savings per productivity equals
100 users. $28,775 per 100
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
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.
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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).
Three-Year Investment in Microsoft OCS EIM per 100 Users
Initial Year 1 Year 2 Year 3
Annual IT support
Installation (IT staff)
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.
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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).
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
Benefit, Investment, and Cash Flow per 100 Users
60,000 55,637 56,194
20,000 5,886 5,886 5,886
Initial Year 1 Year 2 Year 3
Cumulative cash flow
Source: IDC, February 2010
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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
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.
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
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
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
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
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.
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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.
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