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3 Steps to Understanding the Cost Saving Benefits of Microsoft Lync

Curtis Johnstone HeadshotGuest blog by Curtis Johnstone, Unified Communication (UC) product architect with Dell Software and a Microsoft Lync MVP

As organizations realize the promised benefits of better collaboration and more efficient communications from their Unified Communication (UC) solution, the cost saving benefits are drawing more attention. UC solutions such as Microsoft Lync are being deployed to reduce travel costs, reduce existing telephony and web conferencing costs, and even reduce physical office space costs as remote workers are first class citizens and capable of effectively working from anywhere.

A recent survey commissioned by Dimensional Research on Lync Adoption and Challenges confirms that for organizations that have adopted Microsoft Lync:
• 80% hoped to save on their travel budgets
• 76% hoped to reduce costs of other web and teleconferencing tools
• 66% hoped to reduce meeting room space costs
• 55% hoped to reduce spending on traditional telephony costs (e.g. desk phones)
• 36% hoped to reduce email expenses

Despite these intentions the survey also revealed that over half of organizations did not know they were successful in achieving any of these desired outcomes!

Getting insight into how much cost savings a UC solution brings to the table is difficult. The dimensional research survey confirmed that close to 70% of companies that have adopted Lync cannot easily report on savings.

The primary challenge in determining UC cost savings are establishing comparable cost metrics for existing non-UC costs such as telephony, travel, and meeting rooms. This is difficult because:

  1. Existing non-UC costs are usually lumped together with other costs and not sufficiently granular to be used in a cost comparison scenario. For example, costs for meeting rooms are lumped in with greater property costs and are not tracked by per employee or per department to compare to similar Lync conferencing usage costs.
  2. Existing non-UC costs are usually only available for a pre-determined business segment and time-frame (e.g. “the travel expenses for Q1 for the Sales department”).
  3. Many existing non-UC costs are driven by employee behavior and quantifying a change in behavior is not an exact science. For example, assessing email platform savings after the introduction of a UC solution required insight into specific email platform usage and costs.

Despite these challenges it is possible to gain an understanding of cost savings – at least an approximation, which is very valuable in understanding the competitive edge a UC solution brings to the business.
This article discusses a high level 3-step approach to gauge how much a UC solution such as Microsoft Lync is saving money for your organization. The focus will be comparing on-going usage costs instead of initial capital deployment costs. Capital costs for deploying a UC solution need to be considered as well, but are typically driven by budgets and become less significant from a cost savings perspective over the life-time of a UC solution.

Step 1: Measure
An important first step to understand on-going UC costs is being able to quantify how much your UC solution is being used. Not having any usage statistics is akin to trying to calculate fuel efficiency without the car mileage.For an on-premises Microsoft Lync deployment this base requirement equates to knowing feature usage and summary amounts broken down into business segments that make sense for your company and by a variety of time-frames (i.e. 1 week, 1 month, 3 months, 1 year). For a UC solution being consumed in the cloud, such as Lync Online, on-going subscription costs can be used, but usage will typically still provide a better yardstick for cost comparisons.

Microsoft Lync Server 2013 natively includes a Monitoring service, which provides the ability to collect and store Call Detail Records (CDR’s). Enabling this feature will configure Lync to record Lync usage across the entire media stack including peer-to-peer calls and all types of conferencing for all users.

The bigger challenge is making sense of all CDR information captured in the database. As you will see in the next step, being able to report on how much a feature was used by a user, department, or office with absolute and summary counts over different time-frames is a necessary perquisite to quantify and compare UC costs. Microsoft Lync ships with some native reports (see Microsoft Technet - Using Monitoring Reports), which provide basic shorter-term usage metrics. More in-depth usage reporting and analysis that are integrated with Active Directory to better understand usage and costs across your business segments are available from several third parties. A list of qualified Microsoft Lync Billing & Reporting solutions is available here.

Step 2: Determine Microsoft Lync Costs
On-going usage costs for Microsoft Lync must be known – or even approximated - to compare against existing non-UC costs. For example, if Company XYZ spent $200,000 last year on a non-UC audio conferencing solution, we need an approximate cost for Microsoft Lync conference usage where the audio and dial-in features were used.
With access to the usage metrics discussed in the previous step, costs per Lync feature usage such as the per minute cost of a Lync audio conference can be assigned, and total costs can then be calculated and viewed for comparison purposes.

Companies often struggle assigning an initial usage costs (aka charge) for a Lync feature because it is a nebulous combination of costs such as bandwidth, licensing, and IT staff. A good start is to assign a ballpark cost based on the high-level on-going Lync costs such as the variable costs I just mentioned, and then fine-tune it. Although this approach can initially feel like a shot-in-the-dark, seeing the summary cost numbers with these first-cut estimates is insightful and often leads to quick refinement and a better reflection of true cost.

Here is an example of a chargeback input screen used in a Microsoft Lync reporting and chargeback third party solution, which allows companies to assign a cost per Lync feature usage:

Dell Screen Shot 1

These internal chargeback rates are then applied to the usage metrics to produce total cost reports (across user, department, office, and for several configurable time-frames).

Step 3: Compare Apples-to-Apples
The third and often most difficult challenge to gauging UC cost savings are being able to do an apples-to-apples comparison with existing non-UC cost reports. Although traditional existing cost reports such as travel expenses are available in various data sources throughout the organization, they are typically hard-coded for a particular segment of the business (e.g. user or business unit) and only available in summary form for a specific different time-frame (e.g. per quarter or last year).
Comparing these costs then requires that our corresponding Lync cost reports are available for the same time-frame (e.g. “1 year”), for the same business segment (e.g. “sales department”), and for a Lync feature that is similar to what is being compared to in the existing non-UC report (e.g. “Lync web conferencing” versus “airfare and lodging costs”).

Here is a sample chargeback report showing the cost of Microsoft Lync Audio/Video Conferencing usage in the last quarter for the Sales department in a fictitious company using assigned rates for per minute usage:

Dell Screen Shot 2

Cost savings that are dependent on user behavior, such as a reduction in email usage, are harder to quantify. Again, even an approximation can provide valuable insight. Many companies have reporting tools for each collaboration platform. Simply trending and comparing the usage change before and after UC features are adopted provide a good yardstick for measuring cost savings in this area. Microsoft Lync reporting solutions that provide reporting on other platform usage (e.g. email) as well as Lync usage make this challenge easier.

Summary
Assessing the cost savings of a Unified Communications solution such as Microsoft Lync is a complex endeavor given the nature of the problem. An apples-to-apples comparison is challenging given the variability of existing non-UC costs and the absence of existing Microsoft Lync usage costs.

Measuring existing Lync usage, assigning a cost to it that makes sense for your business, and having access to the corresponding aggregate costs with the same parameters that existing no-UC costs are available is a huge step in understanding whether your UC solution is meeting the desired UC expectations.

How does your organization measure cost savings from your UC solution?

Continue the conversation with Curtis via Twitter @InsideLync

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