Telecommunication Business

Telecommunication Business

Posts 1-1 of 1
  • Davide Petramala
    Davide Petramala
    The company name is only visible to registered members.
    Return on Unified Messaging
    Key elements to look at beyond the obvious productivity gains of single access and management of all your messaging from your email or smart phone. Not only will it drive productivity and increase customer satisfaction but you can quickly calculate your return on the investment to make it happen.

    Determining Payback Horizon

    Your payback horizon, meaning the point at which your business begins to see a profit from using unified messaging, is easy to calculate. By annualizing your savings, you can come up with a clear monthly average. Each month, subtract the monthly savings from your initial investment costs.

    For example, Company A invests $100,000 in unified messaging. Their use of unified messaging saves them $10,000 per month. If you subtract $10,000 from the initial investment amount every month, in ten months the investment will be fully paid off and the company begins to see a return.

    Calculating the ROI

    A positive ROI occurs when reduced costs, coupled with increased revenue, exceed the cost of implementation. The formula for calculating a company’s ROI is:
    ROI = [(Revenue-Investment)/Investment]*100

    At the start of any initiative ROI will be -100% because you will not have earned any revenue or savings from using unified messaging. On your payback horizon, your ROI will be 0% where return equals the investment you put in. Once your profit begins to exceed your investment, you will begin seeing a positive return on your investment and your ROI ratio will continue to grow along with your revenue.

    Calculating the revenue gain from UM becomes the challenge as hard dollar allocation based on the technology can be very subjective.

    The typical way that user productivity gets translated into ROI is by estimating the time saved through the use of unified messaging, multiplying that by a salary cost, and then extrapolating that to the entire population.

    Take the scenario of a professional-services firm that bids on 75 projects a year and has a typical close rate of 75%, for an annual revenue stream of $8,437,500. If the firm is able to apply unified messaging to 1% in additional business in a year, the tangible benefit is $112,500. This benefit increases rapidly as close rates improve, with a 5% increase in close rates providing a benefit of $562,500.

    The Key question is if you invest in unified messaging can it speed up your business process, leading to tangible benefits such as increased sales or higher customer retention/satisfaction rates. Examples of how one can determine an ROI around the Unified messaging investment include:

    ● Cost avoidance – using IM /email rather than a toll call
    ● Revenue gains – additional sales (more time to sell, better productivity)
    ● Revenue acceleration – Completing sales more quickly
    ● Intangible benefits - increased customer satisfaction and loyalty, happier employees, employees work from any location
    ● Productivity gains – accelerated business processes
    ● Efficiency gains – improved business processes
    • 28 Mar 2011, 10:15 pm