UC Business Case Provides Much-Needed SecurityUC Business Case Provides Much-Needed Security

Building a business case involves significant planning, resources, and time, usually more time than IT staffs realize. But it's time well-spent if you can make a solid case, when the budget axe comes down, to spare your project.

As you start or forge ahead with your unified-communications strategies, one of the least-favorite items on your checklists most likely is building a business case.

Why? It's much more enjoyable--and comfortable--to craft the technology strategy. After all, that's what IT folks are trained to do. And most don't particularly long to leave their comfort zones.

But taking that detour is one of the most important things you can do. Even though nearly 80% of IT professionals say a business case is necessary for IT expenditures, many acknowledge they don't spend the amount of time they should on them. Business cases achieve several benefits for the organization, including the following:

1.) They force IT to examine the business benefits of a technology rollout. In doing so, UC staffs engage business unit leaders and get their buy-in for the project.

2.) They provide the UC team with job security. In 2009, Nemertes asked 200 IT professionals what projects were canceled or postponed because of the recession. UC projects were No. 1 on the list, and there was a strong correlation among those whose projects were canceled and those who did not build a business case. Simply put: Compelling business cases protect your UC project during an economic downturn or during budget cuts for other reasons.

3.) They demonstrate soft-dollar and hard-dollar savings. With these specific figures, IT staffs can document success once the specific part of the UC initiative is complete.

4.) They uncover savings that may have otherwise gone unnoticed. Often, IT staffs don’t know their actual capital and operational costs associated with the current state. By uncovering those costs, they often find the savings are greater than they realized.

5.) They give you the data you need to document success later. A business case is half-truth, half speculation. You can document the actual costs of today’s technology because you’re actually using it now. But the future costs of the new technology are somewhat speculative. Once you have fully deployed the new technology, you can compare actual old costs with actual new costs--and hopefully document financial success.

Building a business case involves significant planning, resources, and time--usually more time than IT staffs realize. But again, it's time well-spent if you can make a solid case when the budget axe comes down to spare your project.

Typically, executives demand a 12-month payback on most new projects. By evaluating various components of UC as part of the business case, you can prioritize which applications you’ll roll out first to make the business case.

For example, many companies start with IP telephony and audio-conferencing. They are able to show a fast ROI if they had been paying third parties to handle TDM moves, adds, and changes. And, when high-volume audio-conferencing customers bring that function in-house, that shows quick ROI, as well.

In other cases, companies start with video conferencing, making a strong case by reducing travel costs. (And smart leaders don’t just say they’re going to reduce travel costs; instead, they proactively reduce travel costs by the appropriate amount to justify the video rollout costs.)

Solid UC business cases address several areas, including:

* Return on Investment: At what point (typically measured in months) will the savings from the new technology cover the costs of buying, implementing, and operating it?

* Total Cost of Ownership: What is the all-inclusive cost to use this particular technology over a pre-established period of time? This includes capital, implementation, and operational costs.

* Net Present Value: This figure, generally a must for the CFO, measures today's value of an investment's future net cash flows, minus the initial investment. Basically, this calculation shows using the time value of money to evaluate long-term projects.

* Soft-Dollar Savings: Though these do not solely make or break a project (in most cases) they can be just enough to push them over the edge. For example, pointing out that IP telephony will enable call transfer and intercom between locations may be a good feature for a distributed company. Or, fewer days on the road may be a huge reason for executives to select telepresence.

* Associated Costs: Rather than overlooking or intentionally ignoring extra costs associated with the project, it’s better to get them into the cost model right away. Most commonly, we see some key areas missing from the business case, including network upgrades, management and monitoring tools, training , and security costs.

The next several columns will address more specifics on building a business case for VOIP and UC, including actual cost figures and recommendations on how to go about building a compelling, iron-clad business case.