Cost Savings, not Productivity, Driving New PurchasesCost Savings, not Productivity, Driving New Purchases

White collar productivity is difficult to measure in terms of cost savings, whereas reducing trunk circuits is an easily measurable cost savings.

If you read Blair Pleasant's recent post on the Mitel Forum in Las Vegas you know that the customer panel at the industry analyst meeting was one of the highlights of the gathering. Not surprisingly each of the customer panelists agreed that new system and/or application purchases must contribute to reduction of existing communications and/or general administrative overhead expenses within their enterprise operation. The one relatively recent enterprise communications capability that was cited as a potentially significant cost savings purchase/installation is SIP trunking for reducing overall trunk circuit requirements. Personal productivity gains, such as those attributable to some UC features and functions, are a hard selling point during these perilous economic times. For clarification I don't consider an audio conferencing bridge by itself to be a UC product, but do consider web conferencing part and parcel an element of UC.White collar productivity is difficult to measure in terms of cost savings, whereas reducing trunk circuits is an easily measurable cost savings. I particularly enjoyed hearing one of the panelists say that saving a few seconds to perform a click-to-dial a telephone number was meaningless regarding cost savings, no matter how often it was performed. CFOs today are looking at hard numbers, not potential cost savings due to potential time savings. Productivity gains and associated time savings may help drive sales when financial times are better, but not today for most customers.

On another note, like Blair I, too, enjoyed my brief stay in Las Vegas at the Red Rock Hotel, not only due to the fact I left with more money than I arrived with. Mitel did an excellent job organizing their annual conference and did not waste the time of the attending analysts. Yes the hotel rooms were nice and the food very good, but the executive presentations contained meat and were not just pretty to look at. For a privately held company Mitel was generous in discussing its financials (they are profitable) and were very candid about the company's position in the industry. As a long time competitive analyst I enjoyed the part of the presentation given by Paul Butcher, President/COO, where he poked some fun at the current Nortel situation involving potential buyers Avaya and Siemens. Mitel, whose acquisition and merger of Inter-Tel went very smoothly, must be enjoying itself while its Canadian rival is self-destructing.White collar productivity is difficult to measure in terms of cost savings, whereas reducing trunk circuits is an easily measurable cost savings.