Advertisment

New Toy for Corporates

author-image
DQI Bureau
New Update

Let us look at the geographical spread of a fairly large-sized corporate in
India. It might have its HO in Nariman Point, Mumbai while the sales force is
based in Bandra-Kurla Complex in the same city. Next, assume that the technical
team sits in Koramangla, Bangalore, the call center operations are in Gurgaon
and the R&D centre is in Pune. Add to this two overseas marketing directors
in Denver and London, and a resident consultant in Sydney.

Advertisment

A highly lucrative marketing deal has come the company's way. In order to
clinch the deal, it is essential for personnel from all these business units to
sit together, brainstorm, and formulate a winning strategy. Given the multi-locational
co-ordination required, organizing such a meeting would not only be horrendously
expensive, it would also be a scheduling nightmare, if indeed it were possible
at all. Videoconferencing enters as a viable solution at exactly this point-in
terms of expenses it might not be a drastically cheaper option, but, otherwise,
it would be an excellent productivity enhancing tool. And, if it is a large
organization with a fairly deep pocket, who can sustain a significant capex,
there would be significant RoI too-as measurable cost benefits accruing as
travel, accommodation, and entertainment expenses are significantly reduced.

Benefits galore

While Dataquest in the story Still An Expensive Proposition in the April 15
issue has established that for most Indian companies videoconferencing is still
difficult to afford, there can be no denying that it actually enhances
productivity through a combination of factors.



The scorching speed at which infrastructure is being set up will help us to leapfrog ahead of the US and Europe with legacy infrastructure, to take advantage of conferencing solutions”
Yugal Sharma, country manager, Polycom India
Advertisment

Due to the vast distances and widely dispersed population in this country,
plus many Indian companies now actively participating in the global market, the
videoconferencing endpoint market has grown over the last few years despite it
remaining an expensive proposition for most companies. Barring a handful of
coprates who opt for directly procuring all the equipments, most are today
outsourcing their videoconferencing operations to third-party service providers.
Projecting a CAGR of 30.2%, revenues in this market are expected to grow from
$5.7 mn in 2003 to $8.8 mn in 2005, and eventually to $36.5 mn by 2010.

What makes it tick?

A typical videoconferencing facility consists of many elements. Firstly,
there is the endpoint or the conferencing system, which comes in many types,
depending on its applications. All conferencing systems use CODEC to convert and
compress an analog audio-video signal into digital data and then send it over a
digital line; the decoder reverses the process at the receiving end. All
videoconferencing systems work in a full-duplex mode and one can use a choice of
networks for conducting videoconferencing over WAN, such as ISDN lines or
satellite-based leased lines. It is perfectly possible to use bandwidth of 128
Kbps for a good quality conference. However, data rates of 384 Kbps may be
needed for near-TV-quality video. Add to this display options like projectors,
plasma displays or even TVs and other value additions like good lighting,
control touch panel, and a single console control. Incidentally, Polycom and
Tandberg are the leading videoconferencing vendors while others like Sony,
Godrej & Boyce also operate in the market. Add to this service providers
like Webex and Genesis IT Innovations that offer products from all vendors.

Yugal Sharma, country manager, Polycom India feels that a noticeable trend
for increase in videoconferencing solutions market is the availability of
bandwidth and setting up of infrastructure to meet the growing communication
needs of India. The scorching speed at which infrastructure is being set up has
been unprecedented. This will enable us, Sharma believes, unlike many of our
neighbors, to leapfrog ahead of the US and Europe with legacy infrastructure, to
take greater advantage of conferencing solutions. Data collaboration standards
allow participants to display live PC content to other participants as the
conference progresses. This means everyone can view and work off the same
presentation, spreadsheet, or any other image or document, while still being
able to see all participants in the video call.

Advertisment
Videoconferencing Cost Reduction-A Myth?

While the Dataquest story Still An Expensive Proposition in the April 15 issue categorically proved that videoconferencing is an expensive proposition for most Indian corporates, since you need to provision about Rs 18 lakhs in case you want to purchase all the equipment and want no compromise on quality of the session, while outsourcing costs close to Rs 4 lakhs. However, on the global front, videoconferencing has proved to be an economically viable option, raising the hope that this would be the scenario in India too one day.

In the international context, a study conducted by Worldcom, way back in 1998, indicates that the total savings achieved by converting a business travel meeting into a videoconference is more than $2,130 a month. Taking the optimal escalation of 10% per year in the hard costs (flights, hotel, car service, food) and the soft costs (cost of saved employee time) the total saving can be estimated to be $3,120, which is equivalent to about Rs 1.3 lakhs. This figure, multiplied by the number of employees who need to travel, generates a quantum of cost saving that is hard to ignore. Also, this survey estimates that an employee who converts 50% of business travel meetings to videoconferencing can gain an additional 20% effective work time.

One logical evolution in videoconferencing has been the adoption of
multipoint videoconferencing. With a Multipoint Conference Server (MCS), up to
five sites can conference with each other simultaneously in a 'Continuous
Presence' mode, where each site sees the remaining four sites in different
quadrants of the display monitor.

Who are the takers?

Most corporate boardrooms as well as NOCs and BPO companies are today
extensively using videoconferencing solutions. Even Defence Research Labs and
the education sector are adopting these solutions for their distance learning
programs. Plasma screens are extensively used in monitoring workplaces, training
and for in-house communications in BPOs. Monitoring of each employee is made
possible through plasma screens wired to individual computers and often mounted
on top of a workroom seating nearly 100 agents. Interestingly, telejustice and
telemedicine are two domains to have witnessed extensive adoption of
videoconferencing. A unique application of videconferencing is operational at
Courts in the state of Andhra Pradesh. Here, videoconference links are provided
between jails and courts, a measure that helps 'produce' undertrials before
magistrates without their physical presence. The video linkage facility between
the Chanchalguda central jail, which has more than 1,600 undertrials, and the
Nampally City Criminal Courts here has been provided by Stan Power Technologies.

Advertisment
The Drivers

- Greater availability of IP broadband services

- Expected migration from ISDN to IP networks 

- Increasing availability of broadband networks

- Decline in average price of video-conferencing endpoints 

- Fast RoI due to decrease in expensive travel-related costs

The average price of videoconferencing endpoints is declining slightly, which
will help to boost adoption; though group conferencing systems are expected to
outsell desktop systems in the foreseeable future. Organizations, at least the
bigger ones, are consistently reporting a fast RoI as the number of conferencing
meetings increases, decreasing expensive travel-related costs.

Rajneesh De in
Mumbai

Advertisment