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Getting to the meeting - without the journey

July 6, 2008 | Chris Payatagool
silicon_logo.jpgTelepresence has travelled a long way...

By Stewart Baines

Costs, delays and green issues are all conspiring against business travel. Those factors are also coinciding with the growth of the very tech that could spare you a journey, says Stewart Baines.

Would you rather sweat in a traffic jam, anxious about running late for a meeting with your boss, or sit in a comfortable, air-conditioned room with mood lighting talking to the big cheese without the motorway misery?

Anyone who has experienced telepresence will tell you it's a no-brainer. Telepresence is a breakthrough in videoconferencing technology that provides a genuine alternative to travel and won't crease your suit.

Videoconferencing technology has progressed so rapidly in the past two or three years and has coincided with major pressures on companies to look at alternatives to executive travel.

Oil prices drive up transport costs whether on planes or roads. Investors and consumers are demanding reductions in carbon footprints and employees are asking for more time with their family and less spent in transit.

There are also greater pressures than ever on companies to make decisions today rather than tomorrow, and squeeze every bit of productivity they can out of the working week.

Telepresence may be expensive and have significant compatibility issues but already larger companies are adopting it in droves such as AMD, AIG, British American Tobacco and Proctor & Gamble.

When you consider UK companies alone spend $50bn per year on business travel, according to the World Travel & Tourism Council, anything to get their executives out of the air and into an Aeron chair is a good thing.

Blue chip converts

Consulting giant Accenture has become a keen adopter of telepresence technology. After holding its 2007 annual IT steering committee meeting in three telepresence room at Cisco sites in Chicago, London and Washington, the IT consultants recognised it needed its own rooms.

The steering committee features the country COOs, so pretty senior people. Accenture CIO Frank Modruson says that for the first 15 minutes, people were fascinated by the technology. "It brings out the kid in you," he says. "But soon the technology falls away into the background and you don't notice it any more."

Accenture initially installed telepresence rooms in Chicago and Frankfurt. Despite low utilisation, the company persevered and installed it in a further 11 sites.

Usage rose dramatically and levelled off in April when it became harder to schedule meetings in the few slots left available. The monthly average is now between 600 and 900 hours of telepresence meetings, with 100 hours between London and Chicago alone.

According to Modruson, telepresence is saving Accenture $1m per month in travel, which is four to five times the operational cost of the sites. In terms of travel avoidance, in May this amounted to 240 international and 120 domestic flights avoided.

"If you look at the cost of business class travel and hotels these days, these are some considerable savings made by not having to travel," says Modruson.

"And it doesn't account for the lost time waiting in the airport for late flights. And when they arrive at their destination, there is jet lag and they may not be top of their game."

Even if you can put a cost on jet lag, it is even hard to put a value on decision making, which gets a boost, reckons Modruson. "You can assemble a group much faster. If you really needed important people together tomorrow, you can make it happen," he says.

Another 22 sites are planned, including four sites in India. "It can be such a challenge travelling to India that we can justify the sites on domestic travel business case," says Modruson. "Other countries are also now starting to ask for another three or four rooms too."

Road avoidance

Detractors of telepresence - and they are usually those who cannot afford it and believe vendors' margins are too fat - say you need to have significant travel costs before telepresence is justifiable, and that usually means substituting air travel.

If you ignore the intangible benefits, and there are many, you can still build a business case for telepresence replacing domestic travel.

One of Easynet's first customers of its managed telepresence service - and it won't name names - justifies deploying telepresence based on executive travel between UK offices.

"You can do some work in airports these days but when you're stuck in a jam on the motorway, you are completely unproductive," says Matt Taylor, Easynet senior business development manager. Easynet's parent, BSkyB, is another fan, using telepresence to reduce executives' journeys between Dunfermline and Osterley.

Needless to say, Easynet is eating its own dog food, so to speak. It has telepresence rooms in Brussels, Hamburg, London and Paris is considering expanding this because it has been so successful.

Taylor says: "In February to April this year we had a 35 per cent drop in travel costs between Paris and London without pushing people to use it."

"I am a seasoned traveller and already telepresence has made a real difference to me. We're having meetings now that wouldn't have taken place at all before."

Utilisation rates have been high. In one week, it is exceeding 40 hours in a single location. According to Taylor, Easynet holds everything from job interviews to senior management meetings in the 10-person Polycom conferencing rooms.

"It's been a victim of its own success. You have to book weeks ahead for non-essential meetings," adds Taylor. The goal is deploy smaller units - four-person rooms - in the same locations. These will be less expensive so that one-to-one meetings can still be justified financially.

Figures stack up

Cisco is another on the Pedigree Chum. Wainhouse Research estimated that between October 2006 and September 2007 Cisco spent £25m on the technology and networking costs for 161 internal telepresence rooms.

It had 31,381 telepresence meetings worldwide in this period, 6,643 of which were in lieu of travelling. This avoided 15,000 tonnes of CO2 emissions. Sales improved, employees were more productive and with other benefits thrown in, telepresence contributed a net benefit of Euro 120m.

The problem is that for many companies, telepresence remains eye-wateringly expensive, with systems varying from Euro 50,000 to Euro 150,000 for boardrooms, depending on whether the vendor is Cisco, HP, Polycom, Teliris or Tandberg.

Factor in up to Euro 5,000 bandwidth costs per site per month, and you can see how having a hard-and-fast business case is critical if it's to get the sign-off from the CFO.

But these costs will undoubtedly fall, and interconnection with telepresence systems from other vendors will come. Last year Frost & Sullivan estimated that by 2013, the global telepresence market will be worth in excess of $400m. If used properly, the technology will save many times that in travel savings.


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