Multi-Media Collaboration Cost & Business Case
FlatWorldSystems can help make the right choices and execute the strategies.
Collaboration is not easily identified for its benefit or its true loss if not implemented in your business process. If you haven’t had a taste of its benefits so far how will you know what you have missed? If you can’t see this plainly with a little common sense, a bit of research about your business process and a glance at your competitors who at worse, better or at your level then you don’t need to read on.
You are still reading so there may be some glimmer of benefit. Let’s not spend much time on the cost of the infra-structure for multi-media collaboration because most of it you already have in the typical business. You already have internet access or you wouldn’t be here and you likely have PCs with MS Windows at least and they are probably less than 3 years old and are maybe a Celeron or Pentium III or better with USB sockets and a reasonable video card, sound jacks, monitor and network connection. To add collaboration may cost a little extra per month or one time for a software product or service and will range from free to about $150 per user seat per month as a rule.
Cost of resource to use collaboration isn’t likely to be any issue. It’s all about your business process and what it will cost to incorporate the strategy and to train staff as well as encourage its use with you by clients, prospects, allies and vendors.You must include
people costs, opportunity costs, contribution to business bottom line and
expenses. To understand your true cost you must analyze your business and every
aspect that is impacted by collaboration or its lack. This need not be a detailed
analysis. If it takes great detail to see a benefit or problem then the overall
contribution is not likely to have a serious impact. On the other hand, if a
quick series of notes on a piece of paper show significant impact then there is
opportunity and reason to consider change.
As an example let’s look at the traditional steps for a sale for a product or service with a $10,000 price and a gross margin of $5,000 excluding sales costs. Let’s also assume that your sale is via phone, email and fax rather than client visit. The sale has a first contact to gauge initial interest and pass basic information between client and vendor. Time passes while each side digests information and then there is a follow-up to clarify and perhaps arrange for more detailed information to be passed and even an evaluation copy of software. After a time the prospect decides to buy, the deal is done and the product is delivered, installed and used. There may be some training needed which may be self-administered or on-site at a price of course.
Would collaboration have altered the costs significantly? If done well then yes but let’s assume no difference in the costs. What is very likely to be different is that the sales cycle would almost always be shorter, reduce confusion, avoid doubts and lessen the chance that the customer will more diligently explore alternatives and the sale will be lost totally. What would collaboration additionally cost in this process? For a sale of this size and margin it may cost an additional $50 if all else is the same however since time is money too there should be a real savings rather than added cost.
Shaving time out of handling a sale on the other hand or worse,
wasting time on a small sale has huge implications. The business case for any
change in your business process and strategy should
focus on efficiency or time connected to your client for initial prospecting,
information, a sale, support and administration.
Let’s look at some ideas about efficiency or obstruction.
The cost analysis and business case for every business
should be unique. No standard formula exists that fits all. If your business
has problems with its current processes and you are having trouble identifying the
cause then you will have a bigger challenge coming up with a solution. Either
you have to do some serious research and learn about this or get some outside
advice from one or more sources before you can make an intelligent choice.
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