Companies Scale Back UC Implementations

There's been a flurry of news lately about unified communications (UC) indicating that the integrated approach was becoming a critical part of many companies' customer service strategies -- by one measure, 65 percent of enterprises are engaged in a UC initiative. It turns out, however, that the UC trend is no more immune to a down economy than other technology initiatives, according to new research from Parsippany, N.J.–based analyst and consulting firm T3i Group. According to T3i's findings, approximately one-quarter of UC-enabled enterprises have reduced their spending on the technology in 2008.

According to Terry White, senior program director at T3i Group and author of the study "InfoTrack for Unified Communications: 2008 Enterprise Market Analysis," the shift is undeniable. "We're seeing a clear cutback in terms of Internet Protocol Telephony (IPT) implementations as well as UC applications as a result of the economy," he declares.

The recent crisis in the financial markets, White says, seems to have reversed a trend toward expansion in UC investments. "The [situation] seems to have gotten more severe compared to [earlier in the year]," he says. "We had been seeing constant growth in IP telephony and in the applications space, but there is some uncertainty as to where companies want to put their money right now."

According to the study, 6 percent of respondents have put IPT plans on hold, while 18 percent report a "major reduction" in implementation plans. The results are similar for UC, as 7 percent have put deployment plans on hold and 16 percent have drastically scaled back their intentions.

The study delineates three stages of UC deployments:

  • system-centric—implementing IP Telephony based on hard savings and focusing on attributes such as reliability and security;
  • application-centric—bringing in UC applications focusing on business value derived from productivity savings; and
  • process-centric—implementing UC based on business process improvement through communications-enabled business processes.

Of the companies surveyed, White says the majority of those holding off on UC were still in the planning stage. "Most [companies] that are already implementing UC said that they were going to continue without any major change in their plans," he says. "For those who haven't gotten started, they are rethinking whether they want to start now or just continue with [current technology]."

Acting as a thin silver lining, results did show that companies were cutting back on UC now but plan to boost investments again by 2012. According to the study, enterprises expected equal or higher attach rates -- percentage of IPT shipments including a specific UC application -- in 2012 for six out of the eight UC applications the study examined, including:

  • desktop videoconferencing;
  • IP contact centers;
  • real-time audio conferencing;
  • UC client;
  • unified messaging; and
  • Web conferencing.

White was quick to note, however, that the expected rebound by 2012 is dependent on improved financial circumstances. "Companies are betting the economy will come back," he says.

White advises UC vendors to go on the offensive with current and prospective clientele. "The opportunity is here for [solution providers] to take their case to customers," he says. " 'Some of these applications actually work to your advantage during tough economic times.' Enterprises believe in the idea of UC, but when you ask if they're actually doing it, many say no. They're waiting for vendors or early adopters in their industry to prove [these applications] work first, and then show them where the best opportunities are."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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