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Alternatives to Business Trips Can Pay Off

Here's a look at three main teleconferencing technologies currently in use: Audioconferencing, Web conferencing, and videoconferencing. The costs may be high -- but sometimes less than several business trips across the country.

October 23, 2001
Related Topics: Training Technology, Internet, Intranets/Extranets
Executive recruiter Dick Cotterell doesn't have to board an airplane to meet jobcandidates. He often interviews them by videoconference from his office.

    "You hit a button, dial a number and you're connected. It's very user-friendly,"says Cotterell, president of Management Recruiters International of Salt LakeCity, Utah, a franchise of the Cleveland-based executive recruiting firm. The26-employee company uses videoconferencing eight to 10 times per week.

    The idea of avoiding business travel, especially byplane, appeals to many companies in a time of increased attention to safety.Various forms of teleconferencing offer alternatives to travel, letting employerswith scattered operations and clients run their businesses and help theiremployees feel safe. It doesn't hurt to save a buck, either.

    The surge in teleconferencing caused by last month's terrorist attacks is acceleratingan existing trend toward virtual meetings, experts say. Even before suicidehijackers and overseas bombing became headline news, companies were turningto technology to reduce travel costs such as airplane tickets, hotels, and meals.

    "The No. 1 factor is, 'Can I save money by physically not traveling?'but that's not where the real savings are. The savings are in productivity,"says Andrew H. Nilssen, a senior analyst and partner at Wainhouse Research LLC,of Brookline, Massachusetts, which studies the conferencing market.

A travel alternative -- sometimes
    More than ever, the time and trouble of getting to and flying out of an airportmakes companies rethink the need to travel. "That in-person meeting cancost up to seven times more than an audio call. You can save tons of time andmoney (by teleconferencing)," says Sprint Corp.'s Becky Replogle-Wilkes,director of collaborative applications marketing.

    The key question is: Do I really need to meet this person face-to-face to achievemy goal? Sometimes the answer is yes, as when it's time to meet a sales prospectfor the first time, to conduct a final interview with a job candidate, or tohold an all-day session in one time zone. There's also value in the informaland spontaneous meetings that occur at trade shows and conferences.

    "The human element of sitting around a meal and getting to know someonebetter and brainstorming is still valuable," says Hazel A. Wagner, presidentof B9D Inc., a Barrington, Ill., education-marketing firm.

    That said, there's still an awful lot of business -- staff meetings, projectreviews and training, to name a few -- that can be done without meeting personally.Even small and medium-sizes businesses can afford some type of conferencingthat gives them real-time, almost-like-being-there communication.

    Geoworks Corp., an 85-person company that makes software for wireless services,spent approximately $10,000 to install a videoconferencing system this yearthat allows staff at its Alameda, Calif., headquarters to communicate regularlywith satellite offices in Morganville, New Jersey; the United Kingdom; and Japan.Geoworks also pays about $4,166 in additional monthly fees. Although it hasn'tdocumented exact savings, the payoff in holding effective meetings is clear,says Steve Mitchell, vice president of human resources.

    "It's not cheap compared to a phone call. On the other hand, it's cheaperthan getting on an airplane," he says. Geoworks uses videoconferencingmainly for weekly executive staff meetings and product training sessions. Withoutvideoconferencing, training would entail "cost-prohibitive" meetingsin one location or time-consuming trips by a trainer going from one office toanother, Mitchell says.

    Teleconferencing still spooks some technophobes. But the experts say it's notas hard as it looks. In general, equipment and services have become less expensiveand easier to use during the past several years.

    Here's a look at three main teleconferencing technologies currently in use.They are -- in ascending order of cost and complexity - audioconferencing, Webconferencing, and videoconferencing.

    Audioconferencing connects more than two peopleto a telephone conversation. It's simple: You need only your own phones. It'scheap: 20 cents or more per minute per connection, depending on the provider.Price rises along with the number of connections and the length of the call.Sometimes there's a small setup fee (AT&T charges $15.) You can pay extrato record the call and make it available for dial-in replay.

    Up to 200 or more participants can call in. Callers dial a toll-free numberand a passcode to get into the conversation. It's least expensive to set upthe call yourself (called "host dialing"). Calls involving more than20 people tend to use operator assistance for setup and monitoring. Local andlong-distance phone companies as well as independent conferencing specialistsprovide the service.

    The disadvantage of audioconferencing is that it's voice-only, so you missthe nuances of facial expressions and gestures.

    Web conferencing. This real-time technologyallows thousands of participants simultaneously to hear each other, normallyvia audioconferencing, and to see and share documents on their computers viathe Web.

    "The ability to retain information is higher if you see it," saysNathan Bieck, director of sales at e-Conference Inc., a Boulder, Colorado, conferencingprovider. So Web conferencing is great for presentations, training, and otherinteractive meetings.

    The downside is that people normally can't see each other, and there can beproblems with delayed transmissions and jerky images.

    Even so, Web conferencing is growing fast because it provides at least someof the visuals of videoconferencing without the higher cost. Many offices alreadyhave what they need: two phone lines (or a shared line), one for audio and onefor Internet access, plus a computer with a Web browser. Presenters need a desktopcamera, available for $60 to $100. Users also need at least 56K dial-up Internetaccess; higher-speed connections are preferred for meetings with more intensiveuse of visuals.

    To conference by Web, participants dial a toll-free number and passcode forthe audio portion and log onto a Web site for the video portion. Once online,a leader (or leaders, as presenters can switch off) takes users through themeeting. The slick part is that users can see and alter documents -- PowerPointpresentations, whiteboards, spreadsheets, and more --- in real time. Peoplecan ask questions over the phone or through a Web chat feature.

    PlaceWare Inc., WebEx Communications Inc., and other conferencing specialistssell the service. So do companies including Sprint and Polycom Inc. They alsoprovide technical support and operator assistance.

    There are three pricing models, according to Bieck. Good for new users is aone-time, per-minute/per-connection deal whose total cost depends on the lengthof the call and the number of people connected. Audio may or may not be included.Prices start at about 45 cents per minute. Frequent users can buy a licensefor a certain number of "seats" (computer connections) per month oryear, which costs $100 per seat and up. You can also reserve seats for a one-timeevent lasting an hour or more, but you pay for what you reserve, regardlessof actual participation.

    Videoconferencing is the only technology thatallows two-way, interactive audio and video. The advantage is superior videoquality and the ability to see people's facial expressions and gestures,though there can be problems with blurred images and dropped connections. Thedisadvantage is relatively high cost.

    A good option for occasional users is to hold a videoconference off-site atKinko's, universities, and other semi-public spaces for rent. Kinko's pricesstart at $225 per hour per site and include all equipment and amenities.

    A step above is to get a desktop video system, such as Polycom's $600 ViaVideo,which plugs into a USB port on a personal computer. There's software but noother hardware to install. Participants see and talk to each other through theircomputers.

    If you want a videoconferencing room of your own, you must buy a system thatincludes a camera, monitor, speakers, and peripherals, such as a document camerathat allows application sharing. It's usually all mounted on a portable cart.A low-end, business-class system starts at $4,000.

    In addition, there is the fixed monthly cost of a network connection -- aimfor a 384-Kbps transmission speed. This can be $150 per month and up, dependingon the type of network connection. Also, there's the cost of each call, whichgenerally runs $60 to $75 per hour. These costs may seem high, experts say,but can easily pay for themselves through the avoidance of four or five businesstrips.

GlobalTeleconferencing Market
*Figure does not total 100% due to rounding

Source: Wainhouse Research

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