After the acquisition, company managers were flying between the two cities on a regular basis, first to merge operations, then to oversee staff. But all those plane trips were taking time and money. Direct flights between Minneapolis and Windsor cost so much that the company had people take cheaper flights that went through Chicago, making a one-way trip that could have taken less than 90 minutes last the better part of a day.
It wasn’t long before upper management realized something had to change. The company was upgrading its existing telecommunications equipment anyway, so executives used the opportunity to outfit two conference rooms in Minneapolis and one in Windsor with a high-end videoconferencing system that would allow people to hold meetings without leaving the office.
Today, Wireless Ronin’s staff spends at least eight hours a week on videoconference calls, interacting with one another over large-scale, wall-mounted high-definition video screens. The setup has helped cut travel expenses, though the company is still calculating exactly how much it is saving. Just as important, videoconferencing is helping employees at the two locations get to know one another better. "It’s so nice to put names and faces together," says Linda Hofflander, chief marketing officer. "You feel so much more like a team."
With costs for airplane tickets and gasoline still sky high, more companies are following Wireless Ronin’s lead and grounding employees in favor of alternatives such as online meetings, webinars and videoconferences.
The timing couldn’t be better. High-definition video, webcams, Voice over Internet Protocol systems, faster Web connections and other innovations have put today’s online meetings and videoconference services miles ahead of what was available only a few years ago.
"When you have equipment that makes it look like someone is sitting at the end of the table, you quickly forget they’re not really in the room," says Brett Shockley, CEO of Spanlink Communications, the Minneapolis telecommunications reseller that worked with Wireless Ronin.
Interest in videoconferencing and online meetings is also picking up as companies look for more Earth-friendly, energy-conscious ways to do business, and as their employees become accustomed to using social networks, instant messaging and other alternatives to working face to face.
"It’s a no-brainer," says Jim Gast, an online meeting industry veteran and vice president at Cordys, a business process management services firm in San Jose, California, that resells online meeting systems.
Just how mainstream has videoconferencing become? Citrix’s GotoMeeting.com service for small businesses buys ad time on the Dr. Laura call-in radio show. FedEx Office, formerly known as FedEx Kinko’s, has videoconferencing facilities in 122 of its locations. To gain a toehold in the business, tech heavy hitters have snapped up smaller online meeting and videoconference services providers. That group includes Cisco, which paid $3.2 billion to buy WebEx in 2007, and Adobe, which has built its webconferencing business around products acquired when it bought Macromedia in 2005.
There’s no question businesses are looking at alternatives to the expense and hassle of air travel. Forty-two percent of 610 business travel and corporate travel directors responding to a June survey from Business Traveler magazine said they were considering videoconferencing in lieu of travel.
Something for everyone
The trend hasn’t been lost on videoconferencing vendors, who are playing up the cost-saving aspects of their technology in ad campaigns and other marketing efforts.
They’ve finally got something worth promoting. Modern online meeting and videoconferencing systems are a far cry from the technology of a decade ago, when clunky hardware and lack of broadband Internet connections made the services unreliable and slow.
That has all changed because of myriad technological improvements.
Prices, too, have changed. So many options are available that a company could pay nothing for a Web-based virtual meeting room for up to 20 people or spend hundreds of thousands of dollars on fully tricked-out "telepresence" room with a wall of HD-quality video screens that could give an Imax theater a run for its money. Videoconference systems similar to the one that Wireless Ronin is using can cost around $10,000, depending on how many high-resolution screens are installed and whether it’s hooked up to a dedicated computer server and network connection, Spanlink’s Shockley says.
Thermo Fisher Scientific, a $10 billion manufacturer of scientific instruments, took a middle road in adopting webconferencing technology. The Waltham, Massachusetts-based company sells equipment that scientists use to analyze chemicals. The complex machines can cost up to $1 million each. Thermo Fisher Scientific once flew engineers and technical support staff all over the world to install instruments or help customers with problems. Then, four years ago, Dudley Torres, a company chemist turned Web designer and developer, accidently happened upon a conference for Macromedia Breeze, the online meeting software that subsequently became the basis for Adobe’s current virtual meeting application, Connect Pro.
Torres immediately realized that using the software to remotely troubleshoot Thermo Fisher Scientific’s instruments could save time and travel expenses. Torres, who worked at the company’s San Jose, California, facility, persuaded managers there to spend $70,000 for a year of a hosted service. That first year, 20 people used it. Things went so well that a year later, Torres got permission to spend $75,000 on software that could run on a dedicated computer server inside the company.
Since then, the number of Thermo Fisher Scientific employees who use the Adobe Connect Pro service is up to 1,600, including R&D, training, tech support, sales and marketing staff. It has become so common that "it’s like Microsoft Outlook in the company," Torres says. "If people want a meeting, they don’t arrange to travel; they go to Adobe Connect."
Although Thermo Fisher Scientific uses other webconferencing applications, Torres says officials are considering making Adobe Connect a corporate-wide standard throughout its 30,000-person workforce.
Although more employees are using webconferencing, it hasn’t been determined exactly how much travel expenses have dropped because of it, Torres says. On a personal level, Torres has reduced the number of days he works in the office because of it.
"I travel about a half-hour to the office, so by not coming in it saves me a lot of money," he says. "Before I come in, the first thing I ask myself is, ‘Can I do this on webconferencing?’ "
Using their own equipment
Inevitably, some of the biggest advocates for using online meeting and videoconferencing tools to save on travel costs are the companies that sell them.
Cisco, which sells "telepresence rooms" that cost anywhere from $30,000 to $300,000 to install and operate, uses 259 of the installations in various locations worldwide. The rooms are so popular that each one is booked an average of five hours a day, says Erica Schroeder, Cisco’s telepresence marketing director. According to Schroeder, the technology has saved Cisco $100 million to $220 million in travel costs since its December 2006 debut. Cisco has saved another $50 million to $100 million in productivity that otherwise would have been lost while employees sat in traffic or waited for planes, Schroeder says.
At the other end of the spectrum is DimDim, a Web-based online meeting application with three tiers of service, including a free version that can accommodate as many as 20 people in one virtual meeting room. The service is built on open-source software, which lets customers change the software to suit their needs.
When DimDim introduced upgraded software in early August, chief executive DD Ganguly used it to make eight industry analyst briefings in two days.
"They could see me, hear me, see my PowerPoint slides and chat amongst themselves," all over the Web, Ganguly says. "If I were traveling and doing those face to face, it would have taken at least eight days."
Spanlink, the Minneapolis telecommunications reseller that installed Wireless Ronin’s videoconferencing system, uses the same equipment internally. As a result, the approximately one-third of its 150 employees who live and work elsewhere can easily connect with their counterparts at the company’s headquarters.
"We can hire people wherever they are and let them be a tight part of the company," says CEO Shockley.
Even employees who work at Spanlink’s headquarters use it to telecommute a couple days a week. By saving six to eight hours of driving a week, "We’re seeing that it helps in recruiting, that people like the fact that they can have more flexible schedules," Shockley says.
Back at Wireless Ronin, employees have been using the videoconference system for about a month and have gotten pretty comfortable with the technology, says Hofflander, the chief marketing officer.
In addition to managers who use it to run divisions that are split between Minneapolis and Windsor, the company’s social activities committee is using the system to coordinate potlucks and other extracurricular activities between locations. Executives have also used it for quarterly earnings calls.
People have become so comfortable with the system that the company had to hang some of its digital signs outside the videoconference rooms’ doors to remind them when their meeting times are up.
"There’s something about being on video," Hofflander says. "It’s fun to be able to see people."