Significant ROI

 
 
By Nathan Eddy  |  Posted 2009-02-24
 
 
 

Study: SMBs Not Addressing Communication Challenges


A report by SIS International Research sponsored by Siemens Enterprise Communications found communications barriers and latencies can cost small and medium businesses up to 40 percent of their productive time.

On average, 70 percent of employee respondents with up to 400 employees said they spend 17.5 hours each week addressing the pain points caused by communications barriers and latencies. The study found the top five pain points for SMBs to be inefficient coordination, waiting for information, unwanted communications, customer complaints and barriers to communication.

"The idea behind the study was to better understand the SMB pain points around communications," said Siemens' vice president of SMB product management Rudolf Hamann. "We found the impact on SMBs is huge."

The study surveyed a total of 513 knowledge workers in Brazil, France, Germany, India, Italy, Russia, United States, and United Kingdom. The knowledge workers also represented eight key vertical industries: communications, finance, health care, insurance, manufacturing, professional business services, real estate, and wholesale or retail trade.

The study discovered the top five pain points, though ranked differently, were the same among SMBs and enterprise-level companies. Another finding of the study is that SMB employees are highly mobile, with more than 50 percent identifying themselves as mobile workers, either traveling outside the office, roaming inside the office or working from home some or all of the time. Overall, SMBs placed a high or very high priority on improving communications for mobile workers.

The hidden costs of the pain points could translate into $26,041 per knowledge worker per year, and up to $5,246 per employee per year, which means that in theory, a 100-employee SMB could have up to nearly $525,000 in annual hidden costs. "It's a huge number," said Hamann. "Honestly it did surprise us."

The researchers also confirmed that SMBs are increasingly using various communications technologies, including phone, instant messaging and video conferencing, in an effort to increase productivity. However, they found that the proliferation of these technologies has created multiple points of presence for individual employees with which other employees must contend. The resulting fragmentation of the SMB communication fabric can create a barrier to effective communications and collaboration.

"Unified communications means a lot to you and a lot to us, but sometimes we have difficulty trying to transform this into something everybody understands," Hamann said. "It is important for SMBs to understand they don't need to completely replace their system, but they can move from their PBX system to a unified communications solution tomorrow."

Sixty-eight percent of respondents have trouble coordinating communications among team members, affecting their ability to respond quickly to time-sensitive customer requests. They also average 3.7 hours per week attempting to coordinate communications across team members, slowing the realization of goals and deadlines.

Sixty-eight percent of respondents also said they experience work delays while waiting for information from others that they have attempted to reach live multiple times using multiple methods. The average delay is 3.5 hours per week per knowledge worker. Unwanted communications, including low-priority calls and voicemail, were experienced by the survey group by 77 percent of respondents, who said they spend two or more hours per week dealing with unwanted communications.

Significant ROI


 

According to Frost & Sullivan analyst Vanessa Alvarez, in general SMBs currently have very ad-hoc communications strategies in place. "With the SIS research suggesting that unified communications can help SMBs eliminate as much as 20 percent of hidden costs due to fragmented communications, it's clear that the return on investment is significant," Alvarez said.

Despite the current economic climate, when SMBs are hunkering down and trimming (or slashing) budgets, Hamann said midmarket companies need to consider the benefits in unified communications investments. He said many SMBs hesitate in investment, even though they recognize these pain points as a significant issue, because many SMBs don't have a complete grasp of what unified communication really means. "This comes down to education, and the smaller SMBs, the less educated they are, because it's not their main focus," he said. More education from resellers and vendors is required.

"Although we are seeing strong adoption in this market, based on this study's findings, we believe that more than 60 percent of SMBs are not currently using a UC solution and are missing out on a major opportunity to cut costs. In addition, they can gain new levels of competitiveness, productivity and collaboration," he said. "Even by assigning hard costs of more than $5,000 per employee a year for these pain points, there remains the soft costs of lost opportunities and customer dissatisfaction due to the lack of responsiveness caused by disparate communications."

As more and more SMBs turn to mobile communications solutions to stay competitive in a mobile marketplace, Hamann said SMBs must choose solutions that offer flexibility and scalability. With clients using various technologies such as VOIP, along with the plethora of mobile devices and operating systems, finding a solution that achieves widespread compatibility is no easy task, especially for small businesses with limited budgets and technical experitise.

The study found 61 percent of respondents find difficulty in establishing collaboration sessions with colleagues and average 3.3 hours per week attempting to address issues of inaccessibility or lack of full collaboration with colleagues. "An SMB with 300 people has an IT department and it becomes part of their job," Hamann said. "It comes down to consultants, to a certain degree, but primarily the resellers and the vendors to really do this training and explanation on unified communications."

These pain points also hurt business opportunities and relationships with existing clients, he said. Seventy-four percent of respondents said they average 3.3 hours per week dealing with negative comments or complaints from customers, specifically because the customer was unable to reach them in a timely fashion.

Hamann said this eight percent loss in productivity is itself significant, but the true cost of customer dissatisfaction may be much greater. "It adds up quite significantly across the overall company," he said. "Everyone who is communicating through whatever means should have felt these pain points in some way."

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