Telepresence and the Video Frontier. November 2010 Hyoun Park

Transcription

1 November 2010 Hyoun Park

2 Page 2 Executive Summary This report shows how companies gain business value from telepresence based on their goals of reducing travel, achieving a quantitative return on investment, optimizing cost centers, or improving profit centers. This research is based on interviews and survey responses of 102 respondents in October and November of Best-in-Class Performance Aberdeen used the following three key performance criteria to distinguish Best-in-Class companies: Change in travel over the past year Fully quantified Return on Investment (ROI) for the company's telepresence investment Integration of revenue-based activities with telepresence Research Benchmark Aberdeen s Research Benchmarks provide an in-depth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations Competitive Maturity Assessment Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics, including: Being over twice as likely to have an executive champion compared to Laggard organizations 79% adoption of document and content sharing capabilities for their telepresence solution Being three times more likely than all other companies to have a formal definition of ROI for their telepresence solution Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must: Identify specific departmental and business use cases for telepresence that have a useful value proposition Educate employees and other business telepresence users on best practices for using telepresence effectively Gain Business-to-Business (B2B) telepresence capabilities to extend telepresence usage to new departments Monitor and maintain network infrastructure to assure a quality of service sufficient to support organizational telepresence activities

3 Page 3 Table of Contents Executive Summary...2 Best-in-Class Performance...2 Competitive Maturity Assessment...2 Required Actions...2 Chapter One: Benchmarking the Best-in-Class...4 Business Context...4 The Maturity Class Framework...6 The Best-in-Class PACE Model...6 Best-in-Class Strategies...7 Chapter Two: Benchmarking Requirements for Success...10 Competitive Assessment...11 Capabilities and Enablers...12 Chapter Three: Required Actions...20 Laggard Steps to Success...20 Industry Average Steps to Success...20 Best-in-Class Steps to Success...21 Appendix A: Research Methodology...23 Appendix B: Related Aberdeen Research...25 Figures Figure 1: Top Business Pressures for Telepresence...5 Figure 2: Top 2 Strategic Actions for Telepresence...7 Figure 3: Departments Using Telepresence...9 Figure 4: Telepresence Requires Security and Enforcement...12 Figure 5: Executives, Techies, and Collaborators All Play a Role...13 Figure 6: The Importance of Telepresence Management...15 Figure 7: Key Environmental Telepresence Technologies...16 Figure 8: Interoperability and External Communication...17 Figure 9: Tracking Telepresence Quality, Support, and SLAs...18 Figure 10: The Business Value of Telepresence...19 Tables Table 1: Top Performers Earn Best-in-Class Status...6 Table 2: The Best-in-Class PACE Framework...7 Table 3: Top 2 Challenges for Telepresence...8 Table 4: The Competitive Framework...11 Table 5: The PACE Framework Key...24 Table 6: The Competitive Framework Key...24 Table 7: The Relationship Between PACE and the Competitive Framework...24

4 Page 4 Chapter One: Benchmarking the Best-in-Class Business Context Telepresence has traditionally been described and understood in the marketplace as a suite of technologies, often with a custom-built room, that provide high-definition video to connect two or more rooms remotely. Although videoconferencing is an important aspect of telepresence, this definition does not adequately describe both the reality and the business importance of telepresence. From an Aberdeen perspective, the value and definition of telepresence are both evident from breaking up the word into tele-, a Greek prefix indicating distance, and presence, which indicates the state of existing in a particular location. From a business perspective, the goal of telepresence should be to provide employees, partners, suppliers, customers, or potential buyers with enough access to be able to simulate the key aspects associated with in-person meetings and business collaboration. By focusing on the goal of telepresence, rather than pre-conceived definitions of telepresence or self-determined definitions of telepresence, companies can start towards developing a solution that answers the business needs associated with immersive and collaborative telepresence. From a more detailed perspective, the value of telepresence is in combining the realistic and reliable video with interactive capabilities that may include content sharing, presentation, eye contact, spatial audio, remote control, movement, and unified messaging. In doing so, the technology must actually become secondary to the use case, since poor human-machine interfaces have been associated with confusion, stress, and even injury based on the challenges of working with appropriate technology 1. In the March 2010 benchmark report Business Class Video, Aberdeen established top pressures driving the need for video in departments ranging from learning and development to marketing to product development. However, this research covered video as a stand-alone feature, rather than a primary method of real-time collaboration. Considering the traditional limits of video adoption in the enterprise, this approach was appropriate for these topics. However, as bandwidth has improved and video standards have provided greater quality to desktop computers and devices, videoconferencing has rapidly become more popular within the enterprise as a general Fast Facts 64% of respondents have a formal telepresence deployment in their organization 36% of respondents have implemented telepresence on a trial or experimental basis 1 EU-OSHA: The human machine interface as an emerging risk. Luxembourg: Office for Official Publications of the European Communities, 2009.

5 Page 5 communications tool. As a result, real-time videoconferencing is available in a number of form factors ranging from 4-inch mobile devices to multiple high-definition suites. With this adoption, the concept of telepresence has become hotly debated among vendors, media, and end users all seeking an understanding of how telepresence differs from videoconferencing and what implications may result for the business. From Aberdeen's perspective, the greatest difference comes from the ways telepresence solutions are designed to combine videoconferencing with virtual presence, content sharing, tactile and collaborative capabilities, spatial or stereo sound, and professionally managed eye contact to surpass the simple use of a video screen. The Business Argument for Telepresence The top business pressure identified by companies to justify the use of telepresence was the need to provide real-time collaboration for employees in a dispersed organization. This driver prevailed over concerns around travel costs, executive communications or business-to-business collaboration (Figure 1). Figure 1: Top Business Pressures for Telepresence Need for real-time collaboration by geographically dispersed teams 65% Need to reduce travel time for employees 38% 0% 20% 40% 60% 80% Corporate Adoption (n=100) Although businesses were quick to identify the need for collaboration, they were much less clear about how they defined the business value gained through telepresence. To solve this problem, Aberdeen defined three standards of value associated with telepresence: Travel reduction is a traditional metric used to measure the success of telepresence and other remote collaboration efforts. The ability to reduce travel was used as a baseline measure of success for businesses implementing telepresence. The ability to quantify a ROI from a telepresence deployment shows that telepresence was seen as a true The top benefit to telepresence is the ability to quickly bring together the best people from global organization to address urgent issues. ~ CIO, Automotive Industry, UK

6 Page 6 investment and not simply as a technological proof-of-concept. Respondents qualifying for this research averaged over $850,000 in telepresence endpoint and infrastructure investments, so the need to show business value and return should be evident to any CIO or CFO involved in the development of a telepresence solution. Aberdeen also studied whether companies were able to associate revenue with telepresence-based processes. At the end of the day, companies exist to make money by selling goods and services. Any technology investment that is not associated with that primary goal becomes a suspect investment. The Maturity Class Framework Based on the logic listed above, Aberdeen used three key performance criteria to distinguish the Best-in-Class from Industry Average and Laggard organizations, as shown in Table 1. Table 1: Top Performers Earn Best-in-Class Status Definition of Maturity Class Best-in-Class: Top 20% of aggregate performance scorers Industry Average: Middle 50% of aggregate performance scorers Laggard: Bottom 30% of aggregate performance scorers Mean Class Performance 72% fully quantified Return on Investment (ROI) on a telepresence investment 95% of respondents experienced revenue improvement from telepresence Reduced corporate travel by 22% over the past year 23% fully quantified Return on Investment (ROI) on a telepresence investment 19% of respondents experienced revenue improvement from telepresence Reduced corporate travel by 11% over the past year 21% fully quantified Return on Investment (ROI) on a telepresence investment 0% of respondents experienced revenue improvement from telepresence Increased corporate travel by 8% over the past year The Best-in-Class PACE Model To gain business value from telepresence, companies need a combination of strategic actions, organizational capabilities, and enabling technologies that can be summarized as shown in Table 2.

7 Page 7 Table 2: The Best-in-Class PACE Framework Pressures Actions Capabilities Enablers Need for real-time collaboration by geographically dispersed teams Company faces excessive corporate travel costs Improve employee access to telepresence resources Create a corporate culture to use telepresence Best-in-Class Strategies Formal policies for effective telepresence usage Dedicated resources for telepresence setup Automated software management and upgrades for telepresence endpoints Telepresence usage reports for line-of-business managers and executives Quality of Service (QoS) monitoring for telepresence Ability to track ongoing support costs associated with telepresence In contrast to business pressures, where there was one dominant need for the enterprise, there were a number of strategic actions that were used to answer the need for telepresence (Figure 2). Figure 2: Top 2 Strategic Actions for Telepresence Professional camera placement to optimize eye contact Scheduled and automated dialing to initiate telepresence Voice and video signal enhancement Multi-Point (3 or more locations) telepresence capabilities Background noise cancellation for microphones Telepresence resources available through strategic meetings management Document and desktop sharing capabilities Improve employee access to telepresence resources Identify opportunities where telepresence provides a superior experience Increase video collaboration usage for remote employees 29% 37% 34% "Telepresence has resulted in an improved collaboration culture by providing the ability to access specialized resources as and when required, either for direct service delivery to clients or timely input to planning and problem resolution processes." Increase video collaboration with external customers, partners, and contacts 28% ~ Kevin Stark, IT Manager, Government, Australia 0% 10% 20% 30% 40% Percentage of Respondents (n=97) The majority of respondents identified a strategy aimed at expanding ease of use and access to existing telepresence solutions, whether it was aimed at

8 Page 8 all employees or specifically at remote employees or the extended enterprise of customers, partners, and an external audience. However, there was also an interesting trend around embedding telepresence into standard business processes. Although only 20% of respondents indicated that this active effort of embedding telepresence into business processes was a top strategy, 29% of Best-in-Class companies identified this strategy compared to only 7% of Laggard organizations. Companies that gained business value from telepresence didn't simply build evangelism campaigns around the use of telepresence or concentrate on the ease of use. Top respondents were over three-times more likely than their Laggard counterparts to identify and map processes and business tasks to the abilities that telepresence provides: high-value social content and information through a combination of voice, facial gestures, body language, and contextualized content sharing. Challenges in Accepting Telepresence Despite identifying benefits in using telepresence, a number of organizations also cited potential problems in using telepresence in their organizations. Laggard and Industry Average companies both struggled with the challenges of budget and product awareness. Given that telepresence has traditionally required significant capital expenditures, it makes sense that Laggard and Industry companies struggling to define the value of telepresence would lack budget to improve telepresence capabilities. Table 3: Top 2 Challenges for Telepresence Laggards/ Industry Average No discretionary budget for telepresence solutions - 41% Lack of awareness of telepresence products and/or benefits - 31% Best-in-Class Network requirements for quality telepresence - 38% Perception of poor video and/or audio quality from solutions - 33% Best-in-Class organizations that have succeeded in gaining both operational and revenue-driven improvements through telepresence identified very different challenges. For these top achievers, the concerns were around network and quality concerns. In other words, their worries have shifted from the perception of telepresence as a luxury and an unknown entity. Instead, their concerns are more reminiscent of the traditional concerns associated with landline dial tone. For these top organizations, telepresence has become a standard technology and communications option. Accordingly, these companies have shifted their concerns of future adoption from cost to performance.

9 Page 9 Aberdeen Insights Departmental Strategies Telepresence is no longer a siloed tool restricted to a specific department. Companies are now using telepresence throughout the organization to support operational needs in areas such as product development, project management, and even supply chain management (Figure 3). Figure 3: Departments Using Telepresence Executive Teams Information Technology/Support Marketing Learning and Development Business-to-Business Sales Product and Service Development Project and Portfolio Management Consulting Customer Service Supply Chain Talent Acquisition 37% 36% 33% 31% 31% 25% 23% 20% 20% 51% 63% 0% 10% 20% 30% 40% 50% 60% 70% Corporate Adoption (n=102) These departments represent three broad categories of telepresence usage: Corporate communications, which is represented by executive teams, learning and development, and talent acquisition Operational improvement, such as the use cases in information technology, project management, customer service, and supply chain that optimize cost centers in the organization Revenue enhancement, which includes departments tasked with top-line growth such as marketing, sales, product development, and consulting use cases Each of these telepresence categories requires a different set of capabilities and technologies. Companies seeking to optimize their investments in telepresence must define the use categories where they seek to gain value, and then execute accordingly. In the next chapter, we will see what the top performers are doing to increase the value gained from telepresence deployments.

10 Page 10 Chapter Two: Benchmarking Requirements for Success The deployment efforts associated with telepresence solutions and integration of telepresence with business processes plays a crucial role in the ability to profit from these video-based investments. Case Study CoStar CoStar is the leading provider of information services to commercial real estate professionals in the US and the UK. Headquartered in Bethesda, Maryland with offices all over the United States, England, Scotland and France, the company has 1,000 researchers - the industry s largest independent network of researchers and analysts. Early in 1997, CoStar saw the potential of interactive telepresence to facilitate close communication among its geographically-dispersed workforce and began implementing a solution. In seeking a solution, the company sought a videoconferencing experience that allowed for employees to communicate seamlessly with a high level of interactivity. To achieve this solution, the company required both high definition video and low levels of jitter, latency, and packet loss to ensure that synchronous collaboration was taking place in a realistic and personal manner. Today, with the company s rollout of a high definition telepresence solution across its 30 worldwide offices, the company views video as a cornerstone of its international operations. CoStar s video conferencing deployment has resulted in strong levels of adoption and utilization throughout the company. On average, the company is conducting an estimated 40 to 50 video conferences every day and as many as 10,000 video conferences per year, with some employees using video conferencing systems up to five hours daily. By embracing video as a key communications tool, Florance estimates the company saves as much as $5 million a year on travel expenses and process improvements due to its use of video across the company. According to CoStar s founder, president and CEO, Andrew Florance, the benefits of video extend far beyond cost savings to providing a truly immersive remote meeting experience to all participants. Our use of video, particularly high definition video, has brought tremendous intangible benefits. For example, during our weekly staff meeting with London it feels as if everyone is working in one office, even though we are spread across ten thousand miles. I see their body language, nonaudible communication, it s amazing. The only thing I can t do is walk around to their workstations afterwards. Fast Facts In the typical Aberdeen respondent organization: 49% of employees have access to telepresence rooms 31% of employees have access to desktop videoconferencing Employees used their telepresence room 15 hours per week

11 Page 11 Competitive Assessment Aberdeen Group analyzed the aggregated metrics of surveyed companies to determine whether their performance ranked as Best-in-Class, Industry Average, or Laggard. In addition to having common performance levels, each class also shared characteristics in five key categories: (1) process (the approaches they take to execute daily operations); (2) organization (corporate focus and collaboration among stakeholders); (3) knowledge management (contextualizing data and exposing it to key stakeholders); (4) technology (the selection of the appropriate tools and the effective deployment of those tools); and (5) performance management (the ability of the organization to measure its results to improve its business). These characteristics (identified in Table 4) serve as a guideline for best practices, and correlate directly with Best-in-Class performance across the key metrics. Table 4: The Competitive Framework Process Organization Knowledge Technology Performance Best-in-Class Average Laggards Telecommuting policies for remote employees 67% 29% 21% Process to identify business tasks that can be optimized through telepresence 58% 16% 4% Job role/department-based policy to determine appropriate access to telepresence 53% 22% 7% Training classes for effective business usage of telepresence on an ongoing basis 50% 10% 4% Network management associated with telepresence bandwidth 68% 40% 25% Telepresence usage reports for line-of-business managers and executives 53% 23% 10% Business-to-business (B2B) telepresence capabilities 65% 30% 7% Bandwidth management for telepresence applications 68% 37% 3% Quality of Service (QoS) monitoring for telepresence 58% 30% 9% Formal definition of ROI metrics for telepresence 48% 18% 3%

12 Page 12 Capabilities and Enablers Based on the findings of the Competitive Framework and interviews with end users, Aberdeen s analysis of the Best-in-Class shows how telepresence is used to support enterprise goals ranging from effective communications to quantitatively-driven ROI. Process Although telepresence is best known as an immersive and technologically driven experience, Best-in-Class companies focused on three areas: remote collaboration, iterative self-improvement, and the compliance issues associated with telepresence (Figure 4). "We gain efficiencies from telepresence by virtually meeting face to face while maintaining a strong cost structure. ~Josee Kowala, Associate Director, Bell Canada Figure 4: Telepresence Requires Security and Enforcement Telecommuting policies for remote employees 19% 28% 74% Employee feedback process to provide best practices for telepresence 6% 13% 61% Process to identify business tasks that can be optimized through telepresence 6% 15% 58% Enforcement of appropriate use policy for telepresence 6% 19% 58% Enforced security policy for fixed room telepresence usage 16% 28% 56% Best-in-Class Industry Average Laggards 0% 20% 40% 60% 80% Corporate Adoption (n=102) As companies have become increasingly dispersed, organizations have been challenged to focus on how to best equip remote employees to do their jobs effectively. By providing appropriate policies that determine when travel is appropriate, what kinds of tools remote employees should have access to, and how to effectively choose between telepresence, travel and other collaborative options (such as voice, , web conferencing, instant messaging, social media and others), remote employees are able to take advantage of telepresence and utilize it properly. Companies that succeed in using telepresence to make money have thought about these policies while only 28% of Industry Average and 19% of Laggards currently have these types or remote telecommuting and collaboration policies in place.

13 Page 13 Successful organizations also realize that technology does not work in a vacuum. It is only through employee feedback and constant improvement that technologies become better aligned to the needs of the organization. This is why a majority of Best-in-Class organizations have an employee feedback process and the ability to formally identify business tasks that can be improved through telepresence. While this process does not have to be as formalized as a cross-departmental task force, these feedback and suggestion mechanisms should be made easily available to all employees that could potentially gain value from a telepresence solution. Finally, telepresence provides its own challenges in terms of appropriate use and security. Telepresence combines the compliance issues of businessbased messages with the misunderstandings and risks associated with holding live events. However, it also provides the opportunity for a live and personalized reaction to timely events where an or phone message may be seen as distant or inappropriate. Companies must enforce appropriate usage policies to avoid risk and to gain new opportunities from a communications, service, or sales perspective. Organization Telepresence deployments associated with ROI and revenue benefited from executive support, appropriate technical resources, and business resources associated with telepresence (Figure 5). Figure 5: Executives, Techies, and Collaborators All Play a Role Executive champion for video-based collaboration 19% 38% 67% Dedicated resources to support the telepresence network 9% 37% 61% Dedicated resources to support telepresence endpoints and scheduling 3% 29% 58% Expert resources experienced in integrating telepresence with business processes 10% 32% 56% Ongoing training classes for effective telepresence business usage 7% 6% 56% Best-in-Class Industry Average Laggards 0% 20% 40% 60% 80% Corporate Adoption (n=102)

14 Page 14 Although executive sponsorship is typically useful for the adoption of any technology or practice, telepresence is aided by this support for multiple reasons. First, this high-level champion is often needed to insure that telepresence is used outside of its traditional home in corporate communications. By showing the value of video to employees, the executive sponsor can lead not only by mandate, but also by example. While twothirds of Best-in-Class organizations have learned this lesson, only 19% of Laggards have executive-level support for their telepresence solutions. Telepresence also depends on having an adequate support structure. Although both network and endpoint support demands are receding as video standards become more efficient and network bandwidth becomes more abundant, Best-in-Class organizations treat their telepresence solutions as standard communications infrastructure. Accordingly, they have dedicated resources available for potential support issues as in-house, professional services, or managed services - just as they would for standard network, telecom, and collaboration technology issues. This support structure is almost non-existent in Laggard organizations and steadily develops in organizations gaining business value from telepresence. Although telepresence is often associated with the need for network support, organizations must consider the holistic experience associated with endpoint support as well. Issues as mundane as a tilted camera or a poorly placed content sharing screen could reduce the efficacy of a telepresence solution if support is provided by someone unfamiliar with telepresence endpoints and setups used in the organization. Best-in-Class organizations also focus on the organizational investments that supplement the feedback and educational processes that identify value. They take advantage of employees who either have previous experience with telepresence or are early adopters who are willing to experiment with current business processes. This spirit of experimentation and business process innovation may seem counter to the traditional perspective of enterprise technologies, but organizations that have experienced the greatest value from telepresence have both encouraged and identified this behavior. Top organizations even go a step further to continue the education of their employees by teaching the lessons learned in telepresence usage on an ongoing basis. Best-in-Class companies were over seven-times more likely to teach employees how to use telepresence compared to all other companies, making this one of the top differentiators in this entire study. "We get reduced travel time and preserve quicker decision making by using telepresence." ~Manager, Information Technology, Food / beverage, United Kingdom Knowledge Management Companies that achieved quantitative ROI maintained two sets of knowledge and data management capabilities: technical management capabilities and employee-driven usage and support capabilities. From a technical perspective, a majority of Best-in-Class organizations had visibility into the network management, endpoint management, and software management challenges specifically associated with telepresence. Both Industry Average and Laggard organizations had relatively high adoption of

15 Page 15 network management capabilities, indicating the awareness of bandwidth issues in telepresence. However, Industry Average organizations were less capable in managing the software associated with telepresence solutions and Laggards even struggled with the inventory and identification associated with endpoint management. Organizations focused on either gaining value from current telepresence deployments or understanding the value proposition of telepresence and must take endpoint and software management into account, since a substantial telepresence investment can be easily degraded simply by using an endpoint or management system that has not been upgraded to current software standards (Figure 6). Figure 6: The Importance of Telepresence Management Automated software management and upgrades for telepresence endpoints 3% 26% 67% Network management associated with telepresence bandwidth 25% 43% 65% Endpoint management for all telepresence endpoints 9% 39% 58% Best-in-Class Industry Average Laggards 0% 20% 40% 60% 80% Corporate Adoption (n=102) From a line-of-business perspective, companies that gain value from telepresence also provide access to telepresence usage reports. By understanding the utilization of telepresence and aligning behaviors to business outcomes, business managers can make more educated decisions regarding employee usage of telepresence to provide customer support, conduct sales presentations, interview potential employees, or to educate employees, customers, partners, or an external audience. Technology Aberdeen analyzed the adoption of technologies directly experienced by end users to see which were associated with business value (Figure 7).

16 Page 16 Figure 7: Key Environmental Telepresence Technologies Document and desktop-sharing technologies 30% 47% 79% Professional camera placement to optimize eye contact 10% 41% 79% Multi-Point (3 or more locations) telepresence capabilities 17% 41% 79% Scheduled and automated dialing to initiate telepresence 10% 36% 79% 0% 20% 40% 60% 80% Corporate Adoption (n=102) Laggards Industry Average Best-in-Class Best-in-Class companies gained the greatest value from a telepresence environment that provided content sharing, professionally aligned eye contact, multi-point telepresence capabilities, and the ability to schedule and automate dialing for telepresence calls. These technologies demonstrate the broad communicative value of telepresence as a business resource: To share document and video streaming information To share personalized human interactions To provide this context to multiple stakeholders By combining high-value asynchronous and synchronous collaboration into one experience, Best-in-Class telepresence deployments provide technologies to integrate corporate interactions that may otherwise have to be separated into multiple types of meetings, messages, and calls. However, these top organizations did not keep their telepresence capabilities limited within their organization. Although optimal telepresence experiences involved direct calls with other high-end telepresence environments, telepresence is ultimately a vehicle for collaboration and not simply a dedicated and isolated experience. To that end, Best-in-Class organizations pursued multiple forms of interoperability (Figure 8).

17 Page 17 Figure 8: Interoperability and External Communication Business-to-business (B2B) telepresence capabilities 7% 30% 65% Telepresence interoperable with non-telepresence endpoints 3% 23% 58% Interoperability 55% between multiple 21% Best-in-Class vendor solutions 0% Industry Average Laggards 0% 25% 50% 75% Corporate Adoption (n=102) The value of telepresence was greatly enhanced by having some form of B2B capability. Although telepresence has many internal uses that drive value, business use cases such as project management, product development and marketing benefited from the ability to traverse firewalls and connect to other locations. To aid this communication, a majority of Best-in-Class organizations also achieved interoperability with non-telepresence endpoints and with multiple vendors. This allowed telepresence to serve as an externally-facing channel to improve sales opportunities, brand equity, and even product research and development efforts. In comparison, the vast majority of Laggard organizations lacked the ability to use telepresence with the outside world or even to effectively connect their own telepresence solutions to other endpoints within their own organizations. These Laggard deployments based on outdated technology may meet physical descriptions for telepresence, but they lack the interoperability and functionality that would allow these companies to get a quantifiable return on investment. Performance Management The adoption of telepresence-based performance management capabilities was based both on the ability to measure technical performance in terms of service and quality and in terms of measuring business value. In general, Aberdeen respondents had lower adoption of these capabilities compared to other categories of capabilities and technologies, which represents both a potential weakness and a potential opportunity to quickly improve by tracking simple metrics. From a service perspective, between 50% and 60% of Aberdeen's Best-in- Class community were able to consistently track metrics around the Quality "Telepresence allowed us to accelerate the replacement of aging systems and obsoleted delivery methods. Now, we are able to provide reliable connectivity without impacting production data over the network." ~Manager, IT, Consumer Durable Goods, United States

18 Page 18 of Service (QoS), support costs, and Service Level Agreements (SLAs) that were associated with their telepresence solutions (Figure 9). Figure 9: Tracking Telepresence Quality, Support, and SLAs Quality of Service (QoS) monitoring for telepresence 9% 30% 58% Ability to track ongoing support costs associated with telepresence 3% 26% 55% Formal service level agreements for telepresence services 9% 30% 50% 0% 20% 40% 60% Corporate Adoption (n=102) This lack of visibility is surprising, considering that Best-in-Class companies have overwhelmingly transformed their telepresence efforts from a pure cost center to a technology associated with revenue. Although Best-in-Class organizations are roughly twice as likely to track QoS monitoring and service level agreements for their telepresence solutions, nearly half lack these basic capabilities. However, this also reflects the lack of expectations that many telepresence users have regarding the quality of service available. Companies seeking value from their telepresence solution would be well served to pursue guarantees regarding packet delivery or packet recovery capabilities to ensure the quality of their telepresence calls. Aberdeen Insights Quantifying the Value of Telepresence In this research, 83% of Aberdeen respondents identified travel savings as part of the business value provided by telepresence, but what other value propositions are companies identifying and quantifying? Vendors may talk about IT infrastructure and green footprint reduction, but is this a key business proposition to end users who use the technology (Figure 10)? continued

19 Page 19 Aberdeen Insights Quantifying the Value of Telepresence Figure 10: The Business Value of Telepresence Travel reduction 83% Efficiencies gained in business processes Improvements in learning and development Green footprint Acceleration of strategic projects Revenue created through telepresence Costs reduced through improved remote talent acquisition Products and services developed with telepresence Reduction in IT infrastructure and bandwidth Improvement in sales conversion rates Return on Marketing Investment (ROMI) 41% 32% 29% 28% 21% 17% 17% 17% 15% 12% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Corporate Adoption (n=102) Surprisingly, Aberdeen's general audience identified business process efficiency and learning and development gains more often than the value of reducing their carbon footprint. In a business environment, productivity and improved skill sets are both important aspects of maintaining growth while green IT benefits can be more difficult to define in geographic areas where green compliance isn't mandated and taxed. Although these benefits still require technical excellence, the business value of telepresence is being established above and beyond the traditional claims of travel reduction and IT optimization that have often been used as the sole quantifiable metrics of added value to the enterprise.

20 Page 20 Chapter Three: Required Actions Whether a company is trying to move its performance in telepresence from Laggard to Industry Average, or Industry Average to Best-in-Class, the following actions will help spur the necessary performance improvements: Laggard Steps to Success Laggard organizations have some sort of video-driven communications solution in place, but it lacks one or more technical characteristics traditionally associated with telepresence. In addition, Laggards lack the internal capabilities associated with ROI that their Industry Average and Best-in-Class peers have already adopted. How do Laggards catch up and get business value with their existing solutions? Go beyond the executive team. In Laggard organizations, 86% of executive teams had access to telepresence, compared to 30% of learning and development departments and 20% of business-tobusiness sales departments. By looking at these departments, Laggards can potentially replace expensive on-site events and demonstrations while providing value to other areas of the business. Manage your bandwidth wisely. One of the top gaps between Laggards and Industry Average organizations was the adoption of network and bandwidth management for telepresence applications. This will be increasingly important if your organization has any plans to increase video usage or if adoption increases due to employee demand. Maintain dedicated resources for network and endpoint maintenance. It is not a secret that telepresence can be a bandwidth-heavy application. However, the challenge for telepresence is quickly shifting from bandwidth to the adjustments needed to support multiple endpoints, software profiles, and custom applications. To align your telepresence deployment to your business needs, your company will need access to someone who understands the telepresence ecosystem and how telepresence has rapidly changed over the past decade. Industry Average Steps to Success Industry Average organizations have typically acquired the majority of technologies associated with telepresence, but the business value that they gain from telepresence is limited to internal infrastructure optimization and does not extend to top-line growth. To achieve Best-in-Class status, Aberdeen makes the following suggestions: Focus on all aspects of interoperability. With the proliferation of videoconferencing options and endpoints, the value of telepresence solutions will only increase as they become able to tap into a growing network of video-enabled devices. As you gain the ability to connect with other providers' solutions, desktop endpoints, and a variety of mobile technologies, you will be able to support new forms of outreach and broadcasting that add value to the organization. Fast Facts The typical Aberdeen respondent organization: Quantified a 49% ROI on their telepresence investment Reduced travel spend by over $800,000, although less than half of that amount was directly attributed to telepresence

21 Page 21 Talk to your employees. Industry Average respondents are at practically the same level as Laggard organizations in terms of identifying use cases and best practices for telepresence usage. Rather than simply provide technical support for telepresence, you need to ask employees how they actually use the technology. There may be successful business practices that have not been shared simply because nobody is considering how telepresence is being used in your organization. Improve the ease-of-use for your telepresence solution. How easy is it to schedule a telepresence meeting? Do employees understand how to use your current technology setup? Over 70% of Industry Average organizations lack training classes or primers for using telepresence equipment. In addition, only 27% of Industry Average respondents believe that improved ease-of-use would help their organization to consider telepresence to a greater extent, compared to over half of Best-in-Class organizations. Now that your organization has the basic technologies in place, make sure that employees can easily schedule, access, and use the telepresence resources that are available. Best-in-Class Steps to Success Best-in-Class companies have successfully reduced travel, generated telepresence-driven ROI, and gained revenue-related benefits from their telepresence solution. For these companies, the challenge is to find new value propositions and continue to justify their investment in telepresence. To prepare for the future, Aberdeen recommends the following: Consider a BPO approach for telepresence. As IT quickly transforms into a service and usage-based capability, companies must ask themselves which technical support aspects are core to organizational goals. Currently, 41% of Best-in-Class organizations are considering a BPO approach to telepresence, which indicates that they are questioning the benefits of in-house support and both the cost and resource alignment associated with that commitment. Develop a plan for integrating smartphones and other mobile devices with a telepresence solution. Seventy-two percent (72%) of Best-in-Class organizations are planning to somehow incorporate smartphones into their telepresence solution. However, this step requires companies to align their telepresence resources, which are often siloed in their organization, with their enterprise mobility resources, which can be difficult to find. But considering the rapid change that is occurring in both the mobility and telepresence industries, it will take subject matter experts from both areas to provide a smooth and rapid integration that meets the demands of employees. Think about Green IT again. Forty-five percent (45%) of Best-in-Class companies are seeking the ability to determine Green footprint reduction based on telepresence usage. Although the

22 Page 22 green IT movement was temporarily waylaid by the Great Recession of 2009, the financial restraints that paralyzed all noncore activities are starting to loosen. The ability to track green footprint both based on travel and facilities reduction will become a core metric in judging your company's sustainability. As the triple bottom line of sustainability (people, planet, profit) gains traction and mindshare, telepresence and sustainability will quickly become linked in the minds of any executives with sustainability concerns. Aberdeen Insights A Challenge to Telepresence The concept of telepresence has slowly changed over time as the technical realities of video, collaborative capabilities and human comfort with video have changed. Although telepresence is associated with concepts such as "immersive," "life-like," and "better than being there," these ideas have been associated with many different product features, functionalities, and definitions. Why has this occurred? Telepresence provides an experience that simulates real-life meetings among two or more people. As this report has shown, these meetings can include use cases as divergent as corporate meetings, remote classes, sales opportunities, and customer service sessions. However, for telepresence to be effective as a business technology, it must adequately provide support for all of these use cases. If this is the case, then telepresence can't simply be a high-powered videoconferencing solution. Instead, it is a combination of high-definition video with life-like realism and collaborative capabilities. The battlefield for authentic telepresence has often been in the simulation of realism rather than in providing more collaborative, interactive, and productive interactions. However, collaborative capabilities have transformed rapidly over the past few years with the emergence of social networking, social software, virtual worlds, and virtual event platforms. As you consider telepresence in the future, think about the types of immersion that you are truly seeking. It is important to remember that there are several levels of immersion that telepresence can potentially provide: Real or hyper-realistic immersion based on simulation of physical attributes Collaborative immersion based on topic, content creation and document-based sharing capabilities Environmental immersion based on the ability to alter and interact with a remote environment "Mobile telepresence", the ability to show the mobile user's point of view to all other participants Telepresence as a term may end up splintering into multiple definitions, but by focusing on the type of immersion you seek, you will be able to judge telepresence solutions more accurately to meet the needs of your organization.

23 Page 23 Appendix A: Research Methodology Between October and November of 2010, Aberdeen examined the use, the experiences, and the intentions of more than 100 enterprises using telepresence in a diverse set of enterprises. Aberdeen supplemented this online survey effort with telephone interviews with select survey respondents, gathering additional information on telepresence strategies, experiences, and results. Responding enterprises included the following: Job title: The research sample included respondents with the following job titles: CEO / President (11%); CIO (3%); EVP / SVP / VP (11%); General Manager (5%); Partner/Principal (6%); Director (16%); Manager (28%); and Other (21%). Department / function: The research sample included respondents from the following departments or functions: Information Technology (38%); Business Development/Sales (21%); Marketing (12%); Procurement (5%); Human Resource (4%); and Other (20%) Industry: The research sample included respondents from the following industries. IT Consulting (20%); Telecom Services (10%); Software (9%); Telecom Equipment (7%); Computer Equipment (7%); Government/Public Sector (6%); Health Devices (3%); Financial Services (3%); Oil/Gas (3%); and Other (32%) Geography: The majority of respondents (64%) were from North America. Remaining respondents were from Europe (22%), the Asia-Pacific region (8%), the Middle East and Africa (3%) and Latin America (3%). Company size: Forty-nine percent (49%) of respondents were from large enterprises (annual revenues above US $1 billion); 18% were from midsize enterprises (annual revenues between $50 million and $1 billion); and 33% of respondents were from small businesses (annual revenues of $50 million or less). Headcount: Fifty-eight percent (58%) of respondents were from large enterprises (headcount greater than 1,000 employees); 18% were from midsize enterprises (headcount between 101 and 1,000 employees); and 24% of respondents were from small businesses (headcount between 1 and 100 employees). Study Focus Responding executives completed an online survey that included questions designed to determine the following: The degree to which telepresence is deployed in their operations and the financial implications of the technology The structure and effectiveness of existing telepresence implementations Current and planned use of telepresence to aid operational and revenueproducing activities The benefits, if any, that have been derived from telepresence initiatives The study aimed to identify emerging best practices for telepresence usage and to provide a framework by which readers could assess their own management capabilities.

24 Page 24 Table 5: The PACE Framework Key Overview Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows: Pressures external forces that impact an organization s market position, competitiveness, or business operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive) Actions the strategic approaches that an organization takes in response to industry pressures (e.g., align the corporate business model to leverage industry opportunities, such as product / service strategy, target markets, financial strategy, go-to-market, and sales strategy) Capabilities the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products / services, ecosystem partners, financing) Enablers the key functionality of technology solutions required to support the organization s enabling business practices (e.g., development platform, applications, network connectivity, user interface, training and support, partner interfaces, data cleansing, and management) Table 6: The Competitive Framework Key Overview The Aberdeen Competitive Framework defines enterprises as falling into one of the following three levels of practices and performance: Best-in-Class (20%) Practices that are the best currently being employed and are significantly superior to the Industry Average, and result in the top industry performance. Industry Average (50%) Practices that represent the average or norm, and result in average industry performance. Laggards (30%) Practices that are significantly behind the average of the industry, and result in below average performance. In the following categories: Process What is the scope of process standardization? What is the efficiency and effectiveness of this process? Organization How is your company currently organized to manage and optimize this particular process? Knowledge What visibility do you have into key data and intelligence required to manage this process? Technology What level of automation have you used to support this process? How is this automation integrated and aligned? Performance What do you measure? How frequently? What s your actual performance? Table 7: The Relationship Between PACE and the Competitive Framework PACE and the Competitive Framework How They Interact Aberdeen research indicates that companies that identify the most influential pressures and take the most transformational and effective actions are most likely to achieve superior performance. The level of competitive performance that a company achieves is strongly determined by the PACE choices that they make and how well they execute those decisions.