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  WR Forums
  Market Issues and Barriers
  Cost Analysis for Videoconferencing

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Author Topic:   Cost Analysis for Videoconferencing
AndyN
Wainhouse Research

Posts: 345
From: Sarasota FL USA
Since: Jul 2000

posted 09 February 2001 02:53 PM     Click Here to See the Profile for AndyN   Click Here to Email AndyN     Edit/Delete Message   Reply w/Quote
A WR Bulletin reader sent the following:

quote:
Do you available a cost analysis for videoconferencing? We have a client who would like to deploy two systems between their offices. Since this is a $100,000 expense, they are asking us for a cost analysis that would justify such an expense.

Additionally, if you also have a survey from past owners of systems that demonstrates how video conferencing have benefited their companies. That would be greatly appreciated.
Thank you.


Any comments or contributions? Thanks.


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AndyN
Wainhouse Research

Posts: 345
From: Sarasota FL USA
Since: Jul 2000

posted 28 February 2001 08:31 AM     Click Here to See the Profile for AndyN   Click Here to Email AndyN     Edit/Delete Message   Reply w/Quote
Jim Webster of Continental Film submitted this Videoconferencing Cost Analysis spreadsheet via email. Thanks Jim!

http://www.wainhouse.com/files/vcnf_cost_analysis.xls

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jodonnell
Sr. Member

Posts: 51
From: Simsbury, CT 06070
Since: Feb 2001

posted 28 February 2001 12:28 PM     Click Here to See the Profile for jodonnell   Click Here to Email jodonnell     Edit/Delete Message   Reply w/Quote
My first question is How does it cost $100,000 for two video systems? That seems out of the stratusphere.

Joe

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Sandy
Member

Posts: 23
From: Irvine,CA,USA
Since: Feb 2001

posted 26 March 2001 04:39 PM     Click Here to See the Profile for Sandy   Click Here to Email Sandy     Edit/Delete Message   Reply w/Quote
Let me make some assumption,

This company always have meeting with between
pacific coasts or east coast and west coast.

Flight fare may be $2K/person. (full economy)
for trans Pacific or east and west coast, and may be $500(Discount)


Total human cost,including everything, let me say 20K/month so
20k/month /20working days a month =1K/day.

Fly to pacific ocean and come back spends 2 day extra.

So one non video conference meeting cost will be 4K to 2.5K /person.

Let make assumption one meeting with 3 person, so US$12K to 7.5K /meeting.

VC Budgets is 100K, let make assumption to use this system for 2 years.

100K/2 = 50K/year

50K /12K~7.5K = 4~7times meeting/year.

This is a break point.


So if this company have meetings with oversea company or different coast company,
more than 4 to 7 times year,
It's good idea to introduce this system.

Off course, VC quality is WORSE (I'm sorry)
than "REAL MEETING". So it is good idea to multiply 1.2 (every 5 times have one real meeting) to 5 (every 5 times have one VC meeting) to meeting times, is recomended.

And please don't compare to chat based system,for new generation people, (I'm sorry I'm old type )this is more comfortable than real meetings in some cases.

Thank you

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Yoshitaka Fujiwara
Member

Posts: 24
From: Tokyo, Japan
Since: Mar 2001

posted 28 March 2001 09:00 AM     Click Here to See the Profile for Yoshitaka Fujiwara   Click Here to Email Yoshitaka Fujiwara     Edit/Delete Message   Reply w/Quote
I know the middle-size company which introduced 4 set-top systems and a MCU among 4 sites at $300,000, and soon got back the value for it for six months.

Since then they have been holding a director's meeting every week.

...though this is the case in Japan.

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AndyN
Wainhouse Research

Posts: 345
From: Sarasota FL USA
Since: Jul 2000

posted 08 May 2001 10:41 PM     Click Here to See the Profile for AndyN   Click Here to Email AndyN     Edit/Delete Message   Reply w/Quote
We have just added a Case Studies web page to this site. Many of the cases - especially the PictureTel Best Practices - contain Cost Analysis models.

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Sandy
Member

Posts: 23
From: Irvine,CA,USA
Since: Feb 2001

posted 11 May 2001 08:16 PM     Click Here to See the Profile for Sandy   Click Here to Email Sandy     Edit/Delete Message   Reply w/Quote
Thank you. This is very useful data>>>Andy and Picture tell.

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AndyN
Wainhouse Research

Posts: 345
From: Sarasota FL USA
Since: Jul 2000

posted 03 December 2001 12:14 PM     Click Here to See the Profile for AndyN   Click Here to Email AndyN     Edit/Delete Message   Reply w/Quote
For the record, InView has a web-based cost justification model posted here

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