CASE STUDY – 1
VIRTUAL MEETINGS: SMART MANAGEMENT
Instead of taking that 6:30 A.M. plane to make a round of meetings in Dallas,
wouldn’t it be great if you could attend these events without leaving your desktop?
Today you can, thanks to technologies for videoconferencing and for hosting online
meetings over the Web. A June 2008 report issued by the Global e-Sustainability
Initiative and the Climate Group estimated that up to 20 percent of business travel
could be replaced by virtual meeting technology.
A videoconference allows individuals at two or more locations to communicate
simultaneously through two-way video and audio transmissions. The critical feature
of videoconferencing is the digital compression of audio and video streams by a
device called a codec. Those streams are then divided into packets and transmitted
over a network or the Internet. Until recently, the technology was plagued by poor
audio and video performance, and its cost was prohibitively high for all but the largest
and most powerful corporations. Most companies deemed videoconferencing a poor
substitute for face-to-face meetings.
However, vast improvements in videoconferencing and associated technologies have
renewed interest in this way of working. Videoconferencing is now growing at an
annual rate of 30 percent. Proponents of the technology claim that it does more than
simply reduce costs. It allows for “better” meetings as well: it’s easier to meet with
partners, suppliers, subsidiaries, and colleagues from within the office or around the
world on a more frequent basis, which in most cases simply cannot be reasonably
accomplished through travel. You can also meet with contacts that you wouldn’t be
able to meet at all without videoconferencing technology.
For example, Rip Curl, a Costa Mesa, California, producer of surfing equipment, uses
videoconferencing to help its designers, marketers, and manufacturers collaborate on
new products. Executive recruiting firm Korn/Ferry International uses video
interviews to screen potential candidates before presenting them to clients.
Today’s state-of-the-art videoconferencing systems display sharp high-definition TV
images. The top-ofthe- line videoconferencing technology is known as telepresence.
Telepresence strives to make users feel as if they are actually present in a location
different from their own. You can sit across a table from a large screen showing
someone who looks quite real and life-size, but may be in Brussels or Hong Kong.
Only the handshake and exchange of business cards are missing. Telepresence
products provide the highest- quality videoconferencing available on the market to
date. Cisco Systems has installed telepresence systems in more than 500 organizations
around the world. Prices for fully equipped telepresence rooms can run to $500,000.
Companies able to afford this technology report large savings. For example,
technology consulting firm Accenture reports that it eliminated expenditures for 240
international trips and 120 domestic flights in a single month. The ability to reach
customers and partners is also dramatically increased. Other business travelers report
tenfold increases in the number of customers and partners they are able to reach for a
fraction of the previous price per person. MetLife, which installed Cisco Telepresence in three dedicated conference rooms in
Chicago, New York, and New Jersey, claims that the technology not only saved time
and expense but also helped the company meet its “green” environmental goals of
reducing carbon emissions by 20 percent in 2010.
Videoconferencing products have not traditionally been feasible for small businesses,
but another company, Life Size, has introduced an affordable line of products as low
as $5,000. Overall, the product is easy to use and will allow many smaller companies
to use a high-quality videoconferencing product. There are even some free Internetbased options like Skype videoconferencing and ooVoo. These products are of lower
quality than traditional videoconferencing products, and they are proprietary, meaning
they can only talk to others using that very same system. Most videoconferencing and
telepresence products are able to interact with a variety of other devices. Higher-end
systems include features like multi-party conferencing, video mail with unlimited
storage, no long-distance fees, and a detailed call history.
Companies of all sizes are finding Web-based online meeting tools such as WebEx,
Microsoft Office Live Meeting, and Adobe Acrobat Connect especially helpful for
training and sales presentations. These products enable participants to share
documents and presentations in conjunction with audio conferencing and live video
via Webcam. Cornerstone Information Systems, a Bloomington, Indiana, business
software company with 60 employees, cut its travel costs by 60 percent and the
average time to close a new sale by 30 percent by performing many product
demonstrations online. Before setting up videoconferencing or telepresence, it’s
important for a company to make sure it really needs the technology to ensure that it
will be a profitable venture. Companies should determine how their employees
conduct meetings, how they communicate and with what technologies, how much
travel they do, and their network’s capabilities. There are still plenty of times when
face-to-face interaction is more desirable, and often traveling to meet a client is
essential for cultivating clients and closing sales.
Videoconferencing figures to have an impact on the business world in other ways, as
well. More employees may be able to work closer to home and balance their work and
personal lives more efficiently; traditional office environments and corporate
headquarters may shrink or disappear; and freelancers, contractors, and workers from
other countries will become a larger portion of the global economy.
Sources: Joe Sharkey, “Setbacks in the Air Add to Lure of Virtual Meetings, The New York Times, April
26, 2010; Bob Evans, “Pepsi Picks Cisco for Huge TelePresence Deal,” February 2, 2010; Esther
Schein, “Telepresence Catching On, But Hold On to Your Wallet,” Computerworld, January 22, 2010;
Christopher Musico, “Web Conferencing: Calling Your Conference to Order,” Customer Relationship
Management, February 2009; and Brian Nadel, “3 Videoconferencing Services Pick Up Where Your
Travel Budget Leaves Off,” Computerworld, January 6, 2009; Johna Till Johnson, “Videoconferencing
Hits the Big Times…. For Real,” Computerworld, May 28, 2009. CASE STUDY QUESTIONS
1.
2.
3.
4. One consulting firm has predicted that video and Web conferencing will make
business travel extinct. Do you agree? Why or why not?
What is the distinction between videoconferencing and telepresence?
What are the ways in which videoconferencing provides value to a business?
Would you consider it smart management? Explain your answer.
If you were in charge of a small business, would you choose to implement
videoconferencing? What factors would you consider in your decision? MIS IN ACTION
Explore the WebEx Web site (www.webex.com) and answer the following questions:
1.
2.
3. List and describe its capabilities for small-medium and large businesses. How
useful is WebEx? How can it help companies save time and money?
Compare WebEx video capabilities with the videoconferencing capabilities
described in this case.
Describe the steps you would take to prepare for a Web conference as opposed
to a face-to-face conference.
