IDC (sponsored by COLT Telecom): High Quality Network: A Prerequisite for Unified Communication - Germany

WHITE PAPER
High-Quality Network Infrastructure Prerequisite for
Network-Centric UC Solutions
Sponsored by COLT Telecom

Dan Bieler Pim Bilderbeek
February 2009

IDC OPINION
This white paper is based on the findings of a major survey of ICT decision makers
and end users in Germany. It underlines several aspects that IT managers should
consider when planning a unified communications (UC) solution:

UC is about creating a heterogeneous communications infrastructure: UC
is about human beings. It is not about the formation of one single homogeneous
communications infrastructure. End users have clear preferences depending on
their gender and age. UC must support various facets of demand for
communications with various devices and applications. In order to attain high
usage rates of a UC solution — and so boost return on investment — it is
essential to address these preferences as well as train end users to use the UC
solution.

The majority of end users already perceive IT-based communications as
the most valuable communications applications: Communications end users
do not think about the concept of UC. End users use communications to do their
job. The survey highlights that end users are technology agnostic in so far as
they already prefer to use communications solutions that are embedded in the
wider IT environment of their firms.

A high-quality network infrastructure is a prerequisite of a high-quality UC
solution: Many aspects driving end-user demand for and concerns regarding
communications relate to quality of service issues. Hence, network infrastructure
matters greatly. Any software-based UC application is only as reliable as the
network infrastructure it is based on. Telecoms service providers are well
positioned to provide and manage a high QoS network infrastructure with service
level agreements.

UC is in most instances a long-term project affecting a firm's communications culture
and transforming business processes. Open standards and interfaces are key to
attain such a gradual UC implementation. IT managers should choose a reliable
partner as UC provider. This partner should support the IT manager to plan and
implement a gradual rollout based on modular components of the UC solution. Again,
telecoms service providers are well positioned to act as reliable partners for UC
projects, given their networking expertise, financial strength, and large partner
network with hardware vendors.

TABLE OF CONTENTS

P

In This White Paper 6

Methodology 6

Definition 6
IT Managers' Perception of UC Application Elements .............................................................................. 6

Demand 7
Applications .............................................................................................................................................. 8
Devices..................................................................................................................................................... 10
Change in Communications Methods and Features ................................................................................. 12

Benefits 15
Pain Points and Issues ............................................................................................................................. 15
Vision for Communication Solutions ......................................................................................................... 16

Challenges and concerns 16
Main Challenges to UC............................................................................................................................. 16
Aspects End Users Dislike About Their Firm's Communications Solution ................................................ 18

Implementation 19
Status of UC Implementation and Plans for UC........................................................................................ 19
Measuring UC Performance ..................................................................................................................... 20
Departments Buying UC ........................................................................................................................... 21
Services Needed to Implement UC Solutions ........................................................................................... 22
Outsourcing of Communications Requirements ....................................................................................... 22
Types of Companies Seen as UC Providers ............................................................................................ 23

Conclusion 24

©2009 IDC #IDCWP01R 1

LIST OF FIGURES

P
1 IT Managers' Perception of Which Applications Are Part of UC ................................................... 6
2 Vision of IT Manager for Key UC Applications Versus End User Demand for
Communication Applications ........................................................................................................ 8
3 Primary Communication Device for Business Activities as Expressed by End Users .................. 10
4 Actual Communication Methods Used Versus Methods Wanted as Expressed by End
Users............................................................................................................................................ 12
5 Demand For and Existence of Communication Features at Work as Expressed by End
Users............................................................................................................................................ 13
6 Pain Points and Issues Addressed by UC Solutions in the Minds of IT Managers....................... 14
7 Main Challenges to UC in the Eyes of IT Managers..................................................................... 16
8 Actual UC Implementation and Plans for UC ............................................................................... 19
9 Key Performance Indicators for Measuring of UC Performance................................................... 20

2 #IDCWP01R ©2009 IDC

IN THIS WHITE PAPER
This white paper aims to help IT managers develop a sound UC strategy. The white
paper is based on the findings of a major survey of ICT decision makers and end
users in Germany, supported by IDC's existing knowledge of the IT and
communications marketplace.

The study compares the vision for emerging communications as expressed by IT
managers with the demand for communications solutions as stated by end users
inside businesses. The main areas of focus for this investigation into UC demand are
devices, applications, network infrastructure, buying processes, and communications
outsourcing.

METHODOLOGY
As part of the research for this white paper, IDC conducted a survey of 184 end users
in companies in Germany. The survey segmented end users by gender, age group
(20–34, 35–50, 50+), and company size (five groups ranging from SMBs to
companies with over 5,000 employees). The survey did not discriminate between
vertical sectors. The survey took place between November and December 2008 and
was conducted via telephone based on a panel methodology.

IDC also conducted telephone interviews with 59 CIOs and IT managers in Germany
on a panel methodology. IDC discussed demand for UC, use of UC, the potential for
outsourcing UC, and the UC buying process. The interview partners were chosen by
IDC, and the discussions took place between November and December 2008.

DEFINITION

IT Managers' Perception of UC Application
Elements

German IT managers view horizontal applications as forming the core of UC. PIM and
collaboration tools are central to their UC perception. When asked about the main
applications that make up UC, German IT managers rank email (96%), calendaring
(90%), contact management (86%), fixed voice (68%), and collaboration
management (63%) ahead of other applications.

Email was identified as a UC application by 98% of respondents, making it the
primary component of a UC solution in the minds of IT managers. As can be seen in
Figure 1, they rank email 30 percentage points higher than fixed voice as the most
important UC application. Mobile voice was identified by just 56% of IT managers as
a UC application, indicating that it is of secondary interest for decision makers when
selecting a UC solution.

CRM applications are seen as being part of UC by less than half of IT managers
(42%). ERP fares worse still, being mentioned by only 22% of IT managers. Web 2.0
applications are considered part of UC by less than a fifth of IT managers (19%).


Somewhat surprisingly, presence functionality, VoIP, and instant messaging also rank
low, at 39%, 36%, and 32%, respectively, as does video conferencing (29%). IDC
believes that the low perception of these applications is indicative of the high degree
of uncertainty still surrounding UC definitions in the market. Providers of UC should
therefore certainly not assume in-depth expertise of UC among all IT managers.

FIGURE 1

IT Managers' Perception of Which Applications Are Part of UC

Email 98%

Calendaring/scheduling 90%

Contact management 86%

Fixed voice 68%

Collaboration applications (content/task management etc.) 63%

Mobile voice 56%

Sales and customer data (CRM) 42%

Field force and services data (CRM) 42%

Instant messaging 39%

IP voice/VoIP 36%

Presence functionality 32%

Video conferencing 29%

Supply-chain related applications (ERP, inventory management) 22%

Web 2.0 applications 19%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Source: IDC, 2009

For the purpose of this White Paper, IDC will define UC as the integration of voice
(fixed and mobile), messaging (email, instant messaging, fax), calendar and contact
management, and presence functionality. Over 90% of IT managers agree with such
a definition.

DEMAND
UC solutions have little value to an organization if they are not readily adopted by end
users. Therefore, it is vital that IT managers take the communication behavior and
preferences of end users into consideration when selecting a solution, in order to
maximize uptake and thus boost return on investment (ROI). ROI is directly impacted
by usage, a point that is often underestimated during UC planning and rollout. Hence,
firms with UC ambitions need to take into account a variety of demographic factors
(age, gender, etc.) and preferences related to job function when implementing a
solution.


Applications

IT managers are generally much more enthusiastic about embracing emerging
communications applications than end users are about using them. IT managers
should try to understand what drives the underlying demand for communications
among their company's employees. UC must be about people in order to be
successful.

IT-based communication channels already dominate business communications
applications. PIM applications form the cornerstone of end-user business
communications. Both male and female end users rank email as the most important
communications application (90% and 97%, respectively), followed by calendaring
and scheduling (75% and 77%) and contact management (39% and 38%).

The fixed landline phone is seen by end users as the fourth most important
communications device, with just a quarter of the importance of email (23%). Still,
fixed voice is way ahead of mobile voice, which was rated at less than a quarter of
fixed voice in terms of its importance to end users (5%). Significantly, important UC
applications like video conferencing (7%), instant messaging (3%), or presence
functionality (2%) are not yet perceived as important business communications
applications, despite already being fairly widely used. Web 2.0, in this white paper
defined as comprising social networking, wikis, and blogging, has essentially been
ignored as a key business communications tool by end users (1%).

SMB Demand
The survey suggests that IT managers of SMBs have very similar needs to larger
companies and are just as demanding regarding quality of service as other client
segments. The demand patterns described above hold true irrespective of company
size. However, end users in SMBs show very similar preferences to end users in
larger companies. This observation underlines that UC solutions should be about the
people using them, not technological possibilities in their own right.

UC providers should therefore be wary of trying to serve SMBs' communications
needs with a "UC light" service offering. SMBs are affected by the same technical
issues as companies of other sizes. This makes it all the more challenging for UC
providers to develop economically viable UC offerings for the SMB segment, given
the combination of small-scale installations, complex demand, and challenging sales
efforts.

Vision of IT Manager Versus End-User Demand
The survey shows several major discrepancies between the vision that IT managers
have for communications and the actual patterns of demand coming from end users.
In an effort to highlight these differences, we compare answers regarding application
planning and usage provided by IT managers and end users. When ranking
applications from one to ten in terms of importance, both IT managers and end users
see email as equally important. The resulting difference is 0 (i.e., subtracting the
ranking by IT managers from the ranking by end users) as shown in Figure 2.

A similar picture exists for calendaring and scheduling, where the survey shows a
difference of 1. The difference for Web 2.0 applications is also fairly small at 1.8, as
neither IT managers nor end users rank Web 2.0 as crucial UC applications.
However, most other communications applications show real differences in opinion


between IT managers and end users. Even contact management, which end users
use fairly regularly, shows a difference of 4.7.

FIGURE 2

Vision of IT Manager for Key UC Applications Versus End User
Demand for Communication Applications

10.0 10.0
10.0 6.0

Difference (IT-manager vision less end-user demand)
9.2
8.8
9.0
8.2
Importance (1–10: 10 = most important)

5.2 5.0
8.0
4.7 4.8
6.9
7.0 6.4
3.9 4.5 4.0
3.5 5.7
6.0 3.7

5.0 3.1 3.0
4.3 2.8 4.3
4.0 4.1
4.0 3.7
2.2 3.3
3.0 2.0
3.0 1.8
2.5
1.9
2.0 1.5 1.6
1.0 1.0
1.0 0.8
0.4 0.5
0.2 0.2 0.3
0.1
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Vision of IT Manager for key UC applications End user demand for communication applications Difference

Source: IDC, 2009

The biggest discrepancy between what IT managers consider to be part of UC and
communication applications that end users actually use relates to mobile voice. While
IT managers believe that mobile voice is a fairly important part of UC, end users do
not see it as central, resulting in a difference of 5.2.

Features of Future Communications Applications
When asked which features should be part of future communications solutions, end
users and IT managers are fairly conservative. Email tops the table with 10 out of 10
points, followed by fixed and mobile voice (with 9 and 8.8 points, respectively). "New"
functionalities in the form of mobile Internet access and presence information are
placed fourth and fifth, respectively, in terms of importance (with 8.7 and 8.6 points).
"Flashy applications" like social networking or instant messaging rank fairly low on the
agenda (7.3 and 6.9 points), as do audio- and video-conferencing (7.6 and 7.1
points).


However, rather than painting a reliable ranking of absolute demand, IDC believes
that the survey highlights a considerable degree of confusion regarding several
aspects of UC solutions. For instance, it makes little sense to see instant messaging
so much lower in the ranking than presence functionality. IDC sees these features as
being intrinsically linked.

An important observation from this survey relates to the high level of interest among
older employees relative to their younger colleagues in UC features such as social
networking and instant and unified messaging. Businesses with UC solutions should
embrace these interested employee groups as their enthusiasm could help to
encourage adoption among colleagues.

Devices

Primary communication devices for business
A large majority of end users, 77%, view their PCs and thus IP-based
communications as their primary communications channel for business activities.
Over half of end users of communications, 54%, assert that their primary
communication device for business activities is the desktop PC, as can be seen in
Figure 3. An additional 23% of end users maintain that their laptop is their primary
communication device for business activities. In other words, 77% of end users
already prefer a communications solution that is part of their company's wider IT
environment. This figure is four times the rating given to the traditional landline phone,
which was mentioned by just 18% of end users as their primary communications
device for business activities.

While the overall trend is similar between various age groups and male and female,
the survey highlights some noticeable demographic differences. For instance, more
female than male end users make use of their work PCs (77% Versus 62%).
Meanwhile, laptop use is much more pronounced among male than female end users
(49% Versus 25%).

The survey points towards a slight preference among male end users for IP-based
communications, largely because of the higher laptop preference among male end
users (28% for male versus 18% for female). The position of the mobile phone as a
primary communications device for business activities is still weak, being mentioned
by just 4% of male and 5% of female end users.

The survey also highlights fairly pronounced differences in communication behavior
between age groups. While all age groups see their work PC as the central
communication device, young employees use their work PC more compared to their
older colleagues. Perhaps surprisingly, their older colleagues are more avid users of
laptops, smart phones, and their home PCs. The survey shows that the demand for
devices is fairly similar between companies of all sizes.

IT managers should take note of these differing preferences when designing UC
solutions. Inappropriate design or policies can potentially undermine end-user
adoption of UC and thus the UC business case. IDC believes that businesses that
ignore or downplay such issues during UC planning are unlikely to reap all the
potential benefits that UC promises.


FIGURE 3

Primary Communication Device for Business Activities as
Expressed by End Users

22%
Phone (landline)
15%

Personal digital assistant
1%
(with Internet/email
access but not phone-
0%
enabled)

5%
Female
Mobile phone
Male
4%

18%
Laptop personal
computer
28%

54%
Desktop personal
computer
53%

0% 10% 20% 30% 40% 50% 60%

Source: IDC, 2009

This shift in communication preferences away from traditional communications —
which IDC assumes most end users are not consciously thinking about — forms a
solid basis for UC.

Devices That Deliver Highest Productivity and Efficiency Increases
An astonishing 84% of end users view communications channels that are embedded
in the IT infrastructure as generating the highest productivity and efficiency increases.
Fifty-seven percent of end users believe that the desktop PC is the primary
communications device for increasing productivity and efficiency in their daily
communications tasks. 26% of end users see the laptop in this role. These figures are
way ahead of the traditional landline phone at 15% or the mobile phone at 1%. IDC
believes that these findings underline three important points:

End users do not fear new communications channels if they work intuitively, such
as email. IT managers should do everything they can to focus on ease of use
when designing UC solutions. End users do not care about technology as long as
it is simple to use.

The mobile phone as a central communication device for business is over-hyped
and is not yet reflected in the views and behavior of the wider end-user base.
Many end users outside the classic "BlackBerry jobs" like senior management,
financial analysts etc., do not perceive the value that the mobile phone brings to
their business communications needs.


The mobile phone, especially because it not yet viewed as a device that boosts
productivity and efficiency, is most likely to see the most significant change in
perception in the medium-term. IDC believes that its importance will increase
dramatically. This view is supported by the fact that about half of all end users,
53%, believe that their reliance on mobile solutions will increase in the next 24
months. As handset manufacturers and mobile service providers work on ways to
facilitate mobile email solutions and make them more affordable, both in the
business and the consumer segment, IDC expects end users to embrace a
similar usage pattern for mobile email as they have done for PC- and laptop-
based email.

Therefore, IT managers should focus on the desktop, the laptop, and the landline
phone as core UC solution devices, while preparing to integrate mobility at relatively
short notice. Moreover, the range of communications devices in use stresses the
importance of an HQ network that is needed for non-voice–related traffic.

Change in Communications Methods and
Features

The survey highlights that the majority of end users, 57%, expect the level of
collaboration with colleagues in other cities and countries to increase in the next 24
months. Only 4% of end users expect the role of virtual teams and international
collaboration to decline. The increase in collaboration will necessitate an increasing
reliance on a UC solution based on an HQ network

As pointed out above, nearly as many end users, 53%, believe that the reliance on
mobile solutions will increase in the next 24 months. The need for mobile
communications is driven by changing working patterns. Just under half of end users,
46%, believe that the number of times that they or their colleagues work outside the
office will increase. Hence, IT managers should consider mobile solutions like WLAN
or WiMAX or even femtocells and picocells to be part of emerging UC solutions.

Actual Communications Methods and Features Used Versus Methods
Wanted
Comparing end-user responses about the communication methods they say they
want to use with their actual usage of them reveals the scale of the potential for UC-
style applications such as collaborative working and virtual teams.

The survey suggests that the greatest potential is for a solution that allows the
forwarding of calls to coworkers or business partners with all the relevant information
attached. The difference between demand and supply stands at 26%, as Figure 4
indicates. The second largest opportunity, with a difference of 25%, is for solutions
that enable audio, Web- or video-conferencing session setup with a single mouse-
click. The possibility to instantly communicate with a coworker regardless of time,
location, or method comes in third with a difference of 21%.


FIGURE 4

Actual Communication Methods Used Versus Methods Wanted
as Expressed by End Users

100% 11%
89%
90%
21%
80%
26% 78%

70%
70% 64%
25%
60%
49%
50% 45%
38%
40%

30%
20%
20%

10%

0%
Instant communication with Forwarding a call to a Accessing email, fax, and Set up of an audio, Web, or
coworker(s) regardless of coworker or business voicemail from a single videoconference with a
time, location, or method partner with all the relevant interface single mouse-click
information attached

Ways of communications used at work Ways of communications wanted at work

Source: IDC, 2009

The ability to access email, fax, and voicemail from a single interface is most in
demand, but has the smallest potential with a difference of 11%. This is because
unified messaging is effectively already a decade old and fairly widely implemented.
The extra demand relative to supply is hence smaller.

The survey also compared the demand for and existence of communications features
at work. As can be seen in Figure 5, the highest unsatisfied demands among end
users are for reliable data backup and high fixed and mobile voice quality. However,
this demand has been recognized by IT departments and most businesses have
solutions in place to address them.


FIGURE 5

Demand For and Existence of Communication Features at Work
as Expressed by End Users

90% 25%

80% 77% 78% 77% 22% 22%

20% 20%
70% 66% 66% 19%

Desire for less existence of features
63% 63%
60% 59%
60% 58%
16%
14% 15%
50%
12% 13% 44%
41% 42%
11% 40%
40% 38%
10% 10%
31%
30%

20% 20%
20% 18%
5%
10%
10%

0% 0%
Automatic High fixed Reliable back Convergent High mobile Conference Click-to call Collaboration Presence Single-sign
least-cost voice quality up of data device for voice quality calls session tools functionality on
routing making calls through
mouse click

Technical features available at workplace Technical features wanted at workplace Difference

Source: IDC, 2009

When comparing demands and the availability of features to address them, the
largest difference emerges in other areas. 42% of end users want single sign-on, but
only 20% say they have this feature available to them at their workplace — a
difference of 22%. 63% of end users want presence functionality, but only 41% say
they have access to it — also a difference of 22%.

A difference of 20% can be found for collaboration tools, and there is a 19%
difference for click-to-call features. IT managers should work on solutions that target
these high-difference features. These features also offer providers a real potential for
differentiation.


BENEFITS

Pain Points and Issues

IDC believes that IT managers turn to UC primarily to address short- to medium-term
pain points. The most important of these is the deployment of a more cost-efficient
telecoms infrastructure, as Figure 6 shows. IDC believes that the macroeconomic
financial crisis will accelerate the pursuit of this goal.

The second most important pain point that IT managers need to address is the
establishment of a better quality of service for their company's communications
infrastructure. In addition to quality connectivity, this means fewer breaks between
various communications devices, applications, and solutions through more seamless
communications. Telecoms service providers are well positioned to address the two
most important drivers for UC projects due to their deep network management skills.

FIGURE 6

Pain Points and Issues Addressed by UC Solutions in the Minds
of IT Managers

Cost reduction through more efficient telecoms
10.0
infrastructure

Better quality of service (QoS) 9.1

Improve customer service 8.2

New ways of working to increase productivity 5.0

Focus on firm's core competencies 4.5

Conscious strategy to alter business processes 3.2

- 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0

Source: IDC, 2009

The third most important pain point for IT managers concerning UC is the desire to
improve customer service; i.e., better customer acquisition and retention
mechanisms. Only half as urgent as the prime concern is the desire to establish new
ways of working to increase productivity. Less important still is the role of UC to alter
business processes.


Integration of Communications and Business Processes
Figure 6 highlights, in IDC's view, that the long-term concept of communications-
enabled business processes (CEBP) is still in its infancy in Germany. This
observation represents a disconnect between the end user/IT manager and provider
viewpoints. Many providers and analysts are preaching the value of UC as an enabler
and transformer of business processes. However, this message has not yet been
recognized or accepted by the target audience.

Although IT managers list short- to medium-term issues as the main reasons for
rolling out UC solutions, IT managers do clearly recognize the long-term implications
of UC for company communications. Nearly two-thirds of IT managers, 69%, say that
communications will be integrated into their firms' business processes.

Ultimately, the concept of communications-enabled business processes is most likely
to alter not only communications infrastructures but also communications cultures.
Only one-third of IT managers see the need for communications to be siloed beside
other silos like CRM and ERP in the future.

Vision for Communication Solutions

The feeling that future communications solutions will alter things significantly is
shared widely. Only a small minority of end users and IT managers, 27%, believes
that everything will stay the same. The vision of end users and IT managers in terms
of what communications solutions might achieve centers on improved customer
relationship management (61%), productivity enhancements (58%), and collaborative
working (53%).

CHALLENGES AND CONCERNS

Main Challenges to UC

There is a major human concern among end users regarding future communications
solutions. While end users and IT managers clearly recognize the benefits UC and
future communications solutions can deliver, 50% also fear that UC will result in more
stress because everyone will have to be available at any time. This fear is most
pronounced among the older employees (62% among the 50+ age group). It is the
responsibility of businesses with UC solutions to introduce UC in a manner that
shows the potential to reduce rather than increase stress levels — if used correctly.

As Figure 7 highlights, for IT managers, upfront investments in UC solutions
constitute the biggest challenge. The global financial crisis and more pressing calls
for greater cost control further underline this challenge. It is therefore essential for IT
managers to get their total cost of ownership (TCO) and return on investment (ROI)
pitch right when discussing the UC solution with the their firms' CEO or COO.


FIGURE 7

Main Challenges to UC in the Eyes of IT Managers

Too costly 10.0

Staff does not see value of UC / no demand from end users 8.8

Too complex to implement 7.6

Technology not ready yet 7.6

Budget for UC project has been put on halt as result of global
7.6
financial crisis

No single department has clear responsibility to take on UC 6.0

Top management (CEO, CFO, COO) 5.7

Uncertainty within IT department regarding benefit of UC 3.6

- 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0

Source: IDC, 2009

However, if IT managers can provide a credible TCO or ROI story, the headline
investment cost of the UC solution can melt into the background. Both UC providers
and IT managers have to demonstrate clear business benefits and a lifetime cost of
the solution. Moreover, IDC believes that UC providers and IT managers must work
on new charging models. IDC sees leasing models for UC — "UC on credit" or "test
free now and pay later" approaches — as the most obvious ways to address the
funding challenge of UC projects.

The second most pressing challenge for UC adoption is that end users do not see the
value of UC. In order to counter low demand from end users, both UC providers and
IT managers' must engage in additional education and training that makes UC
benefits more explicit and relevant to end users. This form of "UC lobbying" can take
many shapes, involving solution road shows, executive events, conferences,
roundtable workshops, end-user forums, white papers, or traditional advertising.

IT managers ranked uncertainty within the IT department regarding the benefit of UC
as the lowest challenge. This demonstrates that IT managers themselves do not
represent a barrier to UC deployment and adoption.


Aspects End Users Dislike About Their Firm's
Communications Solution

When end users are asked about the aspects of their firm's communication solution
that they dislike, they point to a scenario where they have to download or buy their
own communications solutions in order to do their work. This issue clearly highlights a
problem in the communications policy of several businesses. However, IDC believes
that IT managers can exploit this concern by designing complete UC solutions that
preempt such scenarios. Essentially, IT departments should turn into more service-
oriented divisions.

The second most important of end users' dislikes about their firm's communications
solution is overly strict security policies. This is probably being driven by the fact that
many companies do not allow their staff to use sites like YouTube, Skype, MySpace,
etc. Given that the 20–34 year old group uses work PCs a great deal, the most
effective UC solutions should strike a balance between the end user's desire for real
freedom to communicate and legitimate corporate security concerns. IDC believes
that businesses that ignore or downplay such issues during the UC planning process
are unlikely to reap all the potential benefits that UC promises.

End users' third greatest dislike relates to devices that are perceived to be unfit for
purpose. IDC believes that functionality ignorance rather than faulty technology is at
play here. In other words, many employees only use a fraction of the capabilities
offered by their business communication devices. Therefore, one of the best ways to
address this issue is to improve training.

Businesses with UC solutions should encourage employees to investigate the
functionality of their devices and offer as much training as possible. Businesses with
UC solutions do not get exposure to the "prosumer" community, where many
innovative UC applications are being used in a semi-professional manner. These
relationships are often owned by carriers or retailers. Therefore, it is an important task
to try and get UC usage-related information across at the point of device introduction.

End users hate having to try multiple communications channels to find people when
they need them. This aversion is particularly pronounced among the 20–34 age
group. UC offers great potential to address this concern.

The survey indicates that female employees are potentially more demanding of their
firm's communication solution than their male colleagues. The relative discrepancy
between male and female employees is particularly pronounced in two areas: female
end users dislike communications systems that have too many features that they do
not use; and female end users dislike having to manage multiple sources of
communications more than their male colleagues. UC offers great potential to
address these concerns.

Technical Issues That Irritate End Users
When end users are asked which technical issues irritate them the most, applications
that run very slowly or crash come up top, with female users being slightly more
irritated by this phenomenon than their male colleagues. Slow email is the second
most irritating technical issue facing end users.


Male email users seem to be less stressed by slow email than their female
colleagues. These observations highlight the benefits of a UC HQ network
infrastructure. Males are more aggravated by poor mobile voice quality than their
female colleagues. Similarly, males get more annoyed than females when having to
handle multiple telephone numbers for multiple devices.

Although not among the most infuriating technical issues, the gender gap is the
widest when it comes to being able to handle telephone interfaces. Males are more
disturbed by a fixed or mobile telephone interface that is difficult to handle than
females. In simple terms, females tend to have a preference for speed, while males
demand simplicity.

The survey highlights that older employees find poor fixed-voice quality a great deal
more irritating relative to their younger colleagues. IT managers who implement VoIP
as part of the UC solution should pay particular attention during the VoIP migration to
this employee segment since they are potentially some of the strongest UC
advocates within the organization.

IMPLEMENTATION

Status of UC Implementation and Plans for
UC

While IDC has seen a rough doubling of UC installations by German businesses
between 2007 and the end of 2008, the total number of businesses that have installed
UC remains a minority at 36% as can be seen in Figure 8. Of the 64% of businesses
that report that they have not yet installed a UC solution, only 21% have plans to
implement UC — and two-thirds of those have no short-term plans but a 1–2 year
time horizon or longer for their UC rollout plans. Put differently, the tangible potential
for UC in the medium term is only around 57% of businesses, with the remainder
having no concrete plans for UC. UC providers and IT managers clearly need to focus
on making a stronger business cases regarding the benefits that UC can deliver.


FIGURE 8

Actual UC Implementation and Plans for UC

Percentage of UC implementations by companies

No
64% Plans to implement UC in company

Yes
36%

Yes
21%

Timing of UC implementation No
79%

< 6 months
13%
6 to 12 months
13%

12 to 24 month
74%

Source: IDC, 2009

Measuring UC Performance

Companies place the availability of the UC solution ahead of all other key
performance indicators (KPI) for measuring UC performance, as can be seen in
Figure 9. IDC sees this as a key opportunity for telecoms service providers and
telecoms equipment vendors to differentiate their UC solutions from those offered by
software firms. The end-user expectation for availability of voice communications is
set at 100% — the legacy of the PSTN/TDM world.

Any software-based UC applications are only as reliable as the network infrastructure
they depend on. The gradual migration by companies towards an IP-based network
infrastructure and the migration towards VoIP means that communications are
becoming an integral part of a firm's IT infrastructure. IDC believes that a main
challenge for software firms with UC offerings is to meet "traditional voice
expectations" of 100% availability. End users will never tolerate the "reboot your
phone" approach as a viable way to resolve voice communications issues. Telecoms
service providers and telecoms equipment vendors should therefore score well in the
"availability of the UC solution" area against UC competition from software firms.


FIGURE 9

Key Performance Indicators for Measuring of UC Performance

Availability of the UC solution 10.0

Client/customer satisfaction 9.4

Direct IT and telecommunications cost savings 5.9

Higher return on assets 2.9

Employee productivity increase 2.4

Number of dropped calls reduced 1.2

UC user satisfaction 0.6

Reduced capex 0.6

- 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0
Importance (1-10; 10 = most important)

Source: IDC, 2009

The second most important KPI for measuring UC performance relates to client and
customer satisfaction. This is linked to the observation that one of the most important
pain points that IT managers need to address is the desire to establish a better quality
of service for their company's communication infrastructure. If a UC solution fails then
it reflects badly on the brand of the firm using UC. Client-facing UC in this sense is a
"mission critical" solution and should not be underestimated by IT managers.

Departments Buying UC

In 52% of instances, the finance department is involved in purchasing the UC
solution. It is therefore essential for IT providers to get the TCO and ROI pitch for the
UC solution right. The macroeconomic financial crisis may turn this into an even more
pressing issue.

In about 45% of instances the procurement department is still involved when
purchasing the UC solution. It would be wise for IT managers to keep procurement
firmly involved in any selling process. In many respects, the relationship with
procurement should be among the most important relationships, and maintaining it
should be a priority.

Importantly, operational departments are involved in 41% of UC purchases. This
figure increases to 66% for those companies preparing to buy UC solutions. Hence,
IT managers must be able to demonstrate how UC benefits operational requirements
and helps to improve business processes. This point is particularly important given
what we mentioned above about the disconnect between providers and users in
terms of UC and business processes.


The selling process of UC solutions therefore throws up many more challenges than
the traditional communications portfolio. Many more departments are involved. Often
these departments fail to cooperate and exchange information regarding the UC
implementation, thereby potentially slowing down or undermining an entire UC
project.

IDC sees a role for IT managers as central negotiators between various internal
departments and UC providers. In the marketplace IDC observes that the successful
UC provider tends to go into a large corporate customer as a team. That team usually
contains someone who is going to lobby the sourcing department or the ICT decision-
makers. The team also comprises a technical account manager who goes in and
speaks to the operations manager to explain the benefits of the solution, the
differentiators, and the kind of back-office support they can expect from the provider.
In other words, successful UC providers make sure they hit as many people as they
need to, and they rely heavily on personal relationships across various client-
departments.

Services Needed to Implement UC Solutions

The vast majority of IT managers, 85%, state that they require some form of
consulting services before or during their UC implementation. Of course, UC covers
many different facets of ICT. Telco service providers are particularly well positioned to
provide consulting services in the networking space, such as network analysis and
network planning, as well as network rollout. All UC providers should build up
sufficient skill sets in this space to address this consulting requirement by IT
managers at least partly by themselves, without the help of third-party consulting
firms.

The majority of IT managers, 65%, report that they want help with UC integration.
Telco service providers can offer network-related integration services, such as
integrating various network components. While systems integrators are positioned to
take on a central role concerning many IT-related integration issues during the UC
rollout, and UC solutions with network components rely on network-related integration
as well. Moreover, non-SI UC providers should build up a sufficient systems
integration understanding to mediate between their enterprise clients and any SI
partner that they might have.

Assistance with managed services is required by 43% of IT managers. Although
managed services are of less pressing concern than consulting or integration, a
professional managed services portfolio still constitutes a competitive advantage for
UC providers.

Outsourcing of Communications Requirements

Over two-thirds of IT managers, 73%, state that parts of their company's
communications infrastructure are outsourced. Of those firms that engage in
outsourcing of communications elements, mobile device management ranks highest,
followed by fixed-device management.

Network infrastructure components are also outsourced. As the survey highlights, the
next stage for the enterprise market will be to use UC to communicate better with
their business partners (B2B) and their customers (B2C). This will come in the form of
Web 2.0 and video applications, all driven though a consolidated infrastructure


stemming from the IP PBX. Conversations with enterprise IT managers reveal that
deployment of UC is a topic of intense interest. However, swapping older on-premises
equipment with new equipment to support UC is not popular, especially in the
economic downturn. A hosted IP PBX solution can deliver UC applications with lower
upfront capital investment.

Nearly 40% of IT managers say that they can envisage embracing the concept of
communications as a service (CaaS) in the next one to two years. UC providers and
IT managers should prepare offerings to cater to these requirements as they emerge.

IT managers value outsourcing primarily as a way to help them focus on their core
competence by freeing up management time. The second most valued aspect of
outsourcing for IT managers is to facilitate improvements in IT service delivery and
support business development. These aspects boost the IT department's internal
perception as a source of benefit and value via the creation of an efficient
communications infrastructure.

Types of Companies Seen as UC Providers

IT managers perceive telecoms equipment providers to be particularly well positioned
to provide UC solutions, with 45% of IT managers placing them in the category of
prime UC providers. SIs and software firms follow in second and third place with 24%
and 17%, respectively. Telecommunications service providers, meanwhile, are seen
as prime UC providers by only 14% of IT managers.

IDC believes that this perception does not paint the full picture, however.
Telecommunications service providers play a central role for UC projects, as they
constitute the main channels to market for telecoms equipment providers. IDC
believes that telecommunications service providers should intensify their partnerships
with telecoms equipment providers to leverage their respective strengths in the
network design and management/maintenance space.

Moreover, the fact that many telecommunications service providers have already
begun to beef-up their services divisions, including managed services, should alter
the perception of them among IT managers as more than just plain-vanilla
connectivity providers. Telecommunications service providers are increasingly also
network services providers. As such they are key players in the UC solution provision.


CONCLUSION
UC is about creating a heterogeneous communications infrastructure. End users have
clear personal preferences. In order to attain high usage rates and boost the return on
investment of a UC solution it is essential to address these preferences as well as
train end users how to use the UC solution.

End users are technology agnostic in so far as they already prefer to use
communications solutions that are embedded in the wider IT environment of their
firms. Already, the majority of end users a perceives IT-based communications as the
most valuable communications applications.

Importantly, a high-quality network infrastructure is the prerequisite of a high-quality
UC solution. Many aspects driving end-user demand for and concerns regarding
communications relate to quality of service issues. Telecoms service providers are
well positioned to provide and manage a high QoS network infrastructure with service
level agreements.

UC is in most instances, a long-term project affecting a firm's communications culture
and transforming business processes. IT managers should therefore choose a
reliable partner as UC provider. Again, telecoms service providers are well positioned
to act as reliable partners for UC projects, given their networking expertise, financial
strength, and large partner network with hardware vendors.

Copyright Notice

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approval from the appropriate IDC Vice President or Country Manager. A draft of the
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deny approval of external usage for any reason.

Copyright 2009 IDC. Reproduction without written permission is completely forbidden.


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IDC (sponsored by COLT Telecom): High Quality Network: A Prerequisite for Unified Communication - Germany

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