What's missing in 'unified communication'?
The Delta Perspective June 2013
The concept of Unified Communication (UC) has existed for more than a decade. However, customers and telcos continue to struggle to implement it in an effective and meaningful way. A distinct lack of a customer-focused perspective on UC is largely responsible for this lacklustre implementation record to date.
Today ‘Unified Communication’ remains a house of smoke and mirrors
Since the coining of the phrase in 20011, ‘Unified Communication’ has been defined in multiple ways. Pulling together a number of the more commonly-used definitions would suggest that “Unified communication and collaboration integrates real-time communication as well as non-real-time communication to route a message to a recipient in the fastest-possible time and/or optimises business processes”. May fortune favour anyone brave enough to attempt deciphering that – and the multitude of other similarly obfuscating ‘definitions’.
Different UC definitions trace their roots to different parts of the value chain, each ascribing to UC the particular characteristics associated with that part of the value chain. Network vendors define UC as an evolution of PBX and IP/PBX while enterprise application vendors define it as a collaboration tool. Telecom operators add further to the confusion; eager to ride the wave of UC hype, they launch solutions without understanding the value to customers or even how the solution constitutes UC. Moreover, industry analysts size the UC market using their own individual definitions and subjective methodology, giving rise to a wide range of market size estimates from $8Bn2 to $45Bn3 (by 2015).
As a result (and understandably so) customers are confused about UC and how it benefits them. According to an InformationWeek4 report , 32% of businesses did not deploy UC due to a lack of perceived, definitive business value.
To summarise, the current problems with UC are:
- Multiple definitions, resulting in ambiguity and a lack of understanding
- A distinct disconnect between telcos and vendors, and customers’ perspectives
Therefore, there is a need to construct a single, customer-centric UC definition
Unified communication should be about… unifying communication
Today everyone has multiple communication identities: phone numbers, e-mail addresses, messenger aliases (e.g. through WhatsApp, Skype, etc.). The flexibility of using multiple communication channels is important to customers. Also, businesses want to optimise their processes by reducing human latency in process flows. Forrester Research5 has shown that 50% of projects are delayed because a key decision-maker could not be reached.
Unified communication should therefore help individuals communicate seamlessly across multiple channels. Also, it should help businesses improve productivity through improved communication. Flexibility and efficiency will be enabled when multiple identities are consolidated into a single and easy-to-use communication identity.
Therefore, UC could be defined as:
"A solution that unifies an individual’s multiple communication identities"
UC should not be viewed as a tool or software, but ‘a solution’ that can be achieved by one or more services. It should focus on enabling communication flexibility and business efficiency. Specific software or technology is only the means to achieve such ends.
Basic unified communication solutions should integrate an individual’s multiple numeric identities, such as mobile number(s), fixed number(s) and/or fax number(s) into ‘one number’. Friends or customers can reach one at home or on the go through this one number. With fixed numbers going rapidly out of fashion with consumers, this level of integration is more useful to businesses. An IDG survey6> found that businesses are more likely to start integrating their communication systems starting with voice‐ or telephone‐centric systems. Also, the rising proliferation of employee devices requires organisations to integrate them with the corporate fixed telephony network. Therefore, business customers are looking for a ‘one number’ service.
The ‘one ID’ set of solutions would integrate multiple digital functionalities such as e-mail, instant messaging, video-conferencing, etc. Such integration would help communicating parties to seamlessly transition to higher bandwidth communication (e.g.: email -> IM -> video chat) through one ID. However, the ‘one id’ environment involves the cooperation of numerous application providers (e.g.: Microsoft, WhatsApp, Skype, etc.) unlike the ‘one number’ environment which is primarily the domain of telecom operators.
The highest level of unified communication solutions should enable a ‘single identity’ for an individual through which he or she can be reached through any channel (phone, email etc). In this environment, a typical address book would only have one identity stored for each individual, for all modes of communication. For example, a call centre can route a customer complaint to the expert through her ‘single ID’ without needing to try reaching her via messenger, e-mail or mobile.
Telcos should build enterprise UC services, primarily through partnerships
A number of players provide communication identities. Telcos mostly provide fixed, mobile and fax numbers. Over-the-top (OTT) players including Google and Skype provide e-mail, messenger and other types of digital communication services. Similar services are provided to business customers by enterprise technology companies such as Microsoft (Outlook for e-mail) and Cisco (Webex for conferencing), etc. If customers look to coalesce their communication IDs, in line with our UC definition, players providing the most value will control the integrated environment
In the consumer space, OTT players including Skype and Google have taken the lead in providing one-ID service. For instance, one can use their Google ID to e-mail, IM or video conference through Hangouts. Though telcos may not have any role in providing the one-ID service, they could however enable a one-number service - integrating residential fixed lines and mobiles. However, with the low fixed penetration in emerging countries and declining voice usage in developed countries, there may not be a strong customer value proposition for a one-number service.
Telcos’ role in the consumer space is thus somewhat limited from a UC perspective.
In the enterprise segment, one-ID services such as e-mail, collaboration and conferencing are dominated by enterprise technology companies including Microsoft, IBM, Cisco and Polycom. The lower-end of this segment, i.e., SOHOs7 and small businesses use similar services from OTTs including Google and Skype. Much like in the consumer segment, telcos have a limited role in providing the one-ID service for businesses.
However, telcos have an important role in enabling the one-number service for businesses. According to a recent, global BroadSoft survey, 75% of businesses request an extension of desk phone features to mobile and a common identity across mobile and fixed phones. Vodafone OneNet is a good example of the value of offering one-number services. OneNet enables businesses to never miss a call through fixed-mobile integration and single voicemail (among other features). The service has had astounding success with c.2 million customers across six European markets since 2008. The imperative is for operators to act quickly or risk being overtaken by enterprise-grade OTT players in this space.
Operators should partner with technology vendors to build single-ID services customised to local business needs. For example, Verizon partnered with Google to launch ‘Virtual Communication Express’ in 2012 for SME business customers9. Among other services, it allows users to make calls with one click from Gmail, Google Docs or Google Calendar. Through the click-to-chat functionality, employees can chat, talk and share docs through a single service. Utilising familiar google applications also reduces training time for SMEs.
Verizon’s solution is a hosted service and priced on a per user basis. Such hosted UC services are a high growth area: the global hosted UC market is growing 30% annually and is expected to reach US$19.7 billion by 201710. Operators report between 5,000 and 20,000 seat (subscriber) acquisitions per month, priced between US$20 and US$200 per seat for hosted UC services.
Offering UC solutions to businesses will help improve their productivity - resulting in happier customers, increased services usage and lower churn for telcos. Therefore, telcos can use UC as a powerful competitive differentiator and a means to maintain more meaningful customer relationships.
How can operators better seize the value potential of UC going forward?
Telco executives need to ask themselves three questions regarding their UC strategy:
- Do we understand our customers’ communication needs, not only from a fixed or mobile perspective but encompassing their total communications experience?
- Do we have a unified communications strategy that is driven by our customer needs and market evolution - or is it dictated by our vendor product roadmap or our legacy technology?
- What is our engagement model with enterprise IT companies (Microsoft, Cisco, etc.) in reference to addressing unified communication needs of SMEs and enterprises?
Building on the answers to these three questions, UC offers value-creation opportunities for telcos. It can be used by an operator to bring valuable services to its customers and a potential avenue to avoid becoming part of the proverbial ‘dumb pipe’. UC solutions should be developed based on the market context, customer needs and backed by a proper business case with clear value to the company and, most importantly, its customers.
1 The term ‘unified communication’ was coined by Art Rosenberg, a technologist and web columnist
2 Radicati group
3 International Data Corporation (IDC)
4 “State of Unified Communications”, InformationWeek, December 2011
5 Forrester’s next-generation communications study
6 “2012 Unified Communications & Collaboration Survey”, IDG Enterprise, March 2012
7 SOHO - Small office/home office refers to the category of business that involves from 1 to 10 workers
8 Operator website
9 Operator website
10 Source: Broadsoft
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