Telecommunications Services
Videoconferencing - Cost Justification
Videoconferencing is an exciting new cost-effective way to communicate.
Anything that is normally done in a business meeting, excluding reaching
out and shaking the hands of the participants at the distant site,
can be done over videoconferencing. Videoconferencing has numerous
applications such as staff meetings, vendor meetings, distance learning,
training classes, telemedicine, court arraignments, and public hearings.
All of these applications are different in nature, but all have the
same result when properly conducted over videoconferencing. That
result is cost savings and increased productivity.
Listed below is a worksheet devised by VTEL Corporation, a major
manufacturer of videoconferencing equipment. This worksheet will
help you in determining the savings that videoconferencing can
produce for your company, educational institution or state agency.
Copyright 1995, VTEL Corporation. All rights reserved.
Meeting Costs
(Wages) |
Conventional
Meetings |
Video-
conferencing |
A. Number of meetings per year that involve
travel? |
600
|
---
|
B. Number of meetings that could be videoconferenced
(Usually 50% of A) |
300
|
300
|
C. Meeting length in hours (Videoconferencing
tends to be 20% shorter than face-to-face meetings). |
2.5
|
2
|
D. Average number of attendees for your
company/agency. |
4
|
4
|
E. Number of attendees who travel. (usually
50% of D) |
2
|
---
|
F. Average hourly wage of attendees.
(salary+benefits/1900 hours) |
$20
|
$20
|
G. Annual meetings cost. (B x C x D x
F) |
$60,000
|
$48,000
|
|
Travel Cost
|
Conventional Meetings
|
Videoconferencing
|
H. Number of round trips (B x E) |
600
|
---
|
I. Average cost per round trip (total travel costs;
ground, airfare, meals, and lodging) |
$50
|
---
|
J. Annual travel cost (HxI) |
$30,000 |
--- |
|
Lost Productivity Cost
|
Conventional Meetings
|
Videoconferencing
|
K. Average travel time in hours (time to travel to
and from remote site). |
6
|
---
|
L. Percentage of non-productive time
while traveling. |
100%
|
---
|
M. Average traveler wage/hour. (F) |
$20 |
--- |
N. Number of round trips. (H) |
600 |
--- |
O. Lost productivity costs. (K x L x M x N) |
$72,000 |
--- |
|
Videoconferencing Costs
|
Conventional Meetings
|
Videoconferencing
|
P. Hours of Videoconferencing (B x C) |
---
|
600
|
Q. Equipment/facility costs (P x $20
average cost per hour x 2 rooms) |
---
|
$24,000
|
R. Transmission costs (P x $50 average cost per hour) |
--- |
$30,000 |
S. Videoconference costs (Q + R) |
--- |
$54,000 |
|
Total Costs
|
Conventional Meetings
|
Videoconferencing
|
T. Costs conventional meetings (G + J + O) |
$162,000
|
---
|
U. Costs videoconferencing
(G + S) |
---
|
$102,000
|
V. Net savings with videoconferencing (T - U) |
--- |
$60,000 |
Explanation of Categories and Formulas
Blank Cost Justification Form
Back to Videoconferencing |
