Telecommunications Services

Videoconferencing - Cost Justification

Explanation of Categories and Formulas -

A. The number of meetings held during the course of a year.

B. The number of meetings held during the course of a year that could be displaced by videoconferencing.

C. Estimate the overall, average meeting length. Videoconferences tend to be 20% to 30% shorter than face to face meetings.

D. Estimate the overall, average number of attendees at a meeting.

E. The number of meeting attendees who travel, usually about 50%.

F. Average hourly wage of attendees.

G. Multiply number of meetings by meeting length by average number of attendees by average wage per hour.

Travel Costs:

H. The total trips between the two sites being analyzed.

I. Total travel costs including ground travel, airfare, meals, and lodging.

J. Multiply number of roundtrips by the average cost per roundtrip.

Lost Productivity Costs:

K. The average length of time it takes a traveler to travel to and from the remote sites.

L. The inverse of the time a traveler is actively pursuing work related activities while traveling. If traveler works 50% of the time, the traveler is non-productive 50% of the time.

M. Same as average attendee wage (E).

N. Total trips between the sites being analyzed.

O. Multiply average travel time by percent non-productive travel time by average traveler wage per hour by number of roundtrips.

Videoconferencing Costs:

P. Multiply number of meetings displaced by the videoconferencing meeting length.

Q. Based on average facility/equipment costs.

R. Average costs per hour of usage is $50.

S. Add equipment/facility costs and transmission costs.

Total Costs:

T. Add annual meeting costs, annual travel costs and the cost of non-productive time.

U. Add annual meeting costs and annual videoconference costs.

V. Subtract the cost of videoconferencing meetings from the costs of displaced conventional meetings.

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