The Frequent Traveler: Respite Or Stimulus? Video Still Evolving For Travel Departments - Business Travel News

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The Frequent Traveler: Respite Or Stimulus? Video Still Evolving For Travel Departments

October 31, 2012 - 03:55 PM ET

By Chris Davis

Simultaneously the bane of those who swear to the irreplaceability of an actual handshake and the savior for those who can't fathom one more flight across time zones, videoconferencing and other forms of remote collaboration occupy a unique position in the consciousness of corporate travelers and those who manage them. These technologies undeniably can save travelers time, but few would say they are the preferred method to close a major sale. They undeniably can cut travel costs, but few companies take the step of mandating their use. The result, generally, is a pastiche of videoconferencing uses and users—primarily younger frequent travelers and primarily for internal meetings. Remote conferencing these days is used more frequently than it was before the financial downturn but perhaps less so than some once expected.

[Please click here to view the digital edition of The Frequent Traveler: Finding A Balance, featuring all charted data, downloadable as a pdf.]  

But the technology is being purchased, and it's being used. According to BTN's survey of 400 travelers, 13 percent of respondents don't use any sort of remote conferencing in lieu of travel to internal meetings. And though 2012 thus far has been a rough year for the videoconferencing market, with two straight quarters of declining year-over-year global revenue, "we view the current revenue slowdown as temporary rather than a fundamental decline in demand," according to a September report from Matthias Machowinski, an analyst at market research firm Infonetics Research. "Overall shipments of hardware endpoints are still up by double digits year-over-year, signaling ongoing strong demand for videoconferencing capabilities."

Machowinski in June predicted the videoconferencing market would see "double-digit annual revenue growth through at least 2014, with revenue hitting $5 billion per year by 2016." Though in September he blamed 2012's dismal first-half results on "economic woes in Europe, declines in public sector spending and a shift toward lower-priced videoconferencing products," corporate demand for collaborative technology appears to remain healthy.

Seventy-two percent of travel buyers surveyed by BTN indicated that their companies have a policy to offer videoconferencing or other forms of remote collaboration in lieu of travel for internal meetings as a method to reduce wear and tear on frequent travelers. That was about three times as many as those who indicated their organizations offer measures like increased perks for frequent travelers or the elimination of one-day trips.

Consumer goods conglomerate Unilever, for one, has brought to its employees immersive telepresence technology as well as desktop videoconferencing, according to procurement manager for global travel services Yvonne Moya. "We've invested a lot of money in having facilities in our locations, and we're looking into opening up corporate Skype for videoconferencing," Moya said. "We do promote it as a time-saver."

That's an attractive proposition for many frequent travelers. About 47 percent of the survey's traveler respondents who use videoconferencing indicated they did so to improve productivity, with 45 percent noting as their rationale improved work-life balance, two issues tied closely to saving time on travel. (Traveler respondents were permitted to select more than one answer.)

"People are finding that [remote conferencing] is a very nice way to meet with people, see them and avoid having to get on a plane and deal with all the fun parts of travel," quipped Agilent Technologies director of worldwide travel Cindy Message. "People actually are thinking about it as an alternative, and it isn't just the cost piece of it. They are really thinking, 'What do I really need to get done in the meeting, and can I do it by telepresence as opposed to going to a hotel and catching a flight?' "

Such an embrace of remote collaboration technology isn't shared by all travelers, though, and the survey found a correlation between age and how often it is used. For example, 39 percent of surveyed travelers under 35 years of age "very frequently" use the technology in lieu of travel for internal meetings while 18 percent of those older than 35 do so. Conversely, 43 percent of respondents over 35 use the technologies "not very often" or not at all, compared with 23 percent of younger travelers.

At Google, where a 2011 Payscale study pegged the average employee age at 31, videoconferencing has permeated the workday experience. "Google has an awful lot of videoconferencing in their offices all over the world," according to Google global travel and expense manager Michael Tangney, speaking at a Global Business Travel Association Europe conference in September in Budapest. "There are 100 people on my floor and six videoconference rooms. We also use Google Hangouts. You can do it from your phone, laptop or wherever. In the last couple of years, nobody calls each other at Google anymore. They always videoconference each other. That's just how they talk. It's become completely integrated with the way everybody does business, certainly internally."

Skepticism And Resistance 

Many younger travelers at Google and elsewhere have entered the workforce from a world where video communication is commonplace. In their personal lives, they Skype, they instant message, they video chat. Perhaps most importantly, they don't have the experiences of their older counterparts who for well over a decade heard that videoconferencing was the next big thing, only to find buggy technology that required a great deal of management from IT even when it did work. While today's remote collaboration suppliers would note the progress the industry has made in this area, some perceptions change slowly, and some of those attitudes have hindered corporate acceptance of the technologies.

Steve Cline, COO of travel management company Adelman Travel Group, which offers videoconferencing services to corporate clients, termed the technology's growth as "relatively slow right now." He attributed the slow pickup not only to the fact that responsibility for videoconferencing services and travel management typically fall in two distinct places—IT, and procurement or financial services, respectively—but also some skepticism and unfamiliarity with its potential.

"There seems to be a lot of heightened interest, but very few want to move ahead," Cline said. "They're still looking for more information. Individuals on the travel side aren't familiar enough with it yet. They need to become more familiar, and they want to be sure the specific business transaction can be successfully fulfilled without worrying about technical aspects."

That, Cline said, causes corporations typically to restrict videoconferencing's utility to internal meetings, but he noted that other business activities, particularly hiring and sales, could be served by using the technology early in the process. "Most of our customers have invested in some type of videoconferencing, but it might not be used effectively," he said. "What's the best way to change behavior and get return on that investment? That's what we've been working on so that the decision-making process can be made at the point of sale."

The decision whether to use videoconferencing in lieu of travel today often lies with travelers themselves, and it's a decision that involves many factors, not all of them to the company's benefit. "If you have a frequent traveler who has an alternative once in a while and it's seamless, then they're accepting," Cline said. "The traveler who doesn't travel that often and wants the pseudo-boondoggle, even if it's to meet another employee, is going to be resistant."

In corporations where the traveler has the final say when considering remote collaboration instead of travel, evolving technologies may impact that decision. Will the 47 percent of travel respondents who see videoconferencing as a productivity enhancement feel the same in light of the expansion of services like inflight Wi-Fi, enabling them to maintain a higher level of productivity while traveling? Hard to say, and there likely will be no consensus.

Traveler productivity is a concern of the survey's buyer respondents too. More than a quarter of them cited it as the primary reason their travelers use remote collaboration in place of travel. But even that figure is dwarfed by the 62 percent of buyers who noted as the primary reason the eternal impetus for continued corporate interest in videoconferencing: cost control.

Managing Demand, To A Point 

A number of studies have attempted to develop ROI metrics for videoconferencing. For example, suppliers often suggest potential travel savings of 30 percent or more, and a 2010 study by the Carbon Disclosure Project projected that companies with more than $1 billion in annual revenue would generate enough savings to pay for immersive telepresence within 15 months of deployment.

Many companies have inserted language encouraging the use of videoconferencing, especially in lieu of internal meetings. But even considering the potential savings, very few companies are willing to mandate that use: less than 5 percent, according to a February 2011 BTN survey of 177 North American business travel buyers.

"As far as the travel policy perspective, there is not a mandate" to use remote collaboration technologies, said Unilever's Moya. "We have to promote it to the traveler as, 'what's in it for me?' It is more about open communication and about the advantages than telling people that they must do it. But if your line manager tells you, 'You may not travel, you must use telepresence,' then that's a given, of course."

About 28 percent of traveler respondents cited company policy as a primary reason to favor videoconferencing for internal meetings. Typical policies, though, only highlight the availability of the technology, said Mark Williams, principal of BCD Travel consultancy Advito.

"Videoconferencing policy discussions center around how many people need to be involved, how critical [the purpose of the would-be trip] is. If you're signing a big deal, that's one thing; if you're in the investigatory phase, that's quite another. So clients are picking and choosing where videoconferencing makes sense for them and where they have to be there face to face. I haven't seen any policies that say, 'You will do this.' We see things like, 'Consider videoconferencing, the facility is readily available and it saves money if you believe you can do the meeting effectively through that method.' There are suggestions and guidelines for how and when to use the videoconferencing facility, versus language like, 'You must use it unless [the trip] is to close a deal for $1 million or more.' "

Some companies, though, prompt would-be travelers at the point of sale—be that an agent or an online booking tool—to consider remote technologies if the proposed booking meets certain criteria like availability of videoconferencing equipment in both the departure and arrival point and if the travel would be for an internal meeting. "Based on those prompts, the traveler is going to accept or deny," Adelman's Cline said. "It'll be either recorded as an exception or a cost avoidance, and all that info can flow into travel data."

Proving that such avoidance of travel saves money for the corporation and time for users seems like it would be a simple equation, but Williams said it isn't necessarily so. "If you had a face-to-face meeting, you would send two people but in a videoconferencing you might have six, because there's no marginal cost other than the person's time to bring other people in," he said. "The numbers get skewed."

And even among those corporations whose travelers use remote collaboration technologies extensively, unexpected side effects can arise. Google's Tangney noted that even though his company realized a decline in air travel and associated cost reductions through heavy use of videoconferencing, the longer view is more complex.

"Initially, it had an impact where people were traveling less because they didn't have to travel because they can talk to each other," Tangney said. "But now that they can talk to each more often, more easily and in a more interactive way, it's had a secondary effect: [They're] more inclined to visit the person they were talking to so often and so easily. So, there are two sides to videoconferencing. One of them is when you adopt it initially, you see this benefit of cost reduction in air travel. But four or five years down the line, does it have a compound effect or is it replaced by new types of travel or more travel to particular destinations?"

This report originally appeared in the Oct. 22, 2012, edition of Business Travel News. 

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