Rise of “enterprise video” creates challenges for finance

29th September 2011

Never before have so many finance professionals needed to know so much about so many technologies, and their potential impact on the organisations they work with and for. But the pervasiveness of video creates some special challenges for finance people, as end users and authorisers of information technology (IT) investment. FSN writer Lesley Meall considers some of the emerging opportunities and challenges: from cost control, through content management, to converting investment into business value, and talks to analysts about the ‘best practice’ approach.

 

Business use of video is going through a transformation. It’s no longer reserved just for training or conferencing (though use in these areas remains significant); creating recorded and live content is no longer the preserve of experts; decisions about buying are not restricted to the IT department or specialist users; even the smallest organisation can now exploit it online to enhance its corporate image and its communications with all sorts of stakeholders and potential stakeholders. But because video technology is so accessible, its use is not always reflected in appropriate business processes, controls, and strategies. 

‘Metrics measurement is not as good as it could be,’ says Hyoun Park, an analyst with Aberdeen Group. His recent research into enterprise video use revealed some ‘strong weaknesses’ in businesses attempts to measure its effectiveness – operationally or financially. ‘The value proposition often relates to travel,’ says Park, but less than half of the organisations using it to reduce travel are measuring the associated return on investment (ROI). ‘I found this casualness surprising,’ he tells FSN, adding: ‘The positive feedback from users seems to be self sustaining, but it isn’t necessarily based on quantitative feedback.’

Not measuring ROI is easier to understand for some other applications: Aberdeen’s survey found that the main driver behind enterprise use is not travel reduction, but the need to accelerate the speed at which information passes through the organisation. It also found some emerging uses that reflect video’s increasing pervasiveness as a means of communication and collaboration. In a quarter of cases, the main reason for use is to improve departmental productivity (in areas such as IT and product development), with better engaging a distributed workforce and improving collaboration within the enterprise not far behind, followed by brand differentiation. 

Some of these exploit video to share information outside the enterprise: ‘It’s especially valuable in business to business sales and marketing scenarios,’ reports Park, but he is keen to point out that ‘most of the key pressures for video use in business are based on internal needs’. You might suppose that this means that there is less need to adopt high production values when videos are created to disseminate information, but this is not so. Aberdeen found that best-in-class companies (which can generate an average 264 per cent annual ROI from their deployment of video) are inclined to invest in the training of those using it. 

If Aberdeen’s research is anything to go by, this is not the only area where the best performing organisations are being more proactive. ‘By comparison with their peers, they are a lot more likely to be using video in a way that improves business outcomes,’ says Park, for example, by considering how the use of video can accelerate training, improve support, or enhance the visualisation of new concepts or products. ‘The action-based video principals that give consumer video traction can also be applied in the enterprise environment,’ adds Maribel Lopez, an analyst with Constellation Research. ‘Video is a more effective and efficient way to provide remote instructions or illustrate how to fix a piece of equipment, for example.’

Organisations that are getting the most from their video deployments are also differentiated by their aapproach to content access. According to Aberdeen, by comparison with their less well performing peers, they are  more likely to take steps to align content creation and consumption, and create a context for it, rather than just facilitating the creation and collection of videos into one single and undifferentiated knowledge base. ‘Creating video is a snap, but searching for video is hard,’ explains Leslie Owens, an analyst with Forrester Research, so its exploitation in the enterprise requires specialist support – in the shape of people and software tools. 

‘Video is not a fringe format anymore,’ says Owens, ‘and Forrester expects that content and collaboration professionals will supervise the life cycle of video (from creation to disposition) as part of a comprehensive information strategy,’ – and the search tools they provide for those consuming it will need to support role-specific, contextual search from any location and device and on any location and device. ‘People move and video can move with them,’ says Lopez, who sees the spread of portable devices such as tablets and smartphones (and the high quality video capture they increasingly offer) offering visionary enterprises all sorts of potential new uses. 

‘The best video implementations will create mashups with other software such as augmented reality, CRM, and maps to create new and more powerful services,’ says Lopez, creating business value by improving services and better utilising knowledge and skills. ‘A field technician could use his tablet’s camera and an augmented reality overlay to identify a piece of equipment at the customer site, and then overlay a list of the most frequent technical issues on the image,’ she suggests. This could link back to a corporate database containing manuals and video tutorials, or connect the technician to the last repair person, by video, so they can work together. 

But before they can make this leap into the future, many organisations will need to look more closely at how well their existing deployments of video are performing, and assess their success on something more than soft feedback from end-users. A change in adoption methods may also be needed, for video’s full potential to be realised. ‘A lot of new technologies and use cases are peer-to-peer and they come into the enterprise as experiments or at a low price point,’ says Park, and the decision is often made by line managers, not IT managers or even IT staff – which can create avoidable barriers to success, such as not being able to get the technology to work. 

Deploying and integrating video into an IP (Internet Protocol) network is relatively easy, particularly by comparison with the past, when more traditional technologies required different delivery methods – from dedicated coaxial cables to satellite. But different video media applications still have different networking characteristics, and as video traffic increases it can exacerbate network weaknesses. Whether you have opted for a high definition videoconferencing application, or have staff making impromptu desktop-to-desktop video calls, there are implications for bandwidth and quality of service, and issues such as jitter, latency and the need to joint stream to multiple endpoints may require specialist network/infrastructure management. 

‘Enterprise video conferencing products don’t always play well with Skype, for example,’ explains Park, which is more than just a problem with incompatible technology, if the business needs to be able to support video interaction with key customers or suppliers. So at the pre-purchase decision-making processes could benefit from more technology input, and a view that looks beyond individual use cases. ‘It’s not always about what’s cheapest or easiest. You need to think strategically about how to get the best value from your investment,’ suggests Park, and managers with responsibility for lines of business are not best positioned for this.

 Although those with IT skills have a potentially valuable role to play, so do finance professionals. ‘Increasingly, we see the CIO reporting to the CFO who will then make the final decision,’ reports Park, so IT needs to understand the language of business more and finance professionals need to understand a little about a lot of technologies. ‘With the technology decision-making process increasingly financially managed and motivated, it’s important for senior finance people to understand the ways in which technology such as video can reduce costs and add business value,’ he says, and then ensure that implementations are monitored and measured. As he adds: ‘Businesses need to be more careful about how they define benefits and metrics.’

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