How to budget for videoconferencing equipment?

Cost is always relative with any capital purchase.  When video conferencing technology first started the cost was very high and there was little if any return on investment.  The good news, costs have come way down and the technology significantly better.  Video conferencing went commercial in the early 1980’s and the first wave of products where indeed expensive.  Compression Labs introduced a $250,000 end point that cost about $1,000 per hour to connect —This required huge resources. This was the only product available at the time until PictureTel introduced a new product offering in 1986.  The price dropped dramatically to $80,000 per end point and operated at about a $100 per hour line fee.  Today you can purchase a high definition video conferencing system for your boardroom for as little as $3,500.00 and cost almost zero to operate if you are using your existing network —   It’s much easier today to budget.

The first consideration is your application.  If you are doing an analysis against the travel budget this is very easy to determine.  In fact we can send you the calculator that will clearly illustrate your return on investment, (click here for calculator).  You can enter any number for the video conferencing budget and it will calculate your depreciation and R.O.I. instantly.  Start with about $5,000.00 and work your way up and you will clearly see the return.  The new mobile app certainly impacts efficiency and production.  If you need expertise on the shop floor and the expert is several thousand miles away you can get a resolution in real time through an iPad2.   Look at what it costs to complete a process efficiently and see where video conferencing can impact.  The decision process in your company accelerates with video conferencing.

Look at what you spend for company vehicles and time on the road to support key accounts or meet with the vendors and partners in the supply chain.  This will give you a real frame of reference for budgeting.   You need to consider the salaries of those who are in production who need meet with vendors; customers; and people in your organization critical to the business.  Write down how many locations you need to connect to within your company.  Find out how many will attend a video conference at each location.   In a small or large conference room you can budget as little as $3,500.00 for a system.  If you require a mobile app to connect to those who don’t have video conferencing, you might budget under $20,000.00 for your main conference room.  If you want a mobile app and $20,000.00 is too much, you can always use a hosted service for mobile video conferencing from your boardroom.  Contracts generally run by the month or by the year.   If you are getting quotes make sure the vendors clearly state the capabilities of their video conferencing offerings so you are not disappointed later.

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