Voice messaging: figuring the cost to own vs. the price to get

Communications News, August, 1990 by Cathy Cloud

VOICE MESSAGING

Voice messaging is changing the way people in large and small organizations communicate with each other and with their customers, clients, and constituents.

Many companies have discovered an almost miraculous end to "telephone tag"> others have experienced a new "calm" in customer-support, sales, and dispatch environments. A fortunate few have even discovered a way to communicate for half the cost of a postage stamp, and all wonder how they got along without it.

Voice messaging capability is no longer seen as a mere luxury for the elite or early adopters of new technology. Like facsimile machines, voice messaging systems are becoming "de rigueur" business equipment.

Once a company decides to purchase a voice messaging system, the telecommunications manager faces the complex process of sorting out feature requirements, price/performance value, and the myriad configurations available from more than 50 vendors.

Price Seller Trap

To avoid the "price seller trap," the savvy telecomm manager will be aware of the true cost of voice messaging, not just the initial price of buying a system.

The best way to do this is to look first at the "cost of using" a voice messaging system.

For example, imagine comparing prices on compact disc players and eventually deciding on the $359 rather than the $429 model. Saving $70 seems fairly insignificant six months later when you discover that your collection of 42 compact discs has set you back $504. The "price to own" a compact disc player pales over time compared to the "cost of using" that equipment.

A similar situation develops once a voice messaging system is installed. Take ABC Corp. for example.

ABC is a textbook publishing company with 100 employees. While 80 employees work in the Chicago headquarters, 20 sales representatives are constantly in the field. These 20 field reps are spread nationwide and work distinct geographical regions. ABC believes that a voice messaging system will enable the company to stay in touch with these people efficiently and economically.

Rather than start by pricing various systems offered by leading vendors, ABC takes a different approach. It wants to get all the features it needs initially, but, equally important, it must be sure it can afford the cost of fully using the system once it is purchased.

ABC's telecomm manager begins by analyzing current phone usage by the field staff. She figures out each rep is likely to send or receive 10 messages a day, 22 days each month. Next she estimates an average cost of 30 cents per minute for phone connect time.

Overhead Time

While the bulk of ABC's messages will be about one minute in length, the telecomm manager knows that depositing a message or retrieving a message requires "overhead" time.

Leaving a 60-second message (with an average "greeting" time of 22 seconds) will actually require 82 seconds of connect time. Retrieving that 60-second message takes 98 seconds.

An average of 38 seconds of connect time is actually required to "manipulate" the message (e.g. to save it, to discard it or to pass it on to others on the system). Therefore the actual time to leave and retrieve a one-minute message is three minutes.

Ignoring the initial purchase price of a voice messaging system for the moment, the cost of ABC's remote employees using voice messaging with a centralized system is $3960 per month, or $47,520 annually. The telecomm manager must look for less expensive alternatives to avoid this high usage cost.

To lower use costs, ABC's telecomm manager will consider vendors who offer digital networking capability between two or more voice messaging systems.

Messages sent over a full-duplex digital network are transmitted in half the time of a typical analog network call.

Cutting transmission costs in half would save ABC Corp. thousands of dollars each year, bringing the use cost in line with ABC's budget. But, again, ABC must provide voice messaging to 20 employees who are constantly on the move. Where do you install a second system? At least 19 of the 20 remote employees will still be placing a toll call.

For maximum economy, ABC could consider using a voice messaging system that is already in place and digitally networked nationwide (presently, service providers using Centigram's voice messaging systems offer the broadest reach through "The Message Connection" Network).

In this case, each field representative would have access to a mailbox provided by a service bureau located in the rep's territory. These service providers are networked with other service bureaus across the country. By tying the voice messaging system at ABC's headquarters to this network, sending and receiving messages to and from headquarters is always done by placing a local telephone call.

Now the cost of leaving and retrieving a message is reduced from 90 cents to 30 cents per message minute. The cost of using voice messaging to communicate with remote ABC employees would drop from $3960 to $1340 per month. The annual savings would be over $30,000]