The Australian Video Communication Experts

Reducing Travel Costs

The fundamental reason for many organizations investing in video conferencing equipment is to save on travel expenses. In a recent survey of business organizations 80% of the respondents said they use or intend to use video conferencing to reduce travel costs. Respondents confirmed that by diligent use of video conferencing travel cost savings of between 35-40% can be achieved by avoiding repetitive and unnecessary trips.

Trips for initial contact, closing a deal etc are obviously much more productive if you can meet face to face. However both external and internal regular events such as sales meetings or financial reviews can be minimized and replaced by video conferencing, which can save the company serious money especially if several people are required to attend each time.

Large multi national companies have been reported to save many millions of dollars by replacing travel with video conferencing and have done so for several years. Today with advances in technology these economic benefits, in relative terms, are now available to most companies to save travel costs or avail themselves of new distant opportunities.

In an attempt to put the savings in travel costs into perspective the following table is based on two equipment scenarios. The first is using video equipment that allows a single office to conference with one other at any one time (point to point). The second is for more expensive equipment that enables several offices to have a video conference simultaneously (point to multipoint) and connect four offices. The economic logic being that if you can pay for the equipment out of the savings in travel costs then the other benefits, which there are many, are a bonus.

 
  Point to Point Multipoint
Average equipment cost per office $8,500 $9,666
Number of offices 2 4
Travel costs day return $650 $1,850
No of mettings needed to be saved to pay for video conferencing equipment 26 21
Travel costs overnight stay $1,000 $3,000
No of meetings needed to be saved to pay for video conferencing equipment 17 13

This model assumes you have sufficient Internet network capacity for video conferencing.  The equipment costs are estimates subject to options and variations in exchange rate.
The travel costs estimates are Flights $450 return, Hotel $350 and other travel costs $200 per trip.

If you would like our assistance to determine the potential savings in travel costs for your organization (Click Here)

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