The travel budget needs cutting, says the CFO. The corporate -social responsibility people say we have to take this green agenda seriously. HR reports that the latest polls have executives bleating about how much time they’re spending on planes. Smaller local subsidiaries think they’re not getting enough face time with company leaders. What are you going to do? For some CIOs, the answer lies in a relatively new concept called telepresence.

If you’ve even heard of telepresence you probably think of it as the latest incarnation of videoconferencing, and you’d be right – up to a point. Telepresence combines the latest software, video, audio, screen and networking technologies to create a collaborative experience that its supporters say is as close to a face-to-face physical meeting as it gets.

OK, so you usually need a dedicated room to get the best out of it, but the big factor in favour of telepresence is that it cures a lot of pain points currently being felt by large organisations. Let’s examine them one at a time.

Tangible savings

The first benefit is cost. Supporters say tele-presence can drive savings right to the bottom line by reducing travel expenses. For a one-off capital expenditure of £15,000-£150,000 plus an ongoing maintenance fee, companies can take massive chunks out of their travel purses.

“The easy way in the front door [for telepresence sales] is to say: we can save your travel budget and give you payback in four to eight months, and that’s no BS,” says Marc Trachtenberg, CEO of Teliris, a leading provider of telepresence services.

“Other people say: ‘Never mind the travel saving. When I speak to one of my pharmaceutical research and development bosses, he says I’ve taken three months out of the development cycle for a new drug’,” Trachtenberg adds.

Paul Bradley, HP collaborative solutions business manager and the man responsible for the firm’s Halo telepresence system, confirms that the cost-cutting power of telepresence is making it an attractive strategic investment.

“It lowers operating cost and at CXO level they see the value of doing things faster, whether that’s acquiring companies or expanding, or examining how they do inter-company collaboration and the whole question of ‘How do I connect to my supply chain?’.”

Ray McGroarty, solutions marketing director at Polycom, which also provides voice and videoconferencing systems as well as telepresence, agrees.

“We’re finding that with telepresence in our portfolio we’re getting access to the C-level to a greater extent than ever before,” he says. “In the past it was driven out of the telecoms unit but because of the cost reduction it can achieve it’s becoming interesting to senior executives too.”

Users of telepresence systems say that it might only take a few deferred business trips to claw back the initial installation cost of the system. The equation is being helped by falling prices of telepresence technologies, according to HP’s Bradley. “Displays, cameras, codecs and management software are all falling in cost and we’re going to see other suppliers providing capabilities,” he says.

Trachtenberg illustrates recent price drops at the low end. “Today it’s $35,000-$300,000 but three months ago it was $175,000-$300,000 [for a telepresence system].” However, he warns not to expect too much of a price crash.

“[Analyst firm] Frost & Sullivan says this will be a $1.5bn market by 2013 with 16,000 units worldwide. That’s not the iPod, so there are only so many economies of scale. It will come down in fits and starts, maybe five to 10 per cent per year. It’s not a Dell model. Price will go down, yes, but not by 50 per cent a year.”

Quality controlled

The second reason to invest is the fact that the experience of telepresence is a vast improvement on desktop or even room-based videoconferencing thanks to razor-sharp images, high-fidelity audio and precise synchronisation. This means that subtle but important gestures – smiles, nods, winks and shrugs, for example – can be interpreted in just the same way as in a physical meeting. Documents on desks are legible and it’s very obvious when speakers are flustered, unhappy or nervous.

“You can change the way people interact,” says Teliris’s Trachtenberg. “The fundamental difference is that telepresence is an emotional experience. It’s a totally different experience from videoconferencing, which has not replaced the need for travel and the need for interaction. Telepresence is an environment that allows people to feel they’re in the same room. It’s not the difference between brown bread and white bread – it’s a fundamental category shift. The key difference [to other forms of conferencing] is there’s nothing to touch, there’s no technical interaction. If you go to a conference room for a face-to-face meeting you don’t comb your hair, you don’t fiddle with kit, and you shouldn’t with telepresence either.”

Polycom’s McGroarty agrees that telepresence brings virtual meetings one step nearer to being in the same room. “The reason most people travel to an office is to enable ad hoc decision making. That type of behaviour needs to be carried forward into the world of virtual meetings,” he says.

And then there are the softer factors. Being seen to spend heavily on air travel is increasingly being frowned up on by ethical buyers and investors. Any reduction in plane travel will be appreciated by CSR committees but that reduction will also improve the work/life balance of erstwhile frequent fliers.

“Modern enterprises have diversified and opened offices close to their customers,” says McGroarty. “You can jump on a plane and manage that way but it’s a lot more time consuming than ever and there’s a lot of work being done to cut carbon footprints. People say ‘we have to be seen to be doing something around carbon footprint because our most senior person stood on a stage six months ago and said we would’.”

Finally, telepresence is emerging as an attractive candidate for contingency planning. If there is a major problem that prevents business travel, telepresence provides a way for the show, and the meeting, to go on.
However, although telepresence is a compelling technology, it is only scratching the surface of its potential. And even without the issue of price, there are some concerns. Interoperability remains a thorny subject, for example, with vendors throwing brickbats around, alleging proprietary behaviour that degrades the telepresence experience when users want to mix and match kit from various suppliers.

But generally there is plenty of optimism for a market that is growing quickly and changing fast. Teliris’s Trachtenberg says that telepresence is part of “a multi-stage approach to immersion. There are many building blocks. We have added to telepresence a new platform called immersive collaboration that allows you to share content with people around the world as if you had a piece of paper sitting between you.”

Tools of the trade

Trachtenberg is also excited by table-top systems that help to further engage telepresence users by providing virtual flip charts, whiteboards and other tools on a flat surface, and will ship its first patented product in the category in September.

Lighting up British American Tobacco

David Sampson, head of IT at British American Tobacco’s headquarters in London, says the company is so delighted by the impact telepresence has had that it has even created a video to celebrate the success story.
For Sampson, the deployment of Teliris’s telepresence systems in conjunction with Orange Business Services is critical to an underlying change in the way BAT runs its global business.
“BAT operates in 180 countries and we’re in the process of transferring from a federated approach to being a global enterprise,” he says. “Part of that move is that there’s an awful lot of travel going on in order to get access to experts from all over the world. We’re looking to leverage that expertise above the level of a local market. The fundamental challenge is: how do you move to a global enterprise without increasing your cost base and environmentally driving the wrong behaviour of having people on planes all the time? Also, how do you do that for people to be in charge of when they work and when they relax?
“Like lots of corporates we’ve invested in videoconferencing but it wasn’t a sufficiently compelling solution to allow people to collaborate and stop them getting on planes. Videoconferencing is a very useful addition to travel but telepresence makes travel go away – by preference people will use telepresence. They get all the advantages without the disruption. They’re reporting that they’re getting on fewer flights and it’s improving work/life balance. There’s no question that face-to-face meetings are still useful. If a senior executive is going to meet a government finance minister, the handshake and the personal warmth are just as important as the conversation. If the primary purpose is to form relationships, meet. If it’s to conduct business, use telepresence.
“If you add to the travel cost savings the cost of management time, the benefits start to add up. There hasn’t been much resistance. We’re treating people as adults and letting them make their own decisions. Once people have seen telepresence they realise what they can do without the jetlag, packing bags and clearing security.
“There’s absolutely no weakness in the technology. There’s a coherence between the sound of my voice and when I move my lips. You have the immediacy and fluidity you don’t get with videoconferencing. You can even talk over each other.
“With a conference call you have to dial in when it bleeps, the line drops and you have to go into it again. With telepresence everything is checked. You just walk in, sit down and start talking.
“We use it for executive coordination and business operations meetings. We have these large global meetings where all the senior guys and girls get together to talk about the future strategy of the company. We can hold regional meetings, using a local telepresence hub for example to connect Japan to Sydney. We’ve discussed holding analyst meetings, or if the FD is doing a presentation, what about broadcasting that out to the company?
“The feedback has been overwhelmingly positive. We’ve made it so we have the same colours, tables and light levels in the different locations. We use tablet PCs and we’re looking at the surface technology so you can pass over a document like in Minority Report.”

“If you look at the Microsoft Surface PC product it’s great for entertainment but our system allows a PDF or live video to be pushed across the table as if users were pushing this content across the world,” he enthuses.
Polycom’s McGroarty sees increased quality coming. “As HDTV continues to drive the consumer experience higher, we’ll at least have to follow that and improve the naturalness of telepresence,” he says. Sound will also improve thanks to ‘zonal audio’ so that sound is directed to reflect the screen location of the person speaking on the telepresence system.

Many in the industry also predict a fundamental change, with telepresence moving to service centres rather than having to be located within company offices. Hotels, airports, train stations and conference centres could be equipped with telepresence suites so users can set up sessions without having to be at an office or make capital expenditure on equipment.

Some whisper that well known airlines could even run these centres as an adjunct to their core business of transporting people. In this way, more of us will be exposed to telepresence and virtual meetings could become as much a fabric of the way we communicate as mobile phones, email and instant messaging are today.

Telepresence unites unions

Telepresence might be associated in most people’s minds with high-powered big business but it has also had a fundamental role at Unite, the UK’s biggest union that was created through the merger of Amicus and the Transport & General Workers Union.
Unite ICT director Dominic Hook selected a Tandberg system and is impressed with the way it helped the union combine with the United Steel Workers of America to create what he says is the “first global union”.
“It’s been key to negotiations and discussions we’ve had around the agreement, especially surrounding the media campaign,” Hook explains.
“Being able to have a half-hour meeting with Pittsburgh has been really useful. You can look at something in great depth, as if you were in the same room.
“Travelling from Pittsburgh to London is a bit of a pain because you have to go through Chicago or Boston. We’ve had videoconferencing at all of our sites for a number of years. Telepresence is the next step. There are lots of people who have had experience and they’re overwhelmed.”