April 1998

BY CHERYL ALVAREZ

With the growing deployment of video conferencing in the corporate enterprise, companies are beginning to demand the ability to manage and allocate costs associated with video calls in the same detailed manner that they analyze their telephone bills. They want to be able to choose network equipment from multiple vendors. They don’t want a different set of proprietary management and accounting applications for each brand of multipoint control units, switches, and other access equipment they use now and may use in the future. What they do want is an accurate, uncomplicated, and complete view of their network costs and performance.

MANAGING VIDEO COMMUNICATION COSTS
Accounting departments want to see actual video conference costs sorted by individual, by department, by division, and more. Plus, certain calls may need to be billed to clients. MIS departments want to observe network performance and be able to respond to problems such as an unusual amount of failed calls. CIOs need statistical information to show whether to plan for greater network capacity to support a growing number of calls and handle bandwidth demand. CEOs want graphical reports to show whether growing network costs are justified.

With telephone calls and conferences, a company gets a phone bill at the end of the month, and the costs can then be allocated back to a division, department, or individual. The telecom departments in medium to large corporations have had the PBXs running smoothly for years, with costs being reported, charged back, and managed for nearly as long. This type of call accounting software has been in existence in the voice communications industry for many years, and is just around the corner in the data and video communications world.

Video conferencing product and services vendors are coming up with new ways of scheduling, controlling, and managing video conference calls so they happen as planned. A CIO or MIS director wants all the endpoints connected on a video conference by the time company executives walk into the conference room. Those same managers hear immediately if the video conference failed to perform to the executives’ expectations. They’ll also soon hear if the rest of the organization is having an inordinate amount of trouble with the system. Therefore, the CIO is going to choose vendors that can assure him of reliable performance. They are also going to choose the most cost-effective services, and they should expect detailed accounting information to prove the cost savings.

THE VIDEO CONFERENCE BILL
Your organization may have video conferencing over the LAN, over plain old telephone service (POTS), or over ISDN. Video conferences over ISDN often require multiple BRI channels bonded together for higher speeds and better transmission quality. In this case, bills from the carrier or provider often show several lines of charges associated with just one video conference session. In many cases, organizations have people manually comparing the many lines on the monthly bill against many pages of video conferences schedules in order to allocate costs. For larger corporations that can log tens of thousands of video conference calls per year, this painstaking accounting is obviously not an efficient solution.

Compared to voice calls, there is a much higher degree of failed connections with video conferencing — the bill will show calls of very short duration in that case. CIOs will want to know if there is an unusual number of aborted conferences. Is there a pattern? Are there more problems with one carrier or with certain network or conference equipment?

An accounting system should provide statistical reports on call history — it should show unusual patterns of use, such as calls of short duration, and show patterns that may point to potential abuse. As desktop video-enabled PCs are added to the network, reports may be used to help enforce an organization’s policies — such as encouraging video conferences during off-peak hours to conserve network bandwidth. Video conferencing requires a great deal of bandwidth. Not only do companies need their network running at optimum speed during critical periods, but bandwidth isn’t free! An accounting system isn’t there to enforce policies, but it can provide information to help companies manage their bandwidth and network costs.

Outsourcing Video Conferences
Some companies outsource their video conference services and equipment to service providers or bridging companies. They may receive a more easily understandable bill at the end of the month, but does it provide the detail needed to manage and allocate costs back to individuals and departments? Does it show costs associated with true usage, or are the charges based on how conferences were scheduled to happen? If meetings and video conferences always happened as scheduled, that type of accounting wouldn’t be a problem.

How often have you attended a meeting that began and ended exactly as scheduled? Not sticking to a schedule is a problem even for meetings physically held in one conference room. In a telephone conference, the more lines conferenced in, the will start late or run longer than scheduled. If you’ve ever participated in a video conference meeting, especially one with multiple locations, you’d probably say the chances are even less likely with this medium that meetings go as planned. Companies that outsource their video conferencing services must be especially vigilant about what their true costs are.

TODAY’S MANAGEMENT AND ACCOUNTING
Video conference network equipment vendors make access devices that sometimes include management, reservations, and control software. This software allows video conferences to be scheduled and managed, and sometimes takes control of all that vendor’s equipment involved in a video conference. Vendors have begun to include some proprietary accounting capability in their management software. Some independent software companies also provide video conference scheduling and management software that supports multiple vendors. However, the accounting software available now can generally only allocate and report costs based on what was scheduled to happen — not based on true usage.

Accounting software today obtains schedules from the video conference reservations and management software and provides charge-back information based on conferences as they were scheduled. Some organizations accept allocation of network costs by estimated usage — but others need to know true costs. And of course, this charge back ability is the source of some companies’ revenue.

TRUE USAGE-BASED ACCOUNTING
True cost accounting for video conferencing doesn’t just take information from the scheduling software — it interfaces with the access equipment to get call detail records that show actual usage. Many medium to high-end access switches and control equipment provide one or more call and event records for every conference call. On many large networks, network equipment from multiple vendors is outputting these records in different formats through different methods. An accounting application needs to collect call records of various formats and by various means, and then translate them. The application’s costing engine applies tariffs, discounts, rate multipliers, and other cost factors, and then massages the data into detailed usage and cost information.

This detailed usage information could be imported into the video conference management application, into presentations, or to an organization’s general ledger system. The video conference accounting application should rollup to an overall accounting system for all network costs — data, voice, video, equipment, cable, and future infrastructure.

Soon, the CIO or MIS director will have a concise view of all communications costs, including video conferencing, from one application. Right now there are accounting applications for PBXs, proprietary accounting tools for some large data networking vendors, and limited call accounting applications from some video conferencing vendors. Are these separate accounting applications prepared to deal with new communications avenues such as voice and video over IP? No network equipment or management software vendor currently provides a practical, open network accounting system that helps manage costs in a growing multivendor, multimedia network.

In a perfect world, meetings go as scheduled, don’t cost a penny, and no accounting of video conferencing costs is needed. In the meantime, video conference accounting tool developers will continue to strive to bring an open, true usage-based accounting tool to market.

Cheryl Alvarez is product manager, OEM and Distribution Products at Telco Research. She can be reached at [email protected]. Telco Research is a privately held company based in Nashville, TN that designs and manufactures open, Web enabled data, voice, and video accounting systems for corporate and university network and telecom managers. For more information, visit the company’s Web site at www.telcoresearch.com or call 800-48-TELCO.