Management:

Corporate Strategy for Dramatic Productivity:

 

The Sudden Rise in Web Conferences

and Teleconferences

 

by Professor Emeritus Akira Ishikawa

Aoyama Gakuin University, Tokyo, Japan

Former Dean, GSIPEB

Senior Research Fellow, ICC Institute, University of Texas at Austin

Doctoral Program Chair

 

 

Japanese Market Size: 70 Billion Yen

Web and video conferences between and within companies, as a form of visual communication, are rapidly increasing. By 2007, the market in the United States had expanded to 120 billion yen and the 2008 survey carried out by Seed Planning Corporation (Taito-ku, Tokyo, President Yoshio Umeda) predicted that the Japan market worth 70 billion yen would have grown exponentially to exceed 700 billion yen in 2010. So why are we seeing such a rapid rise in the use of web conferences and teleconferences?

 

The primary reasons are firstly a reduction of transportation expenses and secondly the elimination of traveling times. But that’s not all. As companies become increasingly eco-friendly, they become aware that these means of communication help to cut down on CO2 emissions and provide a way to prevent environmental deterioration. What’s more, in the event of a pandemic, these means of communication can also serve as effective measures. The question is whether, by using this kind of computer network assisted conferencing system, a company can achieve its original business objectives without seeing any drop in operating effectiveness, and whether doing so will lead to sufficient profitability.

 

With regard to the question of improving operational efficiency and productivity, V-CUBE, Inc. (Meguro, Tokyo, President Naoaki Mashita), a company selling “Nice-to-Meet-You Meeting”, a web-based conferencing system, reported that the adoption of these means of communication have led to an improvement in sales because they have helped to revitalize office communications, pointing out how much easier it has become to convey details to clients at remote distances — details that were otherwise difficult to convey over the telephone or via email. Such details include more than just language, but also nonverbal messages, such as their manner of speaking, actions, gestures, the pauses in communication, and context.

 

Research conducted by experts of non-verbal communication have found that a message conveyed via verbal language in the course of a two-person interaction amounts to only 35% of the overall message, and the remaining 65% is made up of forms other than  language, as stated above.

 

A Three- to Six-Fold Improvement in Level of Understanding

Furthermore, according to a survey carried out by the U.S. Air Force, compared to communicating solely with just language, pictures or other reference materials, a person can improve three- to six-fold in comprehension and memory retention when pictures and other reference materials are used in tandem with language.

 

Next, in terms of profitability, according to V-CUBE’s seminar materials, the quarterly results of Company W showed that the company saw a dramatic decrease in transportation time when they adopted V-CUBE’s system, registering a total of 34 hours in contrast to 162 hours when they were not using the system. Furthermore, upon closer examination, V-CUBE’s data also disclosed that the time required for branch-manager meetings went down dramatically from 102 hours to just 34 hours, and the time required for making a visit to the managing director went down from 60 hours to zero hours. Their expenses went down, although not as dramatically or exponentially as the changes mentioned above, from 926,280 yen to 480,800 yen, achieving a total cost saving of 445,480 yen.

As indicated in Fig. 3.1, this company revealed that the means of visual communication made possible via the web-based conferencing system is a key tool that fills the lulls in communications conducted over the telephone, email, and even letters. In fact, the company asserted this tool to be key, even though there is a decrease in psychological distance and level of understanding compared to face-to-face interactions.

 

Incidentally, the conferencing system supported by computer networks can be categorized as either supported by a “special — Purposed” Machine or software-based. The former is a setup for what is generally called teleconferencing while the latter is the web conferencing system we are discussing here.

 

Since teleconferencing uses specialized telecommunication hardware, its image is extremely sharp and TV-like in quality. On the other hand, however, the cost for installing a unit is relatively high, and since users need to go to where the unit is installed, it is not possible to make use of it anytime, anywhere.

 

Drastic Cost-Cutting

On the one hand, web-based conferencing is inexpensive and can be used on a monthly subscription basis (V-CUBE charges a basic monthly fee of 79,900 yen under its standard plan) with existing services, allowing anyone to use it with an internet connection, even from one’s office desktop or from business-trip destinations. On the other hand, however, since the conferencing system makes use of PCs used in everyday business operations, depending on the maker, software installations may be necessary, which require companies to establish an internal company network.

 

Nevertheless, in the event of having a face-to-face business talk, companies need to consider not only travel costs or personnel expenses associated with the travel, but many other risks such as unanticipated delays or accidents that could occur in the course travelling, and even the likelihood of one party becoming absent due to illness or the need to attend to an urgent matter.

 

This paper was excerpted from Dr. Ishikawa’s upcoming new book, “Corporate Strategy for Dramatic Productivity,” published by World Scientific Publishing Company. Copyright 2013 Akira Ishikawa and WSPC (http://www.worldscientific.com/worldscibooks/10.1142/8702). The paper featured above comprises Chapter 3; additional selected chapters will be featured in upcoming issues of this Journal.