Video-conferencing replacing costly board meetings

Every month, the management of Mogas Petroleum would hold a board meeting in either Uganda, Tanzania, Congo or Kenya.

The eight executives would spend three days in the host country, accruing hotel bills, the usual per diem and travel costs.

The costs were heavy —getting two representatives from each country would need at least Sh111, 000 each.

Then there was the added problem of jetlag and general body fatigue associated with the frequent travel.

But faced with thinning cash flows due to the recession, the petroleum dealer was forced to look for innovative ways of making decisions and monitoring the companies’ performance while easing the escalating cost of the monthly physical board meetings.

Oil company

The board soon identified video conferencing as a possible solution.

In the last year, the oil company has saved Sh9.5 million using the technology.

“We now physically meet quarterly, since video conferencing offers a good face- to -face platform, not only drastically cutting costs, but also increasing productivity,” said Mr Andrew Omolo, the managing director of Mogas.

Uptake of video conferencing technology has been sluggish due to the high costs of acquiring the internet bandwidth necessary to make the technology work.

A handful of Kenyan organisations —mostly multinational such as the United Nations and the World Bank — have so far been the major beneficiaries of this technology.

For instance, Google Kenya, and Telkom Kenya have video conferencing facilities within their offices.

Analysts say this is primarily due to the low awareness on the advantages of the technology but also the cost of investing in equipment.

But in the long run, companies save on costs, particularly if the frequency of utility is high.

Another immediate result is that decisions are made much faster.

Many companies would be forced to wait for a physical face-to-face interaction with the head offices for decisions to be made, sometimes affecting the competitiveness of the various subsidiaries if quick response is needed.

But some suppliers are now offering video conferencing facilities so that individual companies do not have to invest in the equipment.

Kenya Development Learning Centre (KDLC) offers outsourced conferencing facilities for between Sh14,800 to Sh37,000 an hour. The charges depend on the time.

It costs more to conduct meetings or training between 8.30 pm and 6 am.

But due to the time difference in various countries, the different packages come in handy.

Mr Njambi Muchane, director KDLC, said local companies are yet to fully embrace the technology leaving the multinationals to enjoy the benefits.

Hotels also offer this technology, which has been a key business conference requirement.

But a partnership struck two months ago between UUNET, a local internet service provider, with electronics manufacturer Sony to provide video conferencing facilities in Kenya may change this scenario.

“The question now is what to do with all the bandwidth, how to utilise it in business and save costs,” said Mr Joseph Mwaura, UUNET country sales manager.

However, many Kenyans are also making use of Skype, a software that enables uses to make video and voice calls, send instant messages and share files with other 370 million globally registered Skype users.

The beauty of Skype is that is a free service, but access to a broadband internet is still connection is required.

Most savvy business people and entrepreneurs have their Skype address in their email signatures.

Mobile handsets technology is also catching up with value added communication services.

It is possible to skype on some smart phones such as Iphone, Nokia’s N and E series and Sony Ericsson among other phones.

In order to use the service one much download the software on their mobile phone or laptop.

In the case of the mobile phone one requires a minimum 12MB of free storage memory on the device to install Skype or 6MB free if you are installing from a memory card.

Beyond holding meetings, video conferencing can also be used to train staff, cutting costs on the training budget.

“By using this technology, it is possible to cut costs by up to 70 per cent per employee on training,” said Ms Muchane.

This year alone, over 30 different training programmes have taken place at the KDLC via video conferencing and dialogues as well as other web -based techniques.

This echoes the Pricewaterhouse Copper 2009 National Human Resource survey that companies are now turning to technology for training to cut spending.

But not all training can be conducted via the video conferencing model.

“Most of our specialised skill training is practical. This technology would not be feasible with such training since a person is required to observe, learn and replicate until they get it right,” said Mr Omolo.

Executive coaching is another programme that Ms Madeline Dunford, managing director, Career Connections said would be hard to deliver through e-learning since it is a highly interactive and practical.