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Australian companies could be missing out on significant cost savings through executives' reluctance to abandon ingrained habits and embrace video-conferencing. CLIVE MATHIESON reports.

Video-conferencing guru John Mitchell likes to relate the story of a big New Zealand company whose sophisticated video-conferencing system had failed to cut into an annual travel budget of $8 million.

Just 12 months later, the guidance of Mitchell's private consultancy has slashed more than $1 million a year from the travel bill, with both executives and junior staff now lauding the benefits of video-conferencing.

Despite the potential for such cost savings, few companies outside the education industry have fully embraced video-conferencing technology.

Mitchell blames this reluctance not so much on the technology itself as on the psychological culture of a company - people's ingrained habits and preferences for face-to-face contact.

Although he concedes direct personal interaction will always be the preferred method of transacting business. Mitchell believes there are countless opportunities to exploit advances in video-conferencing technology.

Videoconferencing systems are not cheap - ranging from $5000 for a desk-top unit to $65, 000 for a top range mode - and, like all new technologies, can be difficult to master.

This is where Mitchell's Adelaide-based consultancy, John Mitchell & Associates, comes in. JMA is neither an engineer nor installer of teleconferencing systems but a consultant on the practices to achieve the best results from a big investment.

"The issues holding back videoconferencing are not the technology, they are tuned to the user attitudes and company culture," Mitchell said.

"The manufacturers are doing a very good job and the systems that are being produced are getting more elegant and more user-friendly. But to use them well requires substantial changes in both the skills and attitude of the presenter and substantial changes by organisations."

In the past four years, JMA has signed up more than 30 clients including 14 Australian universities, three State TAFE departments, the Securities Institute of Australia and several State governments.

Its corporate client base includes Telstra, NZ Telecom and pharmaceutical heavyweight FH Faulding & Co, with a growing list of hospital contact in the emerging telemedicine sector.

JMA prefers to be involved in the introduction of video-conferencing right from the feasibility stage rather than being called in to resurrect an existing system which has not been used to its full potential.

Mitchell and his small staff then take on the role of project managers and educators - monitoring the system's acceptance and teaching staff to use it with as much ease as they once racked up frequent-flyer points.

"We are really focused on optimising the investment and ensuring that it's not only easy to use but you can see some demonstrable productivity gains," he said.

"You don't just buy this magical technology and expect it to work. You monitor its acceptance and you monitor the attitudes of the users and talk them through the achievements and hurdles of the technology."

In Faulding's case, JMA has helped the company slash its travel bill by allowing Adelaide-based executives to keep in direct contact with staff in Victoria, the United States, the United Kingdom and Hong Kong.

Faulding group communications manager Dale Kelly said the introduction of tele-conferencing to the business had revolutionised the group's communications strategy.

"All of our executives use it and we've just found it absolutely essential to our communications strategy," she said. "We recognised that by doing the home work on videoconferencing very early in the piece it was going to save us an enormous amount in costs."

Although Faulding executives still prefer to handle major deals in person, the group manager of Faulding Pharmaceuticals, Tim Meakin, said the technology had brought a quantitative change in carrying out day-to-day operations.

However, he said the present technology would need to improve to gain wider acceptance, with "jerky" images on some models stifling free discussion.

Mitchell conceded the concept of teleconferencing still had a "low penetration rate" into the corporate world, with many people still suspicious of the technology.

He said presenters - usually directors of senior executives - using video-conferencing were forced to review the entire format and role of the meetings with staff.

Unlike the corporate sector, the education industry has been quick to embrace video-conferencing, not just for open learning programs but in administration - particularly for multi-campus institutions.

Acknowledgment. The above content is copyright The Australian, 1996.