When considering a purchase of small business cloud phone services, metrics like Return on Investment (ROI) andTotal Cost of Ownership (TCO) are often considered. This makes sense for larger businesses, but often the key metric for small business or a startup is more time sensitive. For businesses that are highly time sensitive Time to Value (TtV) is a better metric.
What is Time to Value (TtV)?
Time to value describes the amount of time between making a business decision or incurring initial cost to receiving the value from the decision or investment. Value in this case is the desired business goal or benefit.
This is a different metric than the often used Time Value of Money (TVM). TVM is a calculation of what today’s money is worth in the future due to its earning potential. TVM is generally used when money is being loaned or will be received at some future time.
Both the Time to Value and TVM attempt to address the consideration of time, but in different ways.
Startup & Small Business Time
For startups and small businesses time is often their most precious commodity. The industry likes to focus on ROI, which factors time but not always in a way that matters to a startup or small business. Small businesses and startups are often on the clock trying to make their business successful before running out of time.
ROI helps you understand how long it will take to pay back an initial investment. This is useful when there is a large capital expenditure, but for cloud services this often misses the point. Time to Value is very aligned with how small businesses and startups tend to think. It is focused on the speed of which money spent returns value.
What is the TtV for cloud business phone services?
To answer this question we must first look at the benefits that drive most small businesses to cloud business phone services. I wrote a post awhile back on the top reasons small businesses go to the cloud, so I won’t rewrite it here. Let’s review these reasons and the Time to Value for each:
- Cost – Most startups and small businesses go to the cloud to avoid a large capital expenditure on a phone system With cloud business phone services this value is delivered day one.
- Scalability – Startups and small businesses don’t want to be penalized for adding or removing a line. Again, the time to value is pretty much immediate with most cloud business phone services offering adds and removes at no cost.
- Security – Managing cyber security can be a real burden for small businesses. Cloud business phone services shift this burden to the service provider and the value is received immediately by customers of all sizes.
- Integrations – Many small business cloud phone services offer integrations to CRM and Support platforms. These integrations typically require a little configuration, but value is often received the first day. Cloud business phone services also offer APIs enabling startups and small businesses to create their own custom integrations. The value of these integrations is not received until the development work is completed.
- Flexibility – This benefit is partially described under scalability above, but there is added value from picking and choosing features. Most cloud business services provide plans where the customer can have a limited feature set for a lower cost and add features as they grow. Again, this value is received pretty much immediately by the customer.
- Disaster Recovery – Most startups and small businesses don’t have the time or money for a full blown disaster recovery plan, however flying without a net is rarely a good policy and customers often require this. Going to the cloud solves this problem in a critical business area, communications, immediately upon activating the service.
So the short answer is unless you need to develop a new integration Time to Value is immediate. Some might dismiss TtV for its simplicity, but it is often the most important metric for startups and small businesses. We would encourage you to consider it with your next major purchase.