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Global private equity firms need to communicate, and video-conferencing systems allow visual as well as verbal exchanges among partners. Every firm is different, and video-conferencing systems can and should be tailored to the needs of individual teams.

The future arrived some time ago, but in the case of video-conferencing, it's been a complex and expensive one. Today's systems are a vast improvement on their predecessors from a mere five years ago, in quality, cost and ease of use. With so many private equity firms expanding geographically, video-conferencing is fast becoming a popular option for maintaining the feel of a single firm, given how easily satellite teams devolve into fiefdoms. And like any technology solution, the best way to capitalize on the advances made by the industry is a commitment to properly setting up the system and training its users.

The first decision is to determine the applications of your video-conferencing unit right from the start. Will the small exploratory team in Asia be included, or will it be the two or three main offices in the US and the UK? Most video-conferencing vendors formulate the return on investment of a given system in terms of travel dollars saved. Private equity firms require a more complex tabulation of benefits, tied to the phases of a deal cycle. If an office is relatively new to the geography, there may be less conferencing as the firm's senior executives are traveling more frequently to build relationships handshake by handshake. Once a satellite office is up and running, video-conferencing can link the day to day management of that fund to the activities of the rest of the shop. Before approaching an outside consultant though, one should decide on which sites will be communicating with one another, and a rough estimate of the call volume.

Next, there's the question of how a video call will be transported, whether it's an ISDN or IP connection. In most cases, a firm will have one or the other already in place for their current telecom and computer needs. An ISDN connection racks up a combination of recurring fees and long distance charges in the style of a traditional phone bill, making it attractive for low volume use. Users relying on this connection complain about its reliability, and a separate device is required to connect to the video-conferencing system.

The other option is an IP connection, which incurs the same monthly charge despite usage. Many firms' already use such a connection, but there may be insufficient bandwidth. Transferring video requires a greater quality of service than standard data transmissions, so the in-house IT manager should verify that the current IP connection has the proper capacity for video. ?For true high definition broadcasts defined as 1280×720 resolution, at 30 frames per second, at least 1MB of bandwidth should be dedicated exclusively to video,? says Karoline McLaughlin of LifeSize Communications, one of the market's major providers of video communications products.

Regardless of the skills of an in-house IT staff, a firm should invest in the services of a consultant or the support staff at one of the major equipment providers. Greenwich, Connecticut-based General Atlantic tapped its own IT support firm to execute its video-conferencing strategy several years ago, but today's market offers an array of consultants and support services to tailor a system to a firm's unique needs. The responsibility for synchronizing the variables at each locale should be centralized in the hands of one provider. One firm discovered that relying on unrelated local vendors created serious execution snafus, even though each one bought and used the same equipment. The plug-in-and-play ease of the new systems is reliant on the proper calibration of the systems from the very start. Consolidating responsibility for that within a single vendor avoids the finger-pointing so common among providers in the event of a glitch, or worse. No small amount of the hassles involved with video-conferencing are due to a short sighted or poorly staged set up, which rarely becomes evident until that first call is made, or that first new site is added. If the system is installed skillfully, there should be little reason an in-house IT manager can't supervise its functioning.

Once the consultant or equipment provider has been hired, they will review what the system needs to accomplish, and what the current network can deliver. They will propose a budget, with suggestions for which equipment to purchase.

The most bare bones system requires the following:

  • ? The codec is the nerve center of the system. This small box resembles a stereo component and relays the audio and visual data between the two or more points of the network.
  • ? The display is whatever plasma screen, projector or monitor is selected to best view the incoming video, and/or presentation materials. The quality of the monitor should stay apace of the quality of the camera, as a high definition broadcast of a lower grade image will only heighten the image's failings. If the suggested size seems excessive, remember that any screen will be spilt several times over among participants and whatever presentation content is being shared on the call.
  • ? The camera is often part of the codec, with most codecs offering a high quality 1-chip camera within its body. The 1-chip image appears crisp and bright, a degree above the more sophisticated camcorders. Additional cameras can be run through the codec, so one camera can be dedicated to the participants, and a second can be directed at a dry erase board or other presentation materials. There are also 3-chip cameras which provide a significant leap in image quality, but the better the image, the more bandwidth is necessary to deliver it. Wide angle lenses may be needed to grant a full view of the participants, depending on the shape of the conference room.
  • ? Microphones normally accompany a codec, with the standard offering a table top microphone able to pick up four to six executives around a medium sized table. Additional microphones, wireless or mounted from the ceiling, can be purchased and run through the codec as well. The proper microphone solution may not be evident until the team starts to use the system, and discovers which microphone complements their conferencing habits.
  • ? o The majority of monitors or plasma screens include speakers, but for videoconferences exceeding the parameters of the standard boardroom chat, additional speaker units will be required, and it's worthwhile when sourcing the equipment to verify that the monitor includes audio.
  • Beyond these core elements, systems can be integrated with most A/V equipment, so that DVD and VCRs can be wired through the codec, along with a PC or laptop to share Power Point or other documents among participants. There are document cameras available as well, specifically outfitted to maximize the image quality of any hard copy materials.

    One of the major factors involved in choosing the equipment, and designing the system for that matter, is the location at each office where the conference will take place. Location need not be chanted like the mantra of the real estate business, but considering the room, and how the room is dressed is a vital part of setting up the system. In many cases, there are few viable options for hosting a videoconference. The boardroom or meeting area tends to be the default location, but there are ways to maximize the quality of the space.

    Windows should have blinds or other treatments that can be drawn across them during the video-conferencing. Natural light is apt to shift over the course of the call, so it's best to rely on artificial light to maintain a consistent look. Wood and laminate tables are preferred to marble to reduce the echo of any voices into the microphones, and cushioned chairs and carpeting can be employed to diminish reverb as well. Light shaded walls, clothing and chairs are better than dark or dark patterns because brighter surfaces reflect available light back on the faces of executives and limit unflattering shadows. One consultant, VSGi, suggests light blue is best for the walls of a video-conferencing room, going so far as to say that Benjamin Moore paint numbers 1627 and 829 are the ideal shades. Bright indirect fluorescents that provide an even spread of light are also preferred, as spotlights or track lighting can produce inappropriately dramatic looks. This is a meeting, not ?The Big Sleep.?

    Most cameras that are part of a video-conferencing system employ an autofocus mechanism that relies on the edges and vertical lines of an object to gauge the proper focus. Complex patterns on the walls behind participants or the participant's wardrobe can confuse the mechanism and leave the speaker blurred. Furthermore, mirrors and artwork can be distracting by creating ?busy? compositions for the offsite participants to watch. The room's arrangement should be dictated by the camera's field of view, with all participants facing the camera's eye. The rule of thumb from VSGi is that for every participant involved in the meeting, add two feet to the distance between the camera and the participants. So for six participants facing the camera, they should be seated twelve feet away from the lens. For smaller rooms, a wide angle lens can compensate for the lack of distance. In terms of microphone placement, they should be kept away from other audio equipment to avoid feedback or static.

    With the room and equipment set, it's time to tackle training GPs on the nuances of communicating on a videoconference call. Given how pressed for time most partners tend to be, a few trial runs should be done so that the connection process between all sites is up and running smoothly. Begin with an exchange between two locations, and avoid adding any ancillary elements such as Power Point slides. Make certain the camera is properly placed to see everyone on both sides, and allow the conversation to continue along its natural course without interrupting to adjust the executives' behavior. It's better to make notes, and afterwards compare with the other site for when an executive might have spoken too loudly or too low, or moved off camera. In some cases, the equipment can be rearranged to better suit many of the GPs tendencies.

    Some habits cannot be compensated for by adjusting the equipment, such as any tapping or shuffling of papers by the microphone. They tend to be sensitive, so that the ruffle of pages might sound like a stampede of broncos to participants at other locations. Side chatter is easily picked up by the microphones as well, so what may seem like a mumble to those in the room can be rendered all too clearly at other sites. The executives who prefer to pace during a meeting can be outfitted with wireless microphones, but they must be informed where the edges of the frame are to avoid walking past them. It's all too easy with a static camera for the speaker to wander out of view, or stand up, leaving the frame to cut them off at the shoulders. They should also get accustomed to using the mute button when they're not speaking, to limit the amount of room noise on the network. Once these few basics are mastered, other materials, such as MS Office documents or white boards can be incorporated into a broadcast.

    Not all documents are fit for a TV screen, however. The thumbnail charts and copious footnotes that often crowd the layout of private equity materials are hardly appropriate to project on a screen. Sometimes it's better to email those hefty documents and print out copies at the given location, rather than have the participants squint at the content projected on the wall. If there are specific points to stress from a due diligence report for example, reformat the key lines, or charts for better viewing. Any text should be a minimum of 16 points in size, and a landscape layout is preferred. Screening busy or animated slides diminishes their impact, with simplicity a cardinal virtue in translating documents to the screen. Bright yellow or white text against a dark background is the best option in designing Power Point slides. And finally white boards warrant their own pre-set camera, as choreographing the board and participants in the same frame is no small feat, though it's been done.

    If the procedures have been well articulated and followed, video-conferencing can closely approximate the feeling of a single room. General Atlantic made the investment in time and resources over the past six years in building a state of the art video-conferencing solution that's been upgraded several times, to their current system that includes a wall of monitors, seven 3-chip cameras and a control booth. ?Video's true value lies in its ability to convey body language and facial expression, which can mean the difference between talking and being understood,? says Richard Gionfriddo, head of IT at General Atlantic.

    While it's true that today's video-conferencing is easier and more cost effective than ever (see the accompanying chart), introducing any technology is more than a question of money. It's a matter of weathering the clumsiness of any new form of communication.

    Time for a private equity firm is no less precious a commodity. The question of the system's value should be answered by the style of collaboration, not just the budget. Is the firm trying to execute a single strategy across disparate geographies, or are there several strategies, each tailored to a given region? Does the firm thrive during group brainstorming sessions, or do they prefer to tap each other's expertise through a one on one conversation? The best tech solutions are designed around the users, their aims and preferences, so the viability and value of any system rests, finally, in the eye of the beholder.