One way is by conducting more meetings online. The technology analyst Wainhouse Research suggests that online meetings using multimedia web conferencing hardware and software can save some £1,700 per executive per year.

The introduction of high-speed, multi-megabyte broadband connections has taken web conferencing to a new level. You can now combine real-time video, audio and instant messaging with application sharing, so your colleagues can see and hear each other while working simultaneously on the same documents anywhere in the world. All they need is a microphone and headset plus optional webcam.

More sophisticated services enable people to join an online meeting using devices such as 3G mobile phones, laptops or video-conferencing facilities.

In the past a weakness of web conferencing was the poor quality of the audio and video because of slow internet connections. Heavy demand on limited bandwidth also meant that only a few people at a time could take part in an online conference.

Another disincentive was a concern about security. Private meetings held over an open network posed potential threats to confidentiality. But encrypting everything consumed more bandwidth and slowed everything even more.

Many of these problems have now been dealt with, and the good news for businesses is that competition is fierce in this rapidly growing market. Leading players such as Microsoft (microsoft.com) and WebEx (webex.com) are going head-to-head. Microsoft bought PlaceWare, a leading web- conferencing firm, in 2003 and WebEx recently acquired Intranets, another provider of online collaboration services.

Other players in the market, such as Radvision (radvision.com), Viack (viack.com) and Marratech (marratech.co.uk) are also fighting hard for a slice of the action.

This consolidation and intensification of competition is helping to reduce prices and bring fully managed web-conferencing facilities within reach of smaller businesses.

But before your IT department starts splashing out on a hosted web-conferencing service, look at what your business really needs to improve efficiency and productivity.

Live video conferencing may not suit all firms. For some businesses an instant messaging or voice-over-internet-protocol (VoIP) service combined with application sharing might be enough.

Also, if you want people from outside your business to join online meetings, there is little point choosing a provider that insists on all participants loading their proprietary software.

Finally, if security is important, check that encryption facilities extend to all the media being used.

Explore Entrepreneur

• SME

• Start-ups