How to Fund Your Own Technology Powerball Jackpot

funding-technology-transformation

Powerball is a popular topic in this country, especially when the jackpot reaches record heights as it did earlier this month. With money on my mind, I thought now would be a good time to discuss how telecommunications, media and entertainment (TME) executives can open up internal funding sources to transform their IT departments from cost centers to revenue generators that deliver exceptional value to their business teams. 

More than ever, consumers are asserting greater control over brands via their preferences and buying behaviors, driving marketers and technologists to focus online, then on mobile, and finally across all omnichannel avenues. Just as market leaders are catching their breath, the shift to ‘customer-first’—or acquiescing for all intents and purposes total control of the brand drivers—as the new table stakes. As a result, companies must move from driving the brand from within to nurturing current customers to entice and influence a net gain of customers. The tools exist to do this without gambling away future business success.

Belt Tightening Not Enough—Uncovering Internal Sources of Funding
Against this consumer-driven TME backdrop, how should the C-suite plan their business growth and IT investments while also needing to keep pace with rapidly developing technology advances and retaining their top talent? A good first step is for business leaders to closely reexamine their liquidity and working-capital strategy to fund their IT investments and long-term growth plans. For many, that will mean taking a close look at internal funding sources instead of over-relying on debt and other external sources of capital.

This may require company leaders to reorganize or shift IT resources and identify new capabilities that are needed to run IT as a more accountable profit-and-loss business that supports top-line revenue targets in new and better ways. IT must have its house in order to free up innovation dollars to support marketing and other business units taking advantage of technology advances to reduce customer churn and improve customer experiences.

Three Internal Sources to Fund Your IT Transformation

  1. Running IT as an Accountable, P&L Business
    Companies should make sure that IT is a well-oiled department that is more than aligned with the business and, in fact, is run like an actual business itself. At the same time, IT leaders should be held just as accountable for reaching sales goals, making marketing efforts more productive, retaining existing customers and obtaining new ones, project governance, and other critical business and financial objectives.

    Too often IT is running projects independent of company goals, creating pressure to support more and more applications and decreasing the efficiency of the team and budget dollars to accomplish corporate goals.

  2. Outcomes-based sourcing to utilize talent outside the organization and increase efficiency
    Many IT leaders believe they know outsourcing cold. But too often they don’t. At least not from an outcomes or value-based perspective. Outcomes-based sourcing contracts are hard to negotiate effectively, but highly impactful when done with both parties winning is kept in mind. Outsourcing done poorly can create drag on your organization even with the outside help. Outsourcing done well frees up your high-value talent to take on bigger, more meaningful projects to move the business forward.

  3. Insights-as-a-Service Model for competitive advantage
    Anything with “Big” in the names is likely synonymous with complex. Big data has yet to be fully leveraged because its large nature adds time, complex infrastructure and new skillsets to the analytical mix. Insights-as-a-service allows companies to bypass the complexity completely or in the interim while the bigger data support is being implemented. For less cost than building a data platform, and certainly at an expedited rate of weeks versus months or even years, Insights-as-a-Service models allows companies to buy answers without worrying about the infrastructure. This highly effective model has been used to move fast for quick wins within a quarter resulting in moving stock prices up.

Any one of these tools can open up internal funding sources and used together they are a powerful combination. Alone or united, these tools enable IT as well as the entire organization to be nimble. And nimbleness enables and fosters competitive advantage versus level-setting only to be on par with peers.

With Google, Apple, Facebook and other powerhouse brands set to enter an already crowded and hypercompetitive TME market now is not the time to sit back and wait for lady luck to be on your side.

Process and Benchmarking: Two Pillars of a Strategy Well-Executed

Process is hard. Here's why. Leaders are lauded for being visionary, to think in terms of big goals. But to make a vision a reality, it takes a process developed with analytical and detailed thinking about going from A to B. We tend to think in high-level bullet points versus detailed frameworks that break down actions into the minute steps needed to realize the vision.

In a complex enterprise, it takes a process plus coordination and regular checkpoints to make sure everyone is focused on the same goal. It requires structure, a common language and an understanding of the dependencies and inter-connections across, and between, departments and processes.

Capto uses the APCQ Process Classification Framework (PCF) to help our clients in telecommunications, media, entertainment (TME) and healthcare to define comprehensive work processes that eliminates redundancies across the organization, insure processes are met, and provide a common lexicon when discussing opportunities, risks, or challenges. Here's why we find it effective.

APQC Model

Breadth and Depth
APQC's PCF spans processes for every aspect of an organization’s operating, management and support services. It the allows for a deep dive into each area from business and marketing strategy, product development, and customer service to supply chain logistics, talent management and IT. It also looks closely at the financial resources, compliance, risk and external partnerships to help organizations set their internal benchmarks and compare itself to other organizations.

Common Lexicon and Roadmap
One thing I often see is the technology group speaking a different language than its business unit client partners, which causes undue confusion and loss of productivity and slowed outcomes. APQC engages the entire organization and is an effective tool in establishing a consistent lexicon regardless of business area. The framework is clear and comprehensive in providing a roadmap to identify processes, redundancies and inconsistencies. It also measures subsequent performance and ongoing knowledge management.

Better Benchmarking
Vanity metrics (internal company-defined metrics) often lack adherence to industry best practices. This then means that there is no way to compare your organization to a competitive organization to see where you may need to shore up a weak process or exploit an advantage. Internal benchmarks incrementally refine an existing process within a business area versus taking a fresh look at process across the entire organization to create disruptive change, and advancement. APCQ's Open Standard Benchmarking encourages a data-driven culture that is focused on improving upon past performance.

The amount of industry data that APQC has is helpful in identifying areas where our clients are performing well and where they may be falling short of industry peers. A great strategy means nothing if it is not executed. And strategy executed with process and benchmark discipline can mean the difference between being a market laggard and a market leader. 

 

Avoid the Burn from Churn

The telecommunications, media, and entertainment (TME) industry – specifically in the new world of streaming video – has become highly competitive as over-the-top (OTT) providers seek to acquire new customers while locking down existing ones.

Free video service promos, flexible packages, predatory pricing, and lack of differentiation make churn inevitable. Even market leaders with less than two percent churn are exposed to losing customers and the revenue associated with their departure. Add to that the expense of replacing lost customers and it’s easy to see that controlling churn is a top priority for TME players.

Read the full story at CED Magazine