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
- 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.
- 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.
- 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.