Question
My brief is to set technology strategy to develop and support
new business at a new media company. I have read statements to the
effect that technology alone is rarely the key to unlocking
commercial value, and that companies will leverage information
itself in new ways in the years to come, whether by using
information to make smarter calls, or to create new models. How can
I get a good handle on the state of the art in this area?
Answers
Elaine Harris, media and entertainment global client partner at
Ernst & Young
Companies are recognising that consumers are gaining the balance
of power because of digital media and the internet. Finding and
keeping those revenue-generating customers has never been harder.
One way to get a handle on the "state of the art" is to stay
updated in the technology, entertainment and communications
industries, along with other industries that are utilising digital
technology.
Your technology strategy for a new media company will need to
have speed, storage and security. If any are missing, it will
likely be impossible to acquire and maintain customers. Using
technology, your challenge will be to create revenue for new
business models and help maintain profitability as traditional
revenues come under pressure from new competitors and the erosion
of advertising income, while also tracking the actual costs of
digital delivery.
Most new media companies rely on some type of advertising as
their key or sole revenue generator. For example, 2007 will be
remembered in the sector as the year when Google, a company founded
just 10 years ago, first overtook ITV1, Britain's 50-year-old top
commercial TV channel, in UK advertising revenue. The models are
becoming more targeted and data centric. But, only 10% of global ad
revenue is via the internet, so we are still at the infancy of this
channel.
Let's look at the two competing "forces of change": technology
forces (bandwidth, storage, access and connectivity) and consumer
forces (control, adaptability, choice and speed). The core
components under your influence can include content creation,
distribution and delivery, consumer aggregation and reporting,
measurement and analysis.
Based on demographic and customer segmentation, your strategy
could include the blurring of original and advertising content,
better targeting and segmentation, on-demand programming, user
control and storage, social networking and online asset pricing and
optimisation, demographic and customer segmentation, behavioural
and predictive targeting, and offer management. Considering
multiple platforms, devices and formats is a must in these very
exciting times.
Chris Potts, corporate IT strategist at Dominic Barrow
The state-of-the-art strategy in new media achieves two parallel
but often competing objectives. It harnesses the value of
everyone's personal strategies for exploiting information and
technology while holding the total bottom-line costs of IT within
pre-planned constraints.
These strategies are the third generation of corporate
strategies for IT. They bear little resemblance to the original IT
strategies on which many of us were brought up, and are a paradigm
shift from the more recent second-generation strategies.
First-generation strategies were focused on technology roadmaps
and the people who delivered them. The IT department's role was
initially to be the creators, and then integrators, of IT systems.
Post Y2K and dot-com, second-generation strategies then treated IT
as a collection of services that must perform satisfactorily and
become progressively more efficient. In "IT strategy 2.0" the IT
department became a supplier of IT services to internal
customers.
As everyone has become more confident at using IT to create
value, and executives have kept the lid on IT costs, another major
shift has occurred in strategies for IT and the IT department's
role. Third-generation strategies for IT are now primarily focused
on the people who invest in and exploit IT, and on company-wide IT
costs. The IT department's primary role is corporate leadership in
the creation of value from business investments involving IT.
So you have a choice of three generations of IT strategy. Each
means a very different role for you and your department. As the
company's chief strategist for IT, your first decision is which of
them will be the most appropriate. Then propose a one-page
statement of that strategy to your executive colleagues, to secure
their backing and involvement.
Sharm Manwani, Henley Management College
You have certainly taken on an interesting challenge and
identified that the first step is understanding how to generate
commercial value from the new media business development. This
approach would apply in most private sector organisations, but is
perhaps even more important in an industry with a heavy reliance on
technology.
Given your focus on new business, you should be looking for
innovation either in the business model or in the technology.
Depending on the potential value and the combined risks, you may
even be willing to pursue an opportunity that requires innovation
in both areas.
However, prior to this drive for innovation, you need to make
sure that you are comfortable with the business language and terms
in your new industry and organisation. People often mean different
things when they refer to business models, but broadly it is about
how organisations make money by satisfying the needs of their
customers. You should first obtain a general perspective on the
components of a business model. Reading around the subject and
making use of resources on the internet is a good way to start.
This will support your wide discussions with a variety of internal
and external stakeholders to apply this to your own
organisation.
As you rightly point out, information is critical in developing
the required new media business model. There are different ways of
generating commercial value through information including
identifying, targeting and acquiring new customers or selling
content or attracting advertisers to your site. You may apply a
combination of these approaches.
Given that your brief is to set the technology strategy, you may
also need to broaden your personal skills in this area. You have
not defined your background in your question, but I assume you are
broadly familiar with the main front-end technologies. The
challenge is to be able to offer agile systems without jeopardising
the reliability of the front-end systems.
Ben Booth, vice-chair BCS Elite, global chief technology officer
at Ipsos
The great thing about applying IT in a sector such as the media
is that as well as supporting the business, technology is also one
of the primary means of delivering information to your customers,
and is therefore is of central importance to future success. The
skills that can be successfully applied in such a situation are
those of technology and also information management.
I would start by carrying out an audit of existing information
resources. What information have we got about our customers that
will help us sell more to them, and what content do we have which
can be re-packaged in a number of different ways? I would also look
at what different types of delivery your customers may want -
e-mail, e-mailed links to a website, SMS and so on. I would also
look at what competitors are doing, in terms of products and
technological innovation, and I would also look at emerging
technologies to see what is of relevance. Overall there will be
many exciting opportunities.