Ongoing "digital disruption" has rendered it inevitable for media and entertainment companies to transform their business to adapt to new technologies and ever-changing environments. Growing adoption of broadband and mobile devices has changed the way content is consumed today, allowing high-technology companies such as Apple, Google and Amazon to arise as serious competition to incumbent media organizations with their new distribution channels and business models. While social media CRM and big data provide more information than ever before about consumer behavior, regulatory and policy issues, rising piracy concerns have left companies to their own devices in dealing with misappropriation of their intellectual property.
The need for transformation may differ from one organization to another, but most incumbent businesses need one sooner rather than later. The maturity or decline of core revenue channels or models, often with no help from disparate and aging IT systems or inflexible and fragment technology encourages companies to invest in a transformation effort.
From our experience working with large and medium-sized media and entertainment companies, we have devised a replicable methodology for developing an actionable plan for business transformation. The five-step plan, over a three-to-five year period, can optimize human resources, standardize key business processes and revamp aging IT infrastructure to ensure viability over the long term (see Figure 1).
A Transformational Roadmap
Phase 1: Defining Value and Strategies
Defining an actionable and communicable strategy is the foundation of a successful transformational effort; a thorough analysis of the current and planned strategies is imperative for achieving desired results.
Our Cognizant Value Discovery Assessment (CVDA) is a proprietary tool that delivers a relative diagnosis of the current and planned strategies against the top four levers that deliver value in media and entertainment companies to prioritize the areas of change and focus that the organization should pursue (see Figure 2).
The CDVA provides the transformational underpinning that focuses on four transformational levers: efficiency through optimized costs and reduced waste, improved effectiveness in quality control and customer satisfaction, virtualization through flexible and collaborative work processes, and fostering the capacity to innovate.
Phase 2: Business Capability and Model Definition and Assessment
Capabilities assessment: This is the stage that defines what an organization can already do (existing capabilities) and what it needs to (capabilities to be developed), to sustain the transformation effort. For instance, legacy studios and publishers have the capabilities to create great content; however, they often need to develop a robust mechanism for delivering content across platforms, on the go.
Outlining the business model: What value do you offer the customer, in what ways and in what markets?
To excel amid ever-changing market conditions, media and entertainment companies must ensure seamless alignment between their operational capabilities and business model.
Phase 3: Current State Assessment
A meaningful business transformation requires clear understanding of the status quo — the business landscape, operational strengths and weaknesses, and value stream.
Our customized, high-level value stream mapping methodology ensures alignment of the current-state assessment and the future-state definition so that only the right level of information is gathered. This methodology also develops an end-to-end view of the organization and creates a map of the enterprise processes, to foresee impact of the transformation effort.
Phase 4: Future-State Definition, Gap Analysis and In-Flight Analysis
The future-state definition is when transformation moves from vision to definitive form: a series of workstreams developed in this phase will serve as action plans to deliver the future-state vision.
In this phase, the organization must also review, halt or repurpose existing in-flight projects to ensure minimum impact on on-going initiatives and business as usual (BAU) activities in the transitional periods.
In developing the workstreams, considering the dependencies, tollgates and critical success factors associated is also critical.
Phase 5: Transformation Roadmap Definition
Here, all components of business vision, current-state and future-state efforts come together to form an actionable plan to achieve meaningful transformation.
Transforming workstreams to projects: Workstreams are transformed into actionable projects that are planned (overlapping projects reorganized), resourced and executed.
Resourcing the projects: Finding the right person for the right job is critical. A realistic resource plan to enable coordinated inter-departmental efforts is then created.
Other roadmap creation considerations: A clear roadmap will inform the magnitude of change brought about by the transformational effort and the organization's ability to withstand it. Our proprietary methodology can quantify the amount of change and the associated impacts.
While some media and entertainment entities understand the necessity of business transformation for long-term sustainability, few comprehend the magnitude and impact of the effort. From our experience in this space, we believe that organizations that follow our aforementioned five-step plan, cover properly plan and deliver a successful transformation initiative and contend with glitches that may arise along the way.
For details of drivers and need for the transformation along with some success parameters, please read our white paper "A Transformation Roadmap for Media and Entertainment Revitalization", or learn more about Cognizant's Information, Media & Entertainment Practice.