changing business systems

January 28, 2010 at 1:00 am Leave a comment

There’s something about the way that
You say the words that you’ve rehearsed, now
I think I should explain
Things aren’t going to change

At some point in your professional career, whether you are on the business or operational side of a media company, you will face a system changeover. It’s a tough process.

Media organizations, like any business, change their business systems for many reasons. However, the fundamental reason really is to provide a framework for either reducing costs or enhancing revenues. Given that the cost of introducing a new system is itself quite significant, let’s explore revenue enhancement.

After going ‘live’, systems & organizations progress through several stages. The course taken reflects:

  • Properties and operations of the old system
  • Expectations of new system deliverables
  • Dynamics associated with moving the organization through the conversion project
  • Ongoing developments

In my experience, three broad transition phases exist. The degree of overlap and time spent in each phase is also a function of the above factors. Each phase is discussed separately along with its attributes, implications and suggested organizational actions.

Phase 1 – Revenue Protection

This is typically called “Fine Tuning”, “Shakedown”, “Bedding In” etc.

It typically lasts for 2-4 weeks immediately after the live date. It may span across the live-date therefore last longer, depending upon the state of the old system, and if the client has desired a parallel run or pilot etc.

In this phase you need to pay particular attention to:

  • Refine processes & procedures
  • Ensure consistent message within company and with clients
  • Firm up Business Rules
  • Establish baseline measurements

Phase 2 – Inventory Control

This should really be considered as ”Taking Control of the Business” with the new system and it lasts for about 6-9 months after the system has settled down. This is a learning stage, one of the organization becoming ‘familiar’ with the new system and its operations. It can start during the regime of the old system but typically users will not accept the new workflow and operations until the comfort zone of the old system has disappeared.

To transition through this phase as quickly as possible, focus upon:

  • Education & PR campaign
  • Planning/budgeting – strategy for next sales/marketing period
  • Develop products, rates, packages etc.
  • Communicate the business rules, set client expectations, regain control of inventory

Phase 3 – Revenue Enhancement

The whole point of changing systems is to “Get Value from the System” you have just installed. This is an ongoing process, typically starting after about 6-9 months of operations. By this stage, the new system has become the ‘modus operandi’ of the organization and there is enough data to provide comparisons and historical perspectives. Users look for new ways to solve business problems and consult the system as a primary point of reference.

At this stage the business should be able to leverage the new system for:

  • Planning/budgeting – strategy for next sales/marketing period
  • Develop products, rates, packages etc.
  • Adjust rates, look to demand/yield management
  • Utilize information to create selling opportunities, tie to programming
  • Build ‘value’ for the customer

It is critical that clients pass through Phase –1 Revenue Protection as quickly as possible. Being stuck in this phase will impact client confidence and hence their willingness to realize the promise of the newly implemented system.

It is important to realize that these broad phases cannot be skipped. Whilst their distinction and characteristics will vary by site and business model, and transition from one phase to the next may not be concise, it is essential to recognize the actions required to make sure that the organization evolves to the last phase.

Ultimately, the business controls the length of  each phase. Some organizations never evolve into the final stage and may be quite content with ‘Inventory Control’. In all cases, it is the implementation team’s responsibility to recognize what is occurring and to evolve the organization’s operations to ensure the maximum return on investment.

Tell me it isn’t so… I’m listening.

Entry filed under: Media, Technology. Tags: , , .

leadership qualities for innovation making toast

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