MBI Time

June 2008

Media Business Intelligence's Time Has Come

Although industry, corporate and institutional knowledge coupled with a keen sense of intuition certainly comes in handy when managing in today's business dynamics, it is no longer sufficient in making business decisions, especially in Media. A key ingredient for establishing a major competitive advantage is the use of Business Intelligence by Media companies.

Leveraging analytics and the knowledge gained through Business Intelligence is the essential new competitive weapon for companies, both big and small.

Why else would SAP AG in October, 2007, pay $6.78 billion for Business Objects SA, a BI specialist? View article at http://www.sap.com/about/investor/financialnews/adhoc/businessobjects.epx. Why else would Oracle Corp in March, 2007, agree to pay $3.3 billion for Hyperion Solutions Corp, another Business Intelligence specialist? View article at - http://www.news.com/2100-1012_3-6163325.html or IBM agree to pay $5 Billion USD for the BI specialist Cognos in November of 2007? View article at - http://www-03.ibm.com/press/us/en/pressrelease/22572.wss.

June 2008 - Wayne Ruting, CEO and founder of Decentrix, Inc, a company that specializes in Media Specific Business Intelligence claims that "this technology is one of the only remaining sustainable competitive advantages a Media enterprise can deploy, and those that embrace Business Intelligence sooner rather than later will lead the industry and have a major competitive advantage. Those that have already embraced it, find it is as essential as the very personal computer they use to access it."

In a recent interview, Mr. Ruting discusses why Media Business Intelligence is attracting so much interest:

Question: What is Media Business Intelligence?

Wayne: "Business Intelligence is the process of seeking information and knowledge for the purpose of making quality decisions and taking informed actions to meet corporate goals. Any good definition of Business Intelligence (BI), and this is true for media specific BI, starts with the concept of basing business decisions on solid Facts derived from accurate business data. Media Business Intelligence is all about having factual media information, analytics and statistics available FAST, (in seconds instead of hours, days or weeks) and having this information at a decision maker's finger tips to gain powerful insights, and predict aspects of a business situation that were previously unattainable or simply too hard to get at. An organization's staff and the quality of their decisions is the primary competitive differentiator and BI supports such quality decision making."

Question: Why is BI so important to Media Companies today?

Wayne: "Change is happening so fast in media with the digital revolution, and it is difficult to predict all the ways content will be deployed, consumed and monetized. The new revenue sources for broadcast and cable companies are still to be determined and probably have not yet been invented. Close attention to the business data underlying current and past trends as well as the ability to iteratively test and experiment with new revenue opportunities is essential to success in such a fast changing environment. Only armed with solid information about their business can executives, managers and employees make informed decisions to take advantage of an opportunity or avoid a business disaster. Media decisions based on factual data will result in a more efficient, profitable corporation with higher shareholders value and satisfied clients. With Media Business Intelligence, decisions are grounded by corporate Facts instead of politics, intuition, gut feel, past practices, experience, or emotions. At the very least it helps everyone make informed decisions and, if fully deployed, the ultimate pot of gold is the ability to maximize revenue and shareholder value."

Question: Tell me what you mean by Maximizing Revenue? This claim is so over used.

Wayne: "The specialized class of technology and tools used, such as Online Analytical Processing (OLAP) Cubes, allows for billions of transactions and millions of totals to be swept through and analyzed in seconds. Those sophisticated tools with the underpinning of some unique modeling technology is able to determine advertisers past price sensitivity, combine it with real time sellout status and other business factors that predict where price increases or decreases might result in greater future revenue. BI can provide very sophisticated forecasts and analytical reports that help guide strategic decisions and determine progress towards sales and financial goals. No other technology solution for Media can accomplish this. It truly is unique to Media Business Intelligence."

Question: You frequently use the word corporate "Facts". What do you mean by this?

Wayne: "Media Business Intelligence gathers, combines and relates together all relevant transactions from the media operational systems across the corporation into a Media Data Warehouse where they are stored as transactional Facts. For example, data is pulled from linear traffic systems, from program management systems, from media website revenue and visitor tracking systems, sales proposal systems, audience research systems, master control automation systems, and much more. This data extraction process follows strict rules for correctness and accuracy and aids in SOX compliance. Extracts of these transactions to the Media Data Warehouse are balanced to the source systems and consequently can be trusted by all staff. This corporate-wide Media Data Warehouse is the repository for all the Facts, which is a single version of the true status of the business data which is tightly secured. It is specifically structured for complex analysis and uses a completely different technology from the operational systems, purposely built for Business Intelligence. The challenge of the volume of rich media data that gives media executive's headaches is precisely the environment suited to these powerful BI tools. For business industries that only have modest transaction volumes BI adds little value."

Question: What are the corporate advantages of Media Business Intelligence?

Wayne: "As I previously commented, Business Intelligence systems are most powerful where there are a lot of transactions to analyze and Media is an excellent fit to reap BI benefits. Today's competitive business realities contribute to the pressing need to re-invent and re-think old ways of doing things. Business Intelligence for Media helps media corporations see their way through these challenging times by providing management the ability to establish Key Performance Indicators (KPIs) for corporate wide adoption and having decisions supported by easily accessible Facts. Media Business Intelligence is like many new powerful technological breakthroughs, once they are placed in the hands of employees, with the empowerment to act, significant improvement in productivity results. Executives, managers, and all knowledge workers begin to discover new ways that the tools can help them to succeed, help them to do a better job, help them to help clients, and overall to excel in today's new media world. Media BI allows you the freedom to be curious and ask lots of questions (smart or stupid), without having to ask the IT department to write a program to get the answers. This old approach is antiquated and often results in reports that are not responsive to current needs or needs may have changed since the request was made. With the ability to ask lots of questions and get fast factual answers, brilliant results can occur. Whenever you have a question about your business, you should be able to get factual, fast, real time answers. Some examples of questions might be "Who are all the new advertisers that signed up with us this month/year/quarter?" or "Who are the top five (5) advertisers on our website that aren't advertising on our linear properties?" or "Which sales office has the fastest growing ratio of web to linear revenue?" or "What programs should I review my rates for that have the most promising potential to achieve higher revenues?" and on and on and on. Media Business Intelligence, for those Media companies that have already embraced it, has become an indispensible tool, one that they find they cannot afford to be without and one where needs and opportunities continue to evolve. They know that opportunities in the media business are often time sensitive, they know their knowledge workers have a need for speed when it comes to analysis."

Question: You mentioned KPIs. What are they and why are they valuable to a Media Corporation?

Wayne: "Well, Key Performance Indicators (KPIs) were defined by the Harvard Business School to quantify an organization's mission and goals. A KPI is crafted with a number of calculations and attributes to help a corporation measure their achievement towards these overall corporate goals. Within the KPI calculation, there are distributed Goal Values that is used for comparison on any date at any contributing level in the organization. Why are they valuable? Since KPIs are designed to distribute the responsibility for each goal to every contributing party, both managers and staff, they consequently become a powerful tool for corporate communication and aligning strategic objectives across all staff members."

Question: What is the ROI for a Media company deploying Business Intelligence?

Wayne: "Like any tool, it always depends on how it is used. Some Media companies will find incremental and tactical benefits that will yield results in a minor way. Others will discover radical and non-conventional competitive uses that will affect their revenues and their bottom line in a spectacular way. Other transaction rich industries have successfully used BI analytical capabilities in strategic and competitive ways to realize huge economic outcomes. For example, American Airlines use of "yield management" in the 90s has been credited with bringing $1.2 billion in new revenue to the company over a three year period. Amazon.com uses BI analytical capabilities to shape customers' buying experience in real time every time they purchase an item resulting in a massive increase in sales. There is no reason to believe media corporations; with their wealth of transactional information can't accomplish the same outcome as these other large corporations. Once executives realize that they can readily dip into their sea of data and get immediate answers to questions about their business that used to take hours, days or weeks, I predict there will be a dramatic paradigm shift in how they will conduct business. To provide a real return on investment, analytics have to be timely, which is what BI is all about. Business Intelligence delivers a distinctive and competitive capability to a corporation that they can measure and utilize to focus on their core competencies leading to their unique formula for success."

Question: How is Media Business Intelligence different from Operational System Reporting?

Wayne: "Media operational systems such as Traffic or Sales or Proposal systems are created for transactional speed associated with one particular business functional area and workflow. What I mean by this is if they need to get a log out urgently, create a proposal immediately, or enter a contract fast then the system must be efficient and purpose built for that result. Workers in these departments are often under the gun to get the job done fast. There are many fundamental and critical day-to-day reports (such as a printed log) that these systems provide and will always provide in an effective way. It is a mistake, however, to ever think that they can offer any real BI functionality. They are primarily tactical and "walled" systems and BI, by definition is across all operational systems corporate wide.Advanced Business Intelligence is a strategic system built to maximize the speed with which metrics are viewed across all transactional data of operational systems through Online Analytical Processing (OLAP) technology. This technology provides for millions of pre-built and incremented totals (based on billions of transactions) so that the speed with which they can be viewed is within seconds, at your finger tips. The answer to one question will often lead to another and another. So as fast as you can identify an anomalous trend, and ask another question you can quickly get another view of your data by easily drilling, filtering, slicing and dicing."

Question: Do you think Broadcasters, Cable Networks and Cable MSOs are ready for this?

Wayne: "We are seeing a significant interest in Business Intelligence across the largest corporations, so there is awareness. In some instances there are initiatives that are progressing on some scale in these companies and there are often small groups of individuals that are identified as having Business Intelligence responsibilities. In general however, with only a few exceptions, the efforts are modest in scale and goals. The real opportunity lies in a more ambitious execution across all elements of the business including digital, interactive and web revenues. This does appear daunting to many corporations as they take cautious steps into Business Intelligence, however it is possible to make this leap and fast track the execution. These projects do not need to be modest and take many years to execute. This is precisely what Decentrix does in taking the total organization and executing on broad, far reaching BI objectives. We can do this because of our deep knowledge of media and because we have developed a comprehensive process to "fast track" a total BI solution that can be implemented in a matter of months not years."

Question: You talk about getting answers to questions very quickly. Why hasn't this "Speed of Analysis" been solved in the past for Media Enterprises?

Wayne: "There are a couple of major reasons. The first could be termed Operational System Focus. Rightfully there has been a focus on next generation operational systems, and many millions of dollars have been spent in this area over the past decade. Starting in the late 90s with the Y2K upgrades to the more modern next generation traffic systems, substantial focus has been placed on making daily operations run smoothly. These systems all use technology purpose built for transactional speed and to solve their specific business functional area needs. The strategic corporate wide focus of BI had to wait until these issues were addressed. The second reason could best be stated as an opportunity whose Time has finally Come. The corporate need (because of increasing operational complexity) and the technology (because there are tools at last that can deliver fast and efficient BI) have finally dovetailed. Many Media executives are now recognizing they have the need and it is time to reap the benefits of this new technology for their corporate-wide decision making processes. Fortunately, BI technology has matured with an entirely new class of technology purposely built for this corporate-wide analysis and search-engine like speed to deliver fast results. BI solutions do not displace any operational systems currently in place; they simply sit over the top and provide intelligence when and how it is needed."

Question: Why should Media companies look to Decentrix for their BI initiatives?

Wayne: "The reason Media corporations turn to us today is because of our ability to economically deliver tangible BI results specifically for a media corporation in as little as three (3) months, which is unprecedented in any industry. Our value proposition is fast execution, significantly lower cost of execution and outstanding results. The challenge of utilizing large generic BI consulting corporations is that they rarely understand the complex nuances of the media business. Results fall short of expectations when industry knowledge is missing or lacking. Without having this knowledge Media companies can and do spend a lot of consulting time and money teaching consultants about their business. Inevitably you can't teach new people everything about a business in any short period of time. The team at Decentrix has spent their entire careers building technology solutions for Media corporations and they intimately understand the complexities of the data, the workflow and the reporting needs of the business. We bring knowledge and real solutions to the BI process that is quite simply priceless."