Collins | Solving The Complexities Of Software Solutions
Years ago, when I worked for a company that was helping cable operators offer the first internet access to their customers, senior management decided the company should build a custom billing solution to support the product. What followed were time and cost overruns that hastened the company’s decision to declare bankruptcy.
The thinking behind the plan to build the software was sound. The company needed to capture specific customer usage data as well as aggregate usage data from each cable company client to calculate revenues. It was the decision on how to proceed that was the problem.
Two things reminded me of this experience. The first was sitting in on one of MFM’s virtual conference sessions about auditing financials produced using new software solutions. The other was an article in the May/June issue of MFM’s member magazine, The Financial Manager, written by Symphony Media AI’s Ashley Kindsvatter and Karin Bleiler called “A Hard Look at Software Solutions.”
The authors begin by pointing out that many media companies still rely on a suite of services from Microsoft Office to track non-traditional revenues because of its “dynamism and easy adaptability.” However, Office does not include built-in business logic that speaks directly to the intricacies of such media industry billing. These arrangements can include massive amounts of data along with limits on lookback periods. These experts believe that what the industry needs to nurture and grow non-traditional businesses are sophisticated tools that can track abnormalities in reporting and payments.
Yet, the process for acquiring those tools can be “complex and protracted.” It becomes a complicated make-or-buy decision. Fortunately, they offer some basic steps to make the evaluation. Any new software process transformation, they say, should begin by asking three questions:
- What are the costs?
- What are the business requirements and pain points to be resolved?
- How will the software solution be implemented?
Cost is frequently the driver in the discussion according to Kindsvatter and Bleiler. Nevertheless, they say to arrive at the best, most impactful answer, the other two questions must receive equal weight. Investing the time to determine how a fully implemented software solution will meet the company’s requirements, now and in the future, could end up saving money over the long term. They go on to explore options.
Custom Build — The Make Decision
The media industry is unique because of its “dynamic and complex reporting structures.” As such, there are not many solutions from which to choose. The authors pose the question, “so why not build one? How hard can it be?”
This build-your-own or custom enterprise resource planning (ERP) solution has been used for HR, sales and marketing functions across several industries. Yet, as the authors point out, the finance function in media and entertainment has lagged in its embrace of “productivity-enhancing software.”
There are three drivers of the overall quality of the software solution the authors say — time, cost and requirements, which they call the “software triangle.” Yet Kindsvatter and Bleiler believe that, in general, only two of the three are ever captured successfully. Their question is, which of the three can the company afford to pay more for, and/or, which of these can it afford to forgo?
Determining the answer, they say, requires successfully capturing business requirements and communicating them to decisionmakers and developers. The challenge comes when translating a company’s requirements into a successful software application that works within the department’s workflow.
Success requires time and attention to detail to determine what resources are required. This means communicating, “process flows, expectations and coding guidelines to developers, solution architects and technical experts.” The business side must be as involved as the technical side, they caution. “The biggest mistake an organization can make is to have developers and the tech team write code without having clear, documented requirements.”
If the company opts for this solution, the experts recommend employing what they refer to as “Modern Agile software development methodology.” In this scenario, the deployment is guided by four principles: “make people in a company’s ecosystem feel happy; deliver value; prioritize safety; and experiment and learn quickly.”
The process shortens development time and cost but requires that project managers and sponsors “devote substantial time and efforts and have the authority to make key decisions about overall scope.” This methodology also considers future growth, which means substantial involvement from the company’s business analysts.
Maintenance of the system also needs to be a priority. Kindsvatter and Bleiler say the company must ensure its team “can and will always be able to quickly respond to new requirements, bugs and industry changes.” Finally, they stress that the software application must support all of a company’s key stakeholders. This requires usability testing. They recommend involving end users in the process, gaining their support and solicit users’ feedback
Pre-Built Software — The Buy Solution
A pre-built solution may be a viable option if the team is equipped with the “right questions, business needs and domain knowledge.” Just as with the make decision, the company needs to know what will work best for the enterprise and consider all costs. For companies going this route, the two suggest purchasing from an established service provider and making sure the solution is scalable. They also say that it’s imperative to understand customer service and support options as software issues are “inevitable.”
The selected provider needs to understand the unique aspects of the business and be willing to work as an extension of the organization. Decisionmakers must ensure the support team is readily available and able to respond when needed, “thereby reducing cumbersome back-and-forth” and providing the company with confidence that “issues will be addressed expeditiously and completely.”
Considering how the software solution affects the team and its effect on IT and hardware is imperative, say the authors. They point out that not all pre-built solutions run over the internet or can operate as a cloud-based solution. Rather, the software may require on-premise servers. This means the software will need to be loaded onto the company network and behind its firewalls. Such maintenance and IT issues contribute to overhead and should be factored into the overall cost.
Another consideration centers on upgrades and bug fixes. Does the solution include upgrades, how frequently are such upgrades released and do these upgrades mean incremental charges to the company?
Choosing a system that works for the company in both the short and long terms, one that “positively impacts your workload and provide efficiencies to your team” is the end goal. If you keep that in mind, the outcome can result in substantial efficiencies, increased business insights and revenue opportunities, the two conclude.
“A Hard Look at Software Solutions,” also includes a sidebar piece, “Asking the Right Questions.” A digital copy of the complete article is currently available on MFM’s website.
Get FIT (Finance/IT) For The Future
If you are interested in learning more about software solutions for media companies, I encourage you to sign up for Media Finance Focus 2020’s virtual keynote session on Tuesday, July 14. This two-part session begins with a media and entertainment industry outlook by Deloitte’s Kevin Westcott.
That will be followed by “Get FIT for the Future,” during which Sinclair’s Chief Information Officer Brian Bark will look at the question of how technologies such as cloud, machine learning and blockchain are helping companies begin to create, rethink, or reimagine their digital strategies. He will help participants understand the fundamentals and shape the current environment as we get FIT for the future. Conference session descriptions and registration information are available on our conference website.
Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary, the media industry’s credit association. She can be reached at [email protected] and via the association’s LinkedIn, Facebook, Instagram, and Twitter accounts.