Back-Office Systems Need Foward Thinking

While looking at the agenda for this month’s Media Outlook 2012 seminar, I got to thinking about Steve McIntosh’s contention that we are running 21^st century businesses with 20^th century systems. Steve was so passionate about this subject that he surveyed software vendors and wrote an article on the topic for the July/August issue of our member magazine, The Financial Manager.

After musing that he still didn’t have the promised jet pack, he observed, “In the context of the media industry, we have harnessed the technologies that brought us high definition, mobile and online TV, yet we struggle when it comes to back-office systems.”  

He went on to point out that many of his colleagues working in credit and collections are asking, “Why can’t our back-office systems accommodate the multimedia, multi-product business that our companies have become? How will these systems address the changes yet to be realized or envisioned? Are we poised for disaster?”

Television advertising is no longer limited to :30 spots. And the only time I see a :60 these days is when someone is trying to get me to send a check to save a child or a dog. Advertisers can now communicate their message with product placement, social media, pre-roll video online and apps for services like personalized weather. So why is it that back-office systems are still built on what Steve termed “old-media models”?

While legacy systems for billing and traffic were built as rigid all-in-one systems, “siloed” by media type, the industry’s new business environment requires the use of multiple systems to deliver the client’s message.  This also means that the accounting and billing is “cobbled-together.” Somehow these systems must provide verification for the metric that was actually sold by our account reps. It’s no longer “A spots at B rate equals C revenue,” Steve wrote. “We’re most often selling an audience and while the audience sold ‘lives’ within the value of those spots, the spot value actually reflects the audience that existed as an estimate at the time of sale, not the actual (audience)."

What happens when the outcome doesn’t match the advertiser’s expectation? “Three months after we bill our spots, we’re notified that our invoices are not being paid because of underdelivery and that the buyer and our sales folks need to talk. So what’s the problem? The spot values we billed reflected delivery of X number of GRPs (gross ratings points), and our delivery was significantly off of that figure, the agency believes. Thus,” said Steve, “the dance begins.”

In his opinion, “The system (technically and procedurally) we have now is, by its very nature, inefficient. In many ways, it’s actually designed to be that way. However, by continuing the status quo we chain ourselves to the past and forgo – or at least severely limit – our ability to capitalize on what the future may hold.”

Steve laid out the first step to a solution as recognizing that “we are one media industry.” Of course, this was and continues to be music to my ears because it’s the same conclusion the MFM board came to several years ago. 

The next step may be harder. Steve described this “tall order” as agreeing that something needs to be done, deciding what that something is, and then demanding it. Having joked that sometimes we may “prefer the comfort and consistency of the same old brick wall against which we can bang our heads,” he used the example of ePort and the time it took to make it a reality and suggested that it’s this part of the challenge “that usually sends us back to the brick wall.”

So how do we get through, around or over that wall? It takes individuals like Steve McIntosh who cannot only see what needs to be done, but are also driven to achieve it. “We’re standing at the brink of an exciting new frontier for media, not the end,” he wrote in this article for his industry colleagues. “We provide desired if not critical content to an unlimited audience that is no longer segregated by medium or limited by physical location or method of access. We can be highly effective providers of targeted, extremely valuable audiences to advertisers. Enabling our future is fundamentally a matter of the will to make it so.”

Unfortunately, Steve McIntosh is no longer around to help create the back office of the future that he described. McIntosh, who was VP and general manager of Belo Advertising Customer Service, a unit within Belo Corp., was taken from us tragically last spring. Recognized for his pioneering work on a number of back office initiatives, including an ambitious project that was bent on rationalizing co-op advertising script, Steve was named one of MFM’s “People To Watch” in January 2011. We join his family and colleagues at Belo and throughout the industry in mourning his loss.