The way we do business is changing. No other sector understands this better than the Media and Entertainment titans that have been navigating digital transformation, streaming services, and “cord cutters” for years.
We sat down with Jim Martindale, CEO of Navint Partners and Media and Entertainment finance veteran, to gain some more insight. He’s spent over 20 years helping global conglomerates with finance, technology, and operational transformations such as ERP selection, migration, and business process improvement.
Q: You’ve been working with some of the world’s largest enterprises for almost 2 decades. What changes have you seen when it comes to finance and ERP?
It’s really gotten quite interesting over the past 5 years as the landscape shifts. In the 90’s, a lot of organizations desired a big, single-instance ERP solution. Oracle, SAP, PeopleSoft, and others grew, folding more features and functions into their platforms. This trajectory stayed consistent until the mid-2000s.
Today, we’re seeing a proliferation of cloud-based apps inside organizations’ operations and business process cycles. It’s rapidly becoming best-in-breed solution set, rather than a single ERP platform to solve their needs. Deep specialization is occurring and introducing new products into the market in the areas of billing and monetization, AP and purchasing, and treasury and cash management. We are seeing the separation of HR and training management solutions once again.
Now, our clients are asking us to help them navigate these best-in-breed technologies and business process architectures to fit within their unique organization.
Q: Why do you think people are moving in the direction of breaking apart the ERP into discrete applications?
Cost and opportunity. Cloud-based technologies make it much easier and less costly to initially enter the market. The big legacy applications are expensive to build on the vendor side, and costly to “rip and replace” on the client side. So, clients are often piloting applications in one part of their business first without disrupting the big ERP workflow.
As I mentioned before, we are seeing deep specialization in niche areas that ERP was trying to solve on the whole for everybody across the entire lifecycle. It’s really, really, difficult for an ERP application to be highly specialized when they are designed to do all things reasonably well for the masses.
Finally, and perhaps most important, is data and integration. The barriers in integrating apps is much less than it used to be. We’re helping our clients and solution providers integrate fairly seamlessly into different pieces of technology while reducing the effort, cost and maintenance associated with it. Data is moving more freely between applications and technologies, with data management becoming a much bigger piece of an enterprises architecture. It’s just much easier to operate in a best-of-breed model.
Q: When a client brings Navint into their organization on an ERP project, what are you discovering?
When a client engages Navint in any sort of ERP project, we often find that the pain they are feeling is often times due to failures in their business process architecture. They are having problems sustaining growth, launching new products and services, dealing with international complexity, bringing new offices online, and managing unique and one-off business processes. They are struggling, and they typically blame the ERP system or lack of capability.
The ERP application is certainly a component of the overall business process architecture, but it’s only one piece of it. We come in and look at the core business processes and typically find that their future growth is centered around what we call the Continuous Customer™ and recurring revenue business models. Yes, you need a more scalable, multi-national core finance system, but you also need better analytics. You need data management and a core system to help deal with the different revenue streams that the legacy ERP application can’t support. And, you need direct line of sight into customer behavior and purchasing habits.
Essentially, we go from what’s categorized almost in a naïve sense of an ERP project, to a business process architecture and technology selection which could include anywhere between three and five various products to round out the right solution set to hit their growth and scale objectives.
Q: You have an extensive background working for some of the largest logos in the Media and Entertainment market. What shifts are you seeing there?
Media and Entertainment is experiencing a dramatic shift from traditional product lines and advertising sales models, to digital assets, content creation and ownership, and numerous monetization models.
For example, one large publishing conglomerate owns 100+ titles worldwide, and it’s fairly sizable and complex operation. They produce magazines and develop relevant content. But, the core business is selling advertisements into those printed magazines. That’s fine, but it’s a dying business. Everything is being digitized: online subscriptions, online delivery of media, online delivery of content, and the sales of digital advertising in its many different variations. This company is now struggling with a multi-billion dollar declining business that’s required to fund the building and acquisition of digital assets that are not yet profitable.
It’s a widespread problem in this sector; running their old and declining business while trying to grow the digital business. This includes the set of systems, business processes, and people that’s geared to selling in the old world. Now, they have to create new business processes, find new technology, and develop talent to deal with the new world. The challenge of remediating legacy-based business systems vs. investing in new business systems is difficult.
Q: Can you elaborate more on the evolving business models and the Media and Entertainment sector and the challenges that presents?
Absolutely. Here’s another example. About 7 years ago, a large media company, that owns several cable channels, a theatre, a film company, and streaming services, was a spin-off of a larger conglomerate. I mention the spin off because it’s important to remember that media and entertainment companies are constantly acquiring, merging, spinning-off, and developing new services—keeping their operations in a continuous flux simply due to changing hands.
The business model for this particular media company used to be quite simplistic. Essentially, they would license their content library out to cable operators, networks, and channels and have a very definitive monetization model for those shows. Today, that same library is being monetized in numerous ways with folks like Netflix, Apple, Hulu, Google, and Amazon, as well as dozens of others, sometimes including their own platforms. Often times the company doesn’t have transparency regarding key performance metrics of the titles, including how much money is due to them. They basically have to wait—wait to be told from the content delivery partners what they think they are owed.
This makes it incredibly difficult for an organization to forecast, manage cash flows, and efficiently make the complex rights and residuals arrangements across the portfolio. For every show that is produced or purchased, there are rights and residuals due back to all the investors. It gets inherently more complicated to understand the residual hierarchy when it’s not even clear who’s airing or paying for those shows. And because content is becoming much more valuable, we even see clients split themselves into distinct public entities; one entity focuses on the legacy, flagship business, while the other establishes their monetization models and processes for the future. This evolving complexity is something we’ve not seen in some time.
Q: So, here’s the million-dollar question. Why do companies choose to work with Navint?
First and foremost, it comes down to experience. We’ve worked with organizations on business process and technology transformations for over 20-years. We’ve been inside both large enterprises and high-growth rising stars, navigating through the tough changes necessary to hit the growth objectives they’ve set.
Second, we are a client-first firm. We work on behalf of our customers rather than technology, vendor, or partnership. We are truly agnostic. Our clients appreciate that we don’t arrive with a predisposition and try to force-fit their business into a pre-defined box. We help transform their business in the way that is unique to them, with tried and true methodologies, toolkits, and best-practices.
This leads me to my third reason. Because we’ve worked beside many of the first-movers in business transformation, we’ve become very good at helping companies work through their old paradigms, mapping out where they are heading and finding new ways to discuss their future-state solution. We know how to engage our clients in solving complexities by thinking about their business in non-traditional ways instead of just throwing out their technology architecture. People are having a hard time understanding the various ways they could monetize their solution offering, let alone operationalize the complex pricing, entitlements, delivery, consumption, usage, and selling methods. Navint helps our clients with all of it, and our approach, experience, and methodologies result in an extremely high success rate.
For more information about Navint’s Technology Services or work in Media and Entertainment, contact firstname.lastname@example.org.