Executive Checklist to Transitioning Processes
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1 Digital Innovation Series Executive Checklist to Transitioning Processes Building a Flexible Model
2 The Digital Innovation Series traces the trends that are driving the digital-innovation imperative that has led publishers to scrutinize and update their capabilities.
3 Digital Innovation Series Executive Checklist to Transitioning Processes To take advantage of new digital business opportunities, a publishing company s executives must set a clear operational agenda that strikes the right balance between building its in-house capabilities and infrastructure and partnering with a service provider for greater agility. The goals? To embed efficiency gains into the operation, develop morestrategic relationships with agencies and brands, and optimize processes and organizational structures so the company sharpens its ability to continually adapt to fast-paced change. Heightened consumer demands for content; shifts in the ways people access media; brand and advertiser expectations; and a crowded and expanding competitive market are fundamentally changing the ways publishers run their operations. To keep pace, both incumbents and new players in the digital ecosystem must become more flexible and more innovative. In addition, strategies must evolve to take into account the drastically changing advertiser-agency-media value chain driven by brands desire to deliver a complete consumer brand experience. Compounding the challenges around those changing trends and the need to constantly innovate are infrastructure demands, as agencies and advertisers (1) mandate the use of certain standard platforms, specific tools, and prescribed applications and (2) put in place several new reporting requirements. Given the rapidly changing environment, how do publishers acquire the necessary skills and capabilities, compete in new channels, make required investments in technologies and infrastructure, and remain agile and responsive enough to prepare for current and future trends? A key to unlocking those business growth challenges lies in working with an external partner to explore approaches that will help gain a competitive advantage. The transitioning of processes to a partner is a common practice in nearly every industry and has been a successful strategy for publishers for more than a decade. Partnering with an external provider can enable a publisher to work efficiently and economically while providing enhanced value for itself and its clients. The transition to a third party can be made without compromising quality or profitability. In so doing, a publisher can move to a cost model that lets its core competencies and expertise remain in-house while noncore, operational functions shift to an experienced service provider. This Digital Innovation Series traces the trends that are driving the digital-innovation imperative that has led publishers to scrutinize and update their capabilities. It explores the disruptive break-throughs that are forcing companies to make sure they continue to grow and add value for their customers in the forms of advertisers and readers and listeners and it discusses ways companies are reinventing their models by applying best practices, by developing and expanding new talent, and by working more closely with consultants and partners. The Series uncovers various ways both traditional publishers and the new wave of digital-only content publishers are tackling and overcoming challenges so that they position themselves for success now and into the future by creating cultures of continuous improvement. Theorem
4 Digital Innovation Series Transitioning Processes: Activating Digital Strategies When a publishing company s executives are evaluating options for activating digital strategies, they must assess those strategies relative to in-house capabilities, skill sets, and bandwidth. Vetting external partner decisions should be based on careful analysis of internal business process capabilities at the functional level, with wellplanned strategies for transitioning certain processes to an external provider. Tangible benefits weighing in favor of outsourcing could include reducing the costs of activities and/or lowering turnaround times, lessening the complexity of certain processes, and having the right infrastructure to enter new markets. Intangible benefits might include introducing best practices, expanding services, diversifying platforms, or even complementing already existing capabilities. Flexibility and Insight Beyond bandwidth, cost savings, increased profitability and reduced turnaround time, other possible factors in the case for outsourcing could be return on assets and the satisfaction and retention of highly skilled employees who get freed up to focus on strategic, value-added activities. After all, in a market that is changing at breakneck speed, retaining an organization s institutional knowledge while building skill sets to keep in step with new innovations can be incredibly challenging but more achievable when certain time-consuming tasks get outsourced. In addition, research proves that the bigger an organization is, the more complex its infrastructure is. Outsourcing gives publishers the opportunity to increase their adaptability, allowing certain functions and processes to be managed in decentralized and more autonomous ways and without potential administrative burdens and overhead. The transition of time-consuming processes to an external provider can lead to intellectual insight and staff growth. It s impossible to possess and retain in-house all of the knowledge and capabilities needed to excel in the publishing world with the speed and impact we re seeing today in media, entertainment, and content creation. When an organization collaborates with a service provider whose competencies complement the organization s own core capabilities, the organization adds to its business 1 significant value 2 a means for knowledge transfer 3 ongoing infusions of innovation Theorem
5 Executive Checklist to Transitioning Processes Five Questions to Ask Questions to answer while building a transitioning/outsourcing business case are: 1 Well-established What is the partner s process for building a collaborative client/partner team? methods include: conducting brain storming sessions within the team, establishing regular sessions for knowledge sharing, recognizing and appreciating team members who are doing well, giving compensatory days off when an individual works on weekends and reviewing individual performance periodically and providing feedback 2 It s How will the partner build relationships within your company and stay close to your business? important to ensure that employees at both companies buy into the outsourcing concept and communicate well regarding the purpose, strategy, expectations and what is at stake business-wise. It is also crucial to make sure people meet in person whenever possible to forge solid relationships between staff members. 3 Key What should be included in the Service Level Agreement (SLA)? SLA terms include: employee training specifics, the right to audit work, team member terms/staffing changes, escalation processes and turn-around times. 4 Most Does the partner have a Business Continuity Plan? companies have Business Continuity Plans in place to reduce productivity impact in the event of a mishap or calamity. Make sure you ask to review this plan and the aspects that are specific to your partnership in detail. 5 How long will it take the partner to move from start-up mode to a more proactive mode? Proactive mode can be subjective, therefore solid target dates and measurements should be agreed upon in advance by both parties. Some factors to consider include how well your current processes are documented/sharable, what the buy in climate is at your company and how much time you will have to train and work closely with the partner to get them up and running independently. TWO THREE
6 Digital Innovation Series Using Managed Services: Areas to Consider Organizations decide to transition processes so they can streamline their operation through more-efficient organizational structures that are aligned to their digital work flows. They choose partners that are organized for agility in other words, partners with mature and scalable capabilities that will support a broad range of highly complex tasks. Following are five common areas publishers could consider for outsourcing. Ad operations As publishers scale up their digital capabilities and take advantage of automated media buying, the volume of work can exceed the level many publishers are able to manage. Creative/production Creative aspects from conceptualizing and the design component to the development and production component, to placing and enabling an ad demand significant time and considerable personnel bandwidth; and the volatility surrounding the quantity and quality of work is challenging. Reporting and analysis Outsourcing this activity gives publishers a head start on creating insights for clients on campaign outcomes and revenue spend and especially involves morecomplex patterns (i.e., digital versus mobile). As a result, campaigns can be optimized more rapidly. Content auditing Between ads, Web sites, and apps, this area of publisher review is becoming more demanding and is vital to both clients and a publisher s overall business cycle. marketing A standard value-added offering for publishers, marketing can be outsourced without jeopardizing a publisher s brand or subscriber list. Theorem
7 Executive Checklist to Transitioning Processes ROI of Transitioning Processes: Plan for Success As a publisher builds out a business case for transitioning its processes; the two most important areas to develop are (1) performance measurement criteria and (2) a return-oninvestment (ROI) model. As time-consuming as this process may appear, it s crucial to ensure that all stakeholders both within the organization and at its partner be on an equal playing field, working toward common goals. The initial objective is to develop baseline benchmarks that estimate cost, timing, and resource allocation for the areas the publisher plans to outsource. Doing so will result in a better understanding of internal performance limitations and potential improvement strategies and enable an organization to identify suitable performance measures for implementation. Selecting a Partner Ensuring partner alignment from an organizational, cultural and experience standpoint is key to long-term success. The process to vet a partner can take many routes but all should be based on a rigorous exercise that includes key stakeholders. In the earliest stages, organizations should assess the potential partner s delivery sites, discussions with references, review of the company s management experience, and data security and risk management plans. During the due diligence period, organizations may consider site visits and a full review of documentation, procedures and policies to ensure partner processes are in line with the organization s philosophy and its own guidelines. The Culture Factor Strategic outsourcing is an extension of your company, therefore cultural compatibility is not something to overlook. Be realistic about the culture that prevails in your organization and to do this, look beyond the formalized and written mission, practices and policies of the company. The informal culture what really happens may be different. An honest dialog between both companies must then take place to discuss how the cultures of the two companies complement each other. If not, the outsourcing strategy may take longer to complete or will present future challenges down the road, as policies and practices begin to clash. Consider a Pilot Program A test run, or pilot program will give your company an opportunity to review just how effective and efficient the potential partner s project management process is. Typically, these pilots are conducted on a small project basis. A pilot provides the chance to see if deliverables, quality standards and terms of the SLA can be met and gauge if outsourcing benefits will be realized. A short-term pilot program should allow enough time to ensure that the partnership is a good fit before signing a long-term contract. FOUR FIVE
8 Digital Innovation Series The RFP Process For organizations with a more formal procurement process, there may be a need for request-for-proposal (RFP) process, which can be indispensable in the selection of the right partner for the long term. In the RFP, the publisher should include both quantitative and qualitative factors to ensure effective alignment between the companies. Following are several factors to evaluate. Domain Expertise Capability Technology expertise Mature Infrastructure Scale Track record Proven practices Flexible work flow Business culture alignment Approach to service-level agreements (SLAs) Business value additions Once an organization has guidelines and criteria, it s important to weight, or prioritize, each category in the RFP and apply a point level or grade to each service provider being considered. Ratings can be further weighted by importance of the activity. Theorem
9 Executive Checklist to Transitioning Processes Strategy in Practice A large network of premier sites, publications, newspapers, and local Web sites turned to Theorem for support in the areas of ad operations, reporting, and analytics to help it manage the rapid growth and increased complexity it was experiencing. Theorem s agility and expertise in key areas have enabled client teams to focus on their core capabilities, such as account management, analysis, and identification of areas for increased revenue. The analytics and reporting capabilities the client network tapped into at Theorem enabled the client s executive team to get quick snapshots of key business trends, site performance, and business unit metrics, after which issues could be addressed quickly; areas to optimize got pinpointed; and customer satisfaction levels increased. Overall, the client s profitability has increased because of Theorem s costeffective staffing solutions; employee turnover is low; and job satisfaction level is high. SIX SEVEN
10 Digital Innovation Series Executive Checklist to Transitioning Processes The Importance of SLAs A service-level agreement between the company and the partner ensures duties and responsibilities get outlined precisely and agreed upon. All that will be done, how it will get done, and when it will be delivered should be clearly presented in the SLA, whose major objectives are to confirm deliverables, monitoring, milestones, performance measurements, and all financial agreements. Final Note: Communication Is Crucial In order that the client/vendor relationship run smoothly, it is essential that a publisher s strategic outsourcing plan be well understood by employees in both organizations. A seamless onboarding process and detailed communications plan are crucial to success. Key executives must be identified and held accountable both individually and as a team. In addition, senior leadership must be actively engaged, and supporting the process and relationship. For publishers, the strategic outsourcing process is not necessarily a linear one, and a well-designed preplan selection process and performance management strategy will remove much of the guesswork. With proper planning, publishers that dedicate themselves to a more agile business model have the best chance of unlocking their full potential so they can stay ahead of competitors in an increasingly competitive business. Theorem EIGHT
11 Main Street, Chatham, New Jersey Theorem delivers a full range of flexible, tailored solutions to help organizations cost effectively and efficiently manage digital marketing initiatives across the entire digital landscape. We enable rapid activation of programs through a model that leverages domain specialists, digital best practices and a deep digital track record. Theorem optimizes digital programs by seeing the full picture getting clients on the right path and overcoming all obstacles along the way. For more information, visit us at Theorem, Inc. All rights reserved. THEO01_060115
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