Strategic, efficient use of people, process, tech are at the heart of cost management

In an era marked by diverse economic and market challenges, a rigorous cost management strategy is vital for media organisations pursuing sustainable revenue.

However, with increased pressure on the top line (declining referral traffic, print circulation, and advertising revenues) as well as rising costs (labour, supply chain, materials, and technology), the route to financial sustainability is not always obvious.

Reaching financial stability requires a strategic mix of managing people, process, technology, and capital operating expenditures while keeping external pressures in mind.

In this article, we explore practical methods that will help media organisations improve profits by examining four key areas: people, process, technology, and capital operating expenditures (capex/opex).

People: enhancing efficiency and organisational structure

• Improve employee efficiency and organisational structure: Efficient organisational structures are crucial for media companies to remain agile and competitive. The best approach involves redesigning organisational structures to improve efficiency and reduce costs. By streamlining the workforce, aligning roles with strategic goals, and fostering a culture of collaboration, companies can enhance productivity and adaptability.
• Skills and ways of working: Enhancing the skill sets of employees and streamlining workflows are essential for boosting productivity. This involves continuous training programmes, adopting flexible work arrangements, and leveraging collaborative tools to improve team efficiency. By fostering a culture of continuous improvement and innovation, media companies can ensure their workforce remains competitive and adaptable to industry changes.

Process: streamlining and enhancing operations

• Streamlining and enhancing key processes and operations: Optimising processes includes reviewing and refining workflows to eliminate inefficiencies and redundancies. By leveraging data and analytics, companies can identify bottlenecks and implement process improvements that enhance overall efficiency. Streamlined operations lead to faster decision-making, reduced costs, and improved alignment with strategic objectives.
• Production costs: Aiming to reduce the costs associated with the creation and production of content is crucial. This involves optimising production schedules, negotiating better terms with suppliers, and leveraging economies of scale. By focusing on cost-effective production methods and utilising technology to automate repetitive tasks, media companies can significantly reduce production expenses.

Technology: delivering tech efficiencies

• Digital efficiencies: Optimising digital operations to reduce costs and increase collaboration and reach is critical in today's media landscape. This involves adopting advanced digital tools and platforms that enhance content creation, distribution, and monetisation. By streamlining digital workflows and improving user experience (UX), media companies can drive efficiency and boost profitability.
• Reduced reliance on physical infrastructure: By shifting to cloud-based solutions and reducing reliance on physical infrastructure, media companies can lower operational costs and improve scalability. This transition not only reduces overheads but also enhances the speed and flexibility of digital operations, enabling companies to respond swiftly to market changes.

CapEx/OpEx: optimising capital and operating expenditures

• Business/product consolidation: Streamlining assets and functions that are not adding value and focusing on more profitable areas is another key aspect of our approach. This includes consolidating under-performing business units, divesting non-core assets, and prioritising high-margin products and services. Such strategic consolidation helps in reducing overheads and generating capital for reinvestment in growth areas.
• Efficient supply chain management: Enhancing the efficiency of supply chain and distribution networks is essential for minimising costs. This involves adopting just-in-time inventory practices, optimising logistics, and renegotiating supplier contracts to secure better terms. By improving supply chain management, media companies can reduce wastage and ensure timely delivery of content.

Cost benefits: targeted savings across the board

Media companies seeking to improve profitability through strategic cost management can expect a number of significant benefits, including:

• Cost savings from a streamlined workforce. Streamlining the workforce and aligning roles with strategic goals leads to significant cost savings.
• Reduced costs in content creation and production. Optimising production processes and schedules can significantly reduce content creation costs.
• Bargaining power and enhanced supplier negotiations. Strengthening bargaining power through strategic supplier negotiations and optimised production schedules helps in reducing costs.
• Enhanced employee productivity. Continuous training and development programmes, coupled with streamlined workflows, boost employee productivity.
• Streamlined digital workflows and increased speed and performance. Adopting advanced digital tools and platforms streamlines workflows and enhances performance.
• Lower overheads and capital generation. Streamlining operations and consolidating non-core assets results in lower overheads and capital generation.

Conclusion: cost management and the path to profitability

In the face of significant financial pressures, media organisations stand at a critical juncture to ensure their future sustainability through strategic cost management.

By implementing the strategies outlined above, your company can streamline its operations, reduce expenditure, and enhance productivity, thereby future-proofing your business and setting you on a path to sustainable profitability.

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About the Authors

George Adelman is a principal at FT Strategies in London, United Kingdom. George can be reached at @FTStrategies.

Jhanein Geronimo is an associate consultant at FT Strategies in London, United Kingdom. George can be reached at @FTStrategies.

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