>>> Strategy
<<<
The ability to think strategically is one of my core competences
- ie. the ability to identify and clearly articulate the core issues that face a
business - especially, though not limited to, technology issues that impact media
organisations.
But I live in no ivory tower. Hands-on,
commercially-driven projects keep up my technical skills. Practical project
experience complements strategic analysis -
and vice versa.
Strategy is best done, and owned, by managers who have to live
with its operational consequences. I can help an organisation identify strategic options,
but this is best done in collaboration with managers who should ultimately take
the final decisions since they will have to implement them.
As Director of Technology Strategy at the Financial Times I was
constantly asked to give guidance to the CEO, CTO and other commercial
directors, and to write strategic papers on a wide range of subjects. Some
examples are given below:
 | The potential of Digital Print for newspapers |
|
Summary: Digital Presses
are much smaller than conventional offset presses and require a fraction of
the capital investment since the entire edition can be produced on a single
press unit. They can be housed in much smaller print operations and, while
costs per copy remains higher, become economic for short runs since they
remove start-up costs of plate-making and initial wastage. Availability of
machines in commercial printers at locations newspapers want to access is
more important than technological breakthroughs.
Benefits:
| Decentralised production model: So newspaper printing becomes
feasible at a larger number of smaller commercial printers, facilitating
the potential fundamental change to a a more distributed production model
where newspapers may be printed closer to readers one step down the chain
at distribution hubs. This is already thinkable editions destined for
distant regions (like Cornwall, northern Scotland and Ireland for
London-based papers). Readers will later editions (ie. fresher news) while
producers can cut distribution costs. Requires: production
costs equal to offset; and overcoming of limitations in format. |
| Greater reach / international expansion: Late editions (with
fresh news, sports results, closing stock market prices etc.) reaching
remote regions and international markets. |
| Day A (breakfast time) delivery
to international readerships. |
| Low risk market trialling: eg. FT trials that proved viability
of market in South Africa, leading to opening of conventional offset print
site. (Note: digital printing can become a victim of its own success!) |
| Small home-town newspapers available internationally: once
infrastructure in place. |
| On-Demand Newspapers: at point-of-sale, though automated kiosks
or printed overnight by hotels, on cruise ships, or at international
conferences and major sporting events like the Olympics. |
| Customised products: Variable Data Printing capability
potentially facilitates targeted advertising and editorial content -
customised editions (regional, niche market and/or personalised). Also
facilitates personalised subscriber information. Requires:
excellent content management systems. |
Limitations and brakes on immediate exploitation:
| Speed and Throughput: low per page, very low per copy. |
| Limited format: max size rough Tabloid - smaller than Berliner,
half the page area of UK broadsheet. |
| Lack of Colour: not yet available for web-fed presses that
produce folded newsprint. Expensive for sheet-fed, that produce
stapled (or glued) A3 photocopy paper which, in any case, do not have look
and feel of a newspaper. |
| Higher cost per copy (approximately six-fold) - largely due to
use of toner rather than ink. Note that costs are much closer for short
runs because conventional printing is uneconomic for runs below about
10,000 copies. |
Key Players:
|
Océ Digital Newspaper Network (DNN) |
| Newspapers Direct |
Bottom Line:
| Potential to fundamentally change newspaper distribution model for
distant regions if format limitations are overcome, throughput is doubled
and production costs are halved. |
| Incremental revenue opportunities now for overseas printing in major
cities through Océ DNN, or on-demand printing at major business hotels
through Newspapers Direct. |
|
| The case for server consolidation in the data centre |
|
This paper identified all the pros and cons of
consolidating all the applications running on 100+ small Unix and Windows NT
servers in the FT data centre onto a pair of mainframe class Unix (initially
Sun E10,000 "StarFire" Solaris) servers and high capacity and performance NT
servers from Compaq.
Advantages:
| Manageability: much smaller number of systems to monitor, single
operating system level and configuration, and standard procedures for
back-up, fail-over, disaster recovery etc. |
| Scaleability: Systems are highly scaleable in terms of additional
processing capacity, mass storage etc. |
| Flexibility in capacity planning: Systems can be over-configured by
supplier at no (apparent) cost to the customer. Then computing power can
be switched in on demand as needs emerge. |
| Flexibility in allocation of computing power to different applications
at different times - for example, newspapers require production capacity
in the evening and overnight and capacity for commercial systems during
the day. Web operations require different capacity at different times of
the 24-hour cycle as differnt parts of the world (notably the US) become
more active. Accounts need additional capacity at end of month. |
| Simplifies options for outsourcing - of main operations,
additional capacity needs or disaster recovery/business continuity. |
| Economic advantage of switching to a leasing deal. |
Principal Drawbacks:
| Risk of multiple catastrophic failure: Although these mainframe-class
machines are high quality and designed to be very highly available with
domains running applications electrically isolated from one another, a
total machine failure cannot be ruled out. In this case fail-over routines
must be perfect and the second mainframe must have sufficient capacity to
run all the applications with the the necessary performance. The
impact on the organisation of all applications failing at once, not to
mention the ability of system managers to cope with all the technical
problems and communicate with all departments at once, would be much
greater than a single application failure and could be catastrophic. |
As a result if this work, the FT initially bought Sun E10,000
Starfire servers for the newspaper and separately for FT.com. As the two
businesses were later merged, the same principle was extended to leasing
higher performance and even more flexible Solaris machines from Fujitsu in
2002.
|
| The business case for the company's main strategic business change
programme - system replacement leading to integration of print and
on-line production and enabling more localised international editions
facilitating greater flexibility in advertising sales and other business
benefits. |
|
Details of this exhaustive business case
analysis must remain confidential. The multi-million pound project could
be justified economically by savings in production costs (for example
through the judicious planning of international editions to reduce
unnecessary consumption of newsprint and ink), plus reduced equipment and
licensing costs and the avoidance of costs that would otherwise have
inevitably have been incurred.
In addition to many soft benefits like the more targeted international
editions better suited to local readers, there were many significant revenue
opportunities such as the advertising opportunities through greater
flexibility in selling different sized ads in different editions, and
syndicated content sales opportunities. But these revenue opportunities were
not relied upon in the business case as they were considered less certain
than savings, especially in 2001, the time of the worst media-advertising
recession anyone in the business can recall.
|
