Strategic Imperative: Refocusing on Profitability
In an era marked by diverse economic and market challenges, a rigorous cost management strategy is vital to media organisations pursuing sustainable growth. However, with increased pressure on the top line (e.g. from declining referral traffic, print circulation and advertising revenues) as well as rising costs (e.g. in labour, supply chain, materials and technology), the route to financial sustainability is not always obvious.
FT Strategies’ ‘Path to Profitability’ (P2P) offering tackles these challenges head-on, providing media companies with a comprehensive framework to enhance profitability through targeted cost reductions and efficiency improvements. We provide practical methods to improve profits by focusing on four key areas; People, Process, Technology, and Capital Operating Expenditures (CapEx/OpEx), outlined below.
People: Enhancing Efficiency and Organisational Structure
- Improving Employee Efficiency and Organisational Structure
Efficient organisational structures are crucial for media companies to remain agile and competitive. Our 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 & Ways of Working
Enhancing the skill sets of employees and streamlining workflows are essential to boost 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 that their workforce remains competitive and adaptable to industry changes.
Process: Streamlining and Enhancing Operations
- Streamlining and Enhancing Key Processes and Operations
Optimising processes is a cornerstone of our P2P offering. This 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 underperforming 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 to minimise 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
For those media organisations that decide to focus on profitability, there are a number of significant benefits, including:
- Cost Savings from Streamlined Workforce
Streamlining the workforce and aligning roles with strategic goals leads to significant cost savings. - Reduced Costs in Content Creation/Production
Optimising production processes and schedules can significantly reduce content creation costs. - Bargaining Power/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/Performance
Adopting advanced digital tools and platforms streamlines workflows and enhances performance - Lower Overheads and Capital Generation
Streamlining operations and consolidating non-core assets result in lower overheads and capital generation.
Conclusion: Charting 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. FT Strategies ‘Path to Profitability’ offering provides a comprehensive framework to enhance the profitability of your organisation through targeted cost reductions and efficiency improvements. By implementing the strategies outlined above, your company can streamline its operations, reduce expenditure and enhance productivity, future-proofing your business and setting you on a path to sustainable profitability.
About the authors
George Adelman, Principal
George has over 15 years experience in strategy consulting and in-house advisory. Leading strategy development, service design and digital transformation teams, he has advised senior leadership across both the public and private sectors. He has an ACII and a Masters from the London School of Economics.
Jhanein Geronimo, Consulting Project Associate
Jhanein is an Insights Consulting Project Associate at FT Strategies that supports the ongoing development of media and subscription expertise. She studied BSBA Corporate Management (Summa Cum Laude) from Assumption College, San Lorenzo.
