Volume 5
Spring 1999

In this Issue:  Consolidations & Shakeouts Best Practices Snapshots in Outsourcing Management Tactics


Management Advisory "Position yourself as the solution."  Milt Thomas, Coca Cola, Management Topic Go Round, CMMA Spring 1998 conference.

Consolidations & Shakeouts 

The last few months have not been kind to corporate media departments. On March 1, 1999, the video department at Pharmacia & Upjohn, Kalamazoo, MI, was bought by manager Michael Betz and two of his associates. P&U is consolidating management and marketing functions in New Jersey and will outsource all media production. The Video Center, located in a separate building off campus, houses audio and video studios and post production facilities and retains the P&U video library. We wish Michael and his partners success in their new venture.

The merger of Amoco and BP (British Petroleum), led to closure of the Amoco video network, based in Chicago, this past January. Though BP has an extensive VSAT network for their service stations and convenience stores, video communications is apparently not considered valuable. This is not the first time BP has closed media facilities in companies they have bought out. Manager Mark Klocksin is now looking for another position.

Ameritech's recently upgraded digital production studios in Chicago were closed down at the end of the year in anticipation of the merger with SBC Communications. The company felt it could be more attractive to stockholders and potential merger partners, by relying more heavily on outsource providers. The facility had recently been upgraded to a fully digital multiple media production support operation.

The AT&T Video Resource in Piscataway, NJ, was closed on April 1, 1998. The studios were built in the 1980's, when AT& T moved its headquarters from New York to Basking Ridge, NJ. The studios were designed to serve a large number of scattered AT&T business units and also become a major commercial production facility serving the NY Metropolitan market. For a long time that formula worked, but the trivestiture, combined with the arrival of a new CEO and the need to further cut operating costs drove the decision to consolidate all video production in corporate Public Relations. The equipment in Piscataway was sold off through an independent broker, with no expansion planned for the relatively small Basking Ridge facility. 

Best Practices 

Prototyping is a best practice which warrants serious consideration. Originally a standard in manufacturing, in this instance the concept is derived from reengineering, where business processes are redesigned and tested to validate their feasibility. The Procter & Gamble practice, along with that of several other world class production organizations, is to set budget money aside specifically for the purpose of developing prototype media deliverables. As example, uncovering an unmet client need might lead to developing a CD-ROM. The media department contributes the media expertise and cost of production while the client only need provide content expertise and agree to test the CD-ROM under actual conditions.

If the deliverable proves to be successful, it then serves as a demonstration piece the media department can use in marketing services to other departments. One option is for an agreement with the client to contribute to the cost of production if the deliverable proves valuable. In these days of tight budgets, how can a media department find the means to fund prototyping? The fact is, it's always possible to find a way to squeeze a few dollars here and there. The largest prototyping investment is time, which can always be found for the right cause. Outside suppliers or equipment manufacturers looking to demonstrate their products and services may pitch in to help cover out of pocket costs.

It must be made clear to clients that this is a one-time event and they should not expect future freebies. Clients should also be given a full report on the real cost of each prototype. The producing organization needs to treat prototypes as real projects with deadlines and quality controls, not something to be done when and if the spirit moves. 

Snapshots in Outsourcing 

In December 1998 NCR Corporation, headquartered in Dayton, Ohio, solicited outsourcing bids from several large production companies for multi-media and electronic meeting management functions. NCR was spun off from AT&T in 1997 during the "trivestiture". The RFPs were developed and administered by the NCR purhasing department. The in-house media department was encouraged to submit proposals. The contract was awarded to Curtis, Inc., of Cincinnati, whose outsourcing contract with GE's Aircraft Engine division was recently renewed for a five year term.

Curtis now operates a satellite shop on site at NCR, but will relinquish the space at some future date. They also offered full-time employment to the NCR production staff. This was a very fast track project, with potential vendors being given less than six weeks to submit an initial response.

Carabiner International has been on an acquisition binge ever since going public three years ago. One area of concentration for their expansion has been the a/v equipment rental business, which includes providing a/v services for hotels. Now they have announced a Corporate Services Division, targeting the a/v equipment pool management and meeting room support requirements for Fortune 500 companies.

This division, controlling 500 equipment pool inventory centers, is based in Atlanta. Carabiner also provides media production management outsourcing and has a division that develops corporate training programs. The recently acquired Spectrum Data integration business was yet another component of Carabiner's remarkable business strategy "to provide complete business communication services." 

Management Tactics 

Ken Mundt, Video Communications Manager at Flow International in Kent, Washington, passed on his response to Karen Rogers' challenge of "inviting yourself to the party."

Flow International is a medium sized company ($160 million in annual revenues) so they don't have distance communications technology in-house. They do, however, make frequent use of the Kinko/Sprint videoconferencing network to confer with their six worldwide subsidiaries. Ken says organizing videoconferences is a simple process, once the initial arrangements have been established. An administrative assistant could certainly handle ongoing coordination. However, he chooses to stay directly involved with each conference, from making the reservations to being on hand during the meeting to make sure all goes well.

Why? Well, the attendees are his CEO, COO, CFO and a lot of other officers with "C" type titles. For a minimal amount of effort, Ken gets the skinny on operational and financial information about the company as well as high level visibility among top management. His presence enhances his importance. And, he gets information which not only helps him communicate credibly with management, it also gives him information helpful in better managing his own organization and as he says: "craft on-the-money messages in our marketing, investor and internal communications media."

 


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