VRT will always remember the crisis it hit in 1995. This long-established public broadcaster came up against the full force of new competition from the private sector. As a result, its market share plummeted and the company lost a lot of its standing in the process too. At the same time, a lively political and public debate began in Belgium about the future viability of a publicly financed broadcasting company. The situation was eventually brought to an end when the parliament passed a decree securing the future of VRT and imposing certain conditions on the company.
The broadcaster, headquartered in Brussels, was charged with producing and broadcasting radio and TV programs for the Flemish-speaking community. It was given the task of promoting the region’s cultural unity and this remit means that it continues to receive a basic level of funding from the state budget. In return, specific agreements commit the management to corporate objectives, in particular adhering to a strict financial and cost policy. Things looked good for VRT at the end of 1997. It had what it needed to tackle the future with a whole new image and newly developed program concepts.
No joint communication platform
It was at this time that Harry Sorgeloos, current director of strategy, technology and innovation at VRT, began working for the company in Brussels. “The first thing we had to do was to gear the broadcasting company to the market,” he says, looking back. The problems facing VRT were typical of those that make life difficult for the management of any broadcasting company. “What was really lacking was a communication platform for sharing specialist knowledge between the programmers on one side and business managers and finance departments on the other.” The company’s management team was lacking an effective tool for making strategic decisions, let alone for helping them make well-directed and well-founded savings. Controllers and management had to content themselves with a state of affairs that critics branded “tunnel vision”. The management had remained too long without any direction and only found out at the end of the financial year whether the budget framework had been adhered to, by which time it was too late anyway.
There was also a lack of detailed knowledge about the work processes in production and programming. Sorgeloos set about recording this information and shadowed the program-makers for weeks on end. “I followed them on their reporting assignments and sports broadcasts, visited the studio during production and tried to analyze the business processes.” There was a great deal of opposition to this, with many believing that a broadcasting company could not be compared to a normal industrial company. Despite all this, the management team at VRT decided to introduce an ERP solution and turned to SAP to provide it. Through the cooperation, a concept for the company’s business processes (a business blueprint) was developed to define and map master data, organizational units, business scenarios and business/process steps.
An innovative performance
“We focused first and foremost on general services such as finance and HR. Next came the radio programming, though it took a bit longer for the television,” recalls Sorgeloos. VRT became one of the first radio and television broadcasters to comprehensively document business management processes. Now all business applications – from initial program planning, the subsequent stages of production and broadcasting the programs right through to archiving and rights management – are mapped into an integrated whole. And planning and controlling are combined in a single solution.
At the heart of the ERP solution is SAP production planning standard functionality for sales and operations planning (SOP for short). SOP provides the joint planning and operational level for the management departments as well as for the creative and broadcasting departments. Managers and program-makers alike use this tool. The effects of planning and production processes on costs are now transparent thanks to SOP, which links them to budget plans, income and current spending. What’s more, the programming capacity and resources can now be analyzed in depth and improved.
SOP enables an end-to-end flow of documentation – beginning from the requirements forecast for program planning and extending through program making using in-house production, acquired programs or repeats of stock programs to program settlement.
A programming and controlling tool
SAP production planning and SAP materials management can be called up using a standard process (“make to order”) to aid the editorial team’s program order and perform concrete resource and cost planning for individual productions. External resources can be purchased and the work actually performed can be fed back to the original program order. Program inventory management also enables VRT to depreciate program assets – even in relation to the number of broadcasts of a particular production. Controlling performs fast evaluations of planned and actual results for each editorial office, genre and other characteristics, and projects cost development for the rest of the programming year.
Monthly reporting means VRT can now keep an eye on planned costs and actual program costs for each of its six radio and three TV channels as well as for its innovative projects involving digital program offerings. Program purchasing and production staff can now ensure at all times that they are within budgetary requirements. Such continuous tracking of costs and work performed is absolutely indispensable for modern broadcasters.
From problem case to market leader
Harry Sorgeloos says the company’s success is tangible. The integrated solution for complete added-value in all areas of the Flemish radio and television company now means that planning takes half the time it did before the ERP tool was introduced. Significant savings in operating costs have been achieved by standardizing processes that had grown up organically in the various departments. VRT has even been able to further increase its program volume. CIO Harry Sorgeloos says: “With a market share of over 40 percent in television and 85 percent for our radio networks, we’re once again the market leader in Flanders.”
But the benefits of the SAP solution go way beyond just improving cost transparency, planning quality, and resource and cost management. The SAP solution at VRT provides the radio and TV company with a scalable foundation for the entire added-value chain. All future business processes, particularly those arising from the new digital media services, can be developed on this future-safe basis. And that’s not all – SAP NetWeaver is now on the agenda for 2004 at VRT. This technology enables business content to be integrated cost-effectively with the latest technological applications. It is therefore vital for the current strategy to expand the VRT offerings on the Flemish media market and fits in well with the motto: “Enable multichannel capability without multiplying exploitation costs.” And so the story continues…