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Feb 10

Written by: Craig Norris
2/10/2009 6:56 AM  RssIcon


Craig Norris is technical editor of TV Technology Europe and TV Technology Asia/Pacific.

Most of us are feeling the pinch this year. The economic crash has halted or slowed spending for a lot of companies and individuals. We have to justify every dollar spent and we really must ask ourselves whether any potential purchase is a worthwhile investment or not.

And so it is that we now find ourselves in a curious position whereby as engineers we are not so much challenged by engineering problems as much as we are by questions of an economic nature. Until now, a lot of engineering decisions in this Asia-Pacific part of the world have been based on 'what we know is right'.

We expect that the benefits of a new product, system or technology will be obvious; and sure enough, marketing power being what it is, even the accountants have been relatively submissive and have easily bought into an engineering recommendation for the purchase of a new technology base for the TV station.

But time marches on, and constant change is inevitable. It's time to close that AutoCAD window and open the Excel window instead. In my consulting work over the past twelve months, I've spent far more time creating, reading and editing Excel spreadsheets than I have doing similar things with Visio or AutoCAD diagrams.

An approved capital expenditure annual budget is no longer a ticket to free spending of that money. In some broadcast enterprises, every purchase throughout the year is likely to be scrutinized by the financial controller. The acid test is the obvious question about the payback period for any new technology investment.

One key question is: 'If we don't buy this, will we go off the air?' The correct answer is 'Yes'.

The other key question is: 'How long will it take for this thing to pay for itself?' The correct answer is 'One year or less'.

The challenge is to present a convincing argument in support of the 'correct answers' mentioned above. The embarrassing truth is that in a lot of cases, the station won't go off the air without the purchase in question, and the payback period is often just too long. In fact, with the IT-based hardware platforms under consideration today, the payback period is sometimes longer than the life of the IT platform itself.

As painful as it may seem, sometimes it makes better economic sense just to keep doing what you're doing, than to change anything. ] A case in point, and the main case in point for several projects I've worked on recently, is the use of videotape. The dream for a 'tapeless' broadcast environment is still alive and well, but the reality of a truly tapeless broadcast environment is still far from ubiquitous.

It's a telling fact that one can still find linear edit suites in regular use in many TV stations. When the user is questioned about it, the answer is that for some types of work, the linear edit suite is still faster and more reliable than a non-linear editing workstation. So be it. After ten years or more, surely the linear edit suite has paid for itself many times over, and is now completely written off on the books ( a 'sunk' cost, as the accountants say ) and is therefore a very cheap way to keep the video production lines running. The payback period for the non-linear replacement of an existing sunk cost linear edit suite might not be fast enough to justify the change. As our Americans friends say: 'If it ain't broke, don't fix it'.

A greenfield site is another matter. If we have to build a new TV station from scratch, we surely won't be building any new linear edit suites. There just won't be any argument about that. But the arguments about whether to replace an existing linear edit suite still rage on.

The vendor perspective

It isn't just the broadcaster going through this belt-tightening. The vendors are struggling with it too. How much time and resources should one devote in the effort to win an order? How efficient is the sales process?

Some sales managers now prefer to ignore the difficult types of business, like system integration projects, because they think it's a more effective use of time if one concentrates on so-called 'box business'. The sales cycle for a system project might be two years or more. That means two years of time and resources with no direct income in return.

I've seen some vendors invest half a million to a million dollars in resources over a two or three year period in the effort to win a major end-to-end system project. In the meantime, while that big game fishing goes on, something else had better be bringing money through the door in order to pay the rent and salaries and all the vendor's other business overheads.

So what can we do to avoid the potential quagmire where customers can't afford to buy anything and vendors can't fund the selling activity? The key is to target a pressure point.

The customers and vendors must work together in a focused manner to target one particular problem and work out how to solve it as cheaply and quickly as possible. Focus on bringing off a 'quick win' where a visible improvement in the operation is obvious to all, the product is loved and praised by the end users, and the accountants are happy. Anything else is a waste of time and money.

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