The role of the CFO in media and entertainment (M&E) has traditionally been looked to for directing organizational spending and finding ways to reduce overhead.
However, as the recent pandemic accelerated M&E at incredible speeds from unseen in-home streaming service rates, CFOs in the industry have evolved into strategic decision-makers responsible for securing long-term financial growth.
Disruption Brings Opportunity, but Only if Leadership Can Balance Possibilities and Risks.
In a recent EY survey, 52% of M&E executives said the pandemic permanently changed how their businesses operate. In this new world, it is the responsibility of the C-suite to stabilize their organization and create buffers around their operating models that allow them to be nimble and agile when necessary. M&E CFOs can contribute to this mission by considering three key imperatives: simplifying the enterprise, digital differentiators, and business model innovation.
Simplifying the enterprise is top of mind for 41% of M&E executives. This short-term business priority can quickly capture wins in process efficiencies, lowered costs, and streamlined decision-making. For M&E CFOs, the focus on available capital can be intense as they must have the funds to invest in areas that drive competitive differentiation.
CFOs can assist with creating more cash and asset reallocation by closing gaps in their financial processes that can create cash flow bottlenecks such as slow account reconciliation and backlogs in accounts payable. Simplifying such processes and eliminating wasted spending generates an immediate cash boost and enables the reallocation of resources to strategic uses, like expanding investment capacity.
Digital differentiators are the foundation for scalability, which is why 60% of M&E executives are looking for ways to optimize menial tasks with outsourcing and digital tools. CFOs are navigating the complexity of back-office operations as they face rigorous compliance requirements and a need for digital skill sets. M&E executives are focused on strengthening vendor relationships and enhancing the contracting process, with the ultimate goal of increasing cash flow.
Process automation is a priority for 58% of executives who want to lower costs associated with low-value for essential functions, such as invoice auditing. M&E CFOs can stop wasted spending, reduce overhead, and capture immediate cash flow by integrating real-time automation into their accounting processes.
With the right AP automation software, M&E CFOs can benefit from end-to-end spend visibility and expense management to track their vendor’s billing performance and service quality. The organization can then prioritize payment for well-performing vendors and leverage financial insights to support contract negotiations.
Business model innovation is not optional for M&E enterprises, as nearly half of all executives surveyed believe that without innovation their companies will cease to exist in five years. The pandemic intensified changes in streaming services and targeted digital advertising. CFOs now must prepare for consumer demands to continue accelerating the digitization of their service offerings.
M&E CFOs can support CEOs and board members in developing visions for business model innovation through cash preservation and forecasting. The top priority for many M&E organizations is their digital audience and finding ways to alter their business models to support digital services. By providing actionable, data-driven recommendations, CFOs can rebuild revenue streams to enhance and repurpose current products and services. The finance function can drive value with predictive and real-time insights, like AP automation, for working capital management and spend planning to support innovation while also insulating cash flow during the change.
Take Action Now to Rise Above the Competition
The M&E sector is incredibly competitive. In order to win, organizations must create advantages that allow them to take new offerings to market quicker than the competition. Enabling speed and performance requires resources, and 61% of executives say that access to investment capital is the biggest hindrance to competing in their market. M&E CFOs can take the lead in creating operational excellence to secure the cash flow needed for these strategic initiatives. Expanding the digital capability of the finance function in media and entertainment will offer the business real-time insights needed to secure revenue streams and uncover growth opportunities.
Take your media & entertainment organization to the next level by scheduling a demo with an OpenEnvoy expert today, visit https://openenvoy.com/contact-us/.