According to a survey done by McKinsey in 2018, 92 percent of company leaders thought that their business model would not remain viable at the rates of digitization at that time. The global pandemic has accelerated the need for many industries, and more specifically the sports industry, to start their digital transformation process. We have realized that those sports organizations that are taking the lead on digitization are the ones gaining a competitive advantage.
Throughout this article, we will cover all the topics related to digital transformation.
We will start with how digital has emerged as a competitive advantage, then define what digital transformation is, and why it is important to start now. Then we will discuss the importance of a digital strategy and the common pitfalls to keep in mind to ensure digital is a success for your organization. Then, we share some excellent business results from sports organizations implementing digital projects.
Finally, we would like to invite you to use our proprietary Digital Assessment Tool to assess the digital maturity of your sports organization. Start the journey!
2020 ACCELERATED THE TREND OF DIGITAL AS A NEW COMPETITIVE ADVANTAGE
Even before the COVID situation, we, as a company, started spotting a new trend — the trend of digital as a new competitive business advantage. And what we can confirm today is that this trend has been accelerated due to the global pandemic.
As Keishi Matsuyama, Strategy Director at Valencia CF, shared last year during our Football Innovation: The Power of Digital Transformation online meetup, the COVID-19 situation has accelerated digital transformation for many companies, especially in the sports industry. It has tested the ability to produce content and entertainment, extend the brand’s presence, and keep connected to fans.
During the lockdown, when there were no live sporting events, many leaders at sports organizations took this “downtime” to allow new ideas, previously on the back-burner due to time constraints, to be further developed. Digital emerged as a valid investment proposition even in a period of austerity because it cushioned the organization’s ability to service its commercial partners, develop content and deliver value to its fans. Progressive organizations that invested in their digital foundations are emerging (and will emerge) from the crisis with a competitive advantage, which will pay dividends in the post-COVID era.
Now is the right time to prioritize digital transformation within sports organizations.
DIGITAL TRANSFORMATION, WHAT IS IT?
Motasem El Bawab, Head of Digital at the International Volleyball Federation FIVB, during one of our online meetups highlighted that there is always a misconception about the topic of digital transformation. Whereas many key actors in sports organizations tend to think about it as buying new technology, it actually entails looking at the current operations and every department to determine how digital processes can improve efficiencies and create new value.
By prioritizing the data dialogue and devising digital & innovation strategies, sports organizations will be able to answer questions such as: How can I pool my assets to create an attractive category for a tech sponsor? How do I know who my fan is? What new digital-driven revenue streams can I build? What rights do I give away and which do I control?
Understanding who clients and customers are, in general, allows an organization to provide a better service. The only way to know who fans are, how they consume content, and what their experience is like on all digital and physical touchpoints is by collecting and analyzing data. With the proper digital and data architecture in place and with the right implementation, all of this is possible.
Digital transformation is the package of tools, processes, and people that drive business value through digital, whether it is on the pitch or off it.
WHY INVEST IN DIGITAL TRANSFORMATION NOW?
Even before the arrival of COVID, the sports industry’s operational & business model had a significant digital gap. In 2019 alone, the global sports industry left $16.7 billion on the table because of its lack of digital sponsorship exploitation. Finding out what fans want today can be done through behavioural, socio-demographic and social engagement. Even so, periodic market research reports with limited respondents (although statistically representative of the population) are one of the main ways sports organizations define their fan approach.
The global pandemic has laid bare the structural weakness of many of those sports entities that thought that digital transformation was not a necessary enabler of success but a “nice to have” element of their work. The race for digital and innovation supremacy has already begun.
There are plenty of sports organizations that have come to the fore.
One specific initiative in 2020 was the Reimagine football challenge, which crowdsourced groundbreaking tech- and non-tech solutions on behalf of football entities in Europe. The goal was to uncover new digital technologies that can help fans connect with the game, especially without being able to be at the stadium.
Another great example is the San Francisco 49ers’ bet on mobile which helped increase overall app pageviews by 39% year-over-year and live game video starts are up 338% year-over-year. In consequence, they have increased their digital inventory and provided new ways to engage fans and commercial partners.
Did you know…?
According to a 2020 PwC survey of global sports leaders, 78.4% of Sports organizations will increase funding and efforts to accelerate digital transformation.
The justification on why to begin the journey of digital transformation can, and should, vary; from adapting your business model to servicing sponsors differently, to engaging Gen Z fans, to modernizing the workforce. The current environment, while extremely difficult, has given the clearest indication yet that sports organizations cannot delay their digital transformation.
Whether you’re a radical transformer or an incrementalist, the goal is to become a “digitally savvy” company now. It is a matter of survival.
ANCHORING DIGITAL IN STRATEGY
Like any transformational process, developing a digital strategy is key to success. A strategy should properly assess the current environment, looking at existing tools, data flows, commercial deals, governance structures and the tech stack on the business and sports sides.
Next, a strategy must be followed immediately by a development roadmap that is aligned with your commercial cycles and puts clear milestones, outlines the costs, defines the metrics, clarifies decision making, and develops the business case.
A digital strategy must be aligned with the overall corporate strategy of your organization. If you lack an overarching strategy, it is likely your digital efforts will at best deliver lackluster results or at worst, fail and end up in a very expensive process.
In many instances, sports organizations have commercial partners with long-term contracts in place. A proper strategy ensures their involvement at every step of the digital transformation journey. The strategy is a living-breathing set of documents, processes and reporting milestones that need to be constantly communicated to the team, leadership and partners.
In short, a digital strategy must:
- Align with the corporate strategy
- Pay attention to existing procurement policies, legal agreements & architecture
- Respect commercial partners
- Define clear KPIs and periodic milestones
- Clarify the total CAPEX & OPEX of operationalization
- Have governance structures to make decisions
- Be agile, adaptable and data-centric
- Involve the workforce, leadership and members
Digital is an enabler of your business strategy, so it must align with it.
MOST COMMON PITFALLS
The challenge for sports organizations when designing and implementing digital solutions tends to be the lack of expertise in the topic. Traditionally, sports entities do not have the appropriate infrastructure, processes, tools, and knowledge to take the most effective steps towards digitalization. There is an inherent aversion to investing effort and resources into building a digital strategy despite the endless industry examples that demonstrate the significant benefits that can be achieved, which far outweigh the initial costs.
The added complexity from digital transformation in the sports industry comes from the way IT departments are seen as a service provider to business units instead of a core business driver. While digital is not one department’s responsibility, it is important that digital has a governance structure in place.
There is a lot of “noise” in the market around solutions that will help, and defining the right steps to take is a task that many organizations do without. They quickly integrate solutions into their infrastructure without a specific roadmap. Instead of reacting to the market, organizations must become proactive and seek the right solutions, partners and expertise.
To avoid these pitfalls, there are few important things one should take into account when starting a true digital transformation.
- Digital cannot remain a buzzword in the organization. From the board to the executive team, to the workforce, digitech literacy must be quickly accelerated. This means investing time, effort & resources to understanding what digital means, how it works, what business models exist, and how it has worked (and failed) in and outside of the sports industry
- Data is the new oil. Don’t give it away so easily. It is important for sports organizations to guard their data empires, and ensure that signing away their data is only done for the right purposes.
- Digital is not a quick fix. Transformation of the culture, processes, tools and people within an organization takes time, usually multiple years. It is important not to judge digital on a 12- or 18-month horizon, but rather in function of your next commercial cycles.
- Digital is not one department’s job. It is a collective responsibility of all stakeholders driving the business objectives of the organization. Even if IT or Marketing lead the process, it is important to involve everyone along the way.
- Digital requires expertise and strategic oversight. If embarking on your organization’s first true transformational project, you should do it with the right partners, including experts, specialists, commercial partners, the performance or development side of the sport. You must also have strategic oversight on the process, so the project does not drag its feet and balloon the costs.
WHAT ARE THE RESULTS?
Some of the tangible results that our clients benefit from in their digital transformation journey happen quite quickly, whilst others take time. For example, a new way for taking decisions on digital asset development, content strategy and fan acquisition are centralized through clear & transparent governance structures. New tools are used by the workforce that increases data-driven decision making with clear dashboards, reporting and state-of-the-art communication & sharing tools. The commercial team is able to increase its digitech vocabulary with partners, drive activations in digital, and develop improved digital asset inventories.
The industry is clearly prioritizing its digital transformation. Check out the direct impacts of this across sports organizations in several regions.
- AS Roma: 300% growth on social media thanks to content strategy & navigation improvements on digital.
- Fulham FC: £160k saving over 3 years by expanding its IT capacity & bandwidth, reducing inefficiencies
- Hertha BSC: The whole ticketing journey takes less than 2 minutes, increasing its popularity with Gen Z.
- Wimbledon: Increase of 98% in mobile visits, 25% in video views, due to new apps being launched.
- Inter Milan: Increase of 21.5% in season ticket sales & 10.8% in sponsorship thanks to a new CRM.
- San Francisco 49ers: Live game video streams through the app increased 338% year over year.
- Real Betis football flub: 50% increase in stadium attendance thanks to a new app introduced.
- Real Sociedad football club: After its transformation, 70% of fans access its website through mobile devices.
- Everton FC: £1.6 million is the value of the email conversions through campaigns launched by CRM.
- International Volleyball Federation FIVB: 500K+ new Facebook followers (equates to 25%+ overall follower growth for the page), 24M+ 1+ minute Facebook video view (85%+ increase vs. previous four-month period), 60%+ increase in revenue earned via In-Stream Ads vs. previous four-month period after a digital strategy was put in place.
ARE YOU READY FOR YOUR JOURNEY? TRY THE DIGITAL ASSESSMENT TOOL
Sometimes, it is difficult to start a project because it’s not clear where the starting point is. This is not one of those times. In 2020, we distilled the wisdom of our digital team into a clear framework of digital maturity, and then we developed an easy-to-use tool that is freely available to you.
Please jump into the Digital Assessment Tool to get a free assessment of your organization’s digital maturity.
We are continuously having conversations with decision-makers of sports organizations about the importance of digital transformation and the results they could obtain from it. We can support your organization through a digital transformation process from A to Z — from Assessment, roadmap, implementation and monetiZation.
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