Insights from Hisham Shehabi
Behind every decision made during an entity’s digital transformation, the rights holder should be asking itself the same simple question: how does it benefit the organization’s entire ecosystem? At a surface level, this might include the role of direct-to-consumer (D2C) media for monetizing new fan experiences, or how the simplification of data governance can improve operational efficacy and, therefore, help to cut unnecessary costs.
As a consumer product, the sports business relies on its customer relationship management (CRM) to build and retain audience loyalty. Meanwhile, the fan journey tells a story behind every dollar the customer spends via your ecosystem, underpinned by a centralized data warehouse that helps the rights holder to analyze fan behavior and personalize content across every one of the entity’s digital touchpoints.
In recent weeks, we’ve discussed the role of digital consolidation for boosting fan-data collection, a subject that was also covered in our 2023 Digital Trends in the Sports Industry report. Change management is cited among the notable challenges faced by sports executives, while data simplification is highlighted as the first, vital step for sports properties to take before they are able to scale their digital product inventories, without creating data silos which disrupt the employee experience (EX).
For many rights holders exploring their own digital transformations, human resources (HR) and financial governance are notable beneficiaries of a centralized ecosystem, with several clubs and tournament organizers adopting an enterprise resource planning (ERP) partner to oversee the management of: (1) advertising and subscriber revenues; (2) product orders; as well as (3) operational costs; and (4) payroll, all via a single system.
According to industry research, the vast majority (95 percent) of businesses achieve major reductions in process times and increased collaboration via ERP adoption, which is also said to reduce operational and administrative costs by up to 23 percent and 22 percent, respectively. Notably, employees within finance and IT departments are most likely to purchase ERP software (23 percent), while Learn 2G findings also show that 89 percent of companies identify accounting as ‘the most critical ERP function’, followed by inventory and distribution (67 percent), CRM sales (33 percent), and technology integration (21 percent).
FINANCIAL ERP A BENEFIT TO MULTI-VENUE & MULTI-STAKEHOLDER COMPETITIONS
While attractive to individual entities seeking to optimize cost efficiency and maximize income, financial data governance also proves to be a prudent investment for larger, multi-stakeholder leagues or competitions. For example, the France 2023 Rugby World Cup organizing body has partnered with Sage, the accounting, financial, HR, and payroll technology specialist, which has been charged with the financial management of the whole event, including, for example, the purchase and resale of France 2023 tickets.
Elsewhere, Formula One (F1) struck a multi-year partnership with Workday, which sees the cloud solutions company act as the motor racing series’ regional finance and HR partner in Europe, the Middle East, and Africa (EMEA). Workday’s Human Capital Management (HCM) system was integrated into the F1 ecosystem as part of the arrangement, to support on internal business processes. “Our partnership with F1 underscores the importance of speed in decision-making, not only in the racing world, but in business,” says Christine Cefalo, Workday’s Chief Marketing Officer (CMO).
Centralized accounting also holds benefits for tournament organizers who run events from multiple stadia and locations. For example, the St. Andrews Links Trust adopts Oracle NetSuite as the professional golf course operator’s dedicated cloud-solutions partner and oversees the ‘financial visibility’ of the body’s seven venues. The decision was made after the Trust concluded that its finance team was working with outdated systems that made manual data-management processes complex and time-consuming.
“We needed to step up to a more modern platform,” explains Paul Cree, Head of Finance at St. Andrews Links Trust. “We knew we wanted a cloud-based option and that transforming our purchase-to-pay cycle was a priority. Simply upgrading our existing system was neither the simplest nor the most financially viable option, so we kept our options open and carried out due diligence.
“Having the chart of account structure set up with our departments and sites means we are able to dissect our data in ways that are meaningful to us, building the reports we need centrally, but also allowing departments and sites to access their information and only their information.”
WHAT’S N3XT?
In order to increase brand value, a sports organization must first understand how its departments communicate customer and operational data to inform their commercial decisions and financial reporting. This includes whether its digital infrastructure is set up in a way that helps the organization to meet its broader operational and commercial goals.
A digital audit will be easier to complete for tight-knit, individual properties made up of a small team. However, for the more complex sports organizations whose clubs, teams, or competitions exist under one umbrella, keeping track of the ecosystem’s entire financial performance can prove painstaking without putting the appropriate processes and software solutions in place first.
Furthermore, in cases where competing stakeholders are siloed or left to their own devices, the wider stakeholder ecosystem is unable to maximize its collective commercial appeal compared to those that centralize their financial governance.
For example, N3XT Sports helped the Belgian Pro League develop a business strategy that prioritized financial sustainability within the clubs. To do this, the strategy focused on generating a centralized club servicing program that helped clubs adopt revenue-generating tools and learn how to roll them out. Additionally, the strategy prioritized new revenue generating opportunities that could be monetized at scale with several clubs, instead of individually, such as signage across the teams' pitches.
“By building a connected ecosystem that promotes the financial stability of one or more sports entities, data harmonization helps rights holders meet common goals without diminishing their independent objectives or those of their competitors,” explains Hisham Shehabi, N3XT Sports Chief Operating Officer (COO). “This highlights an opportunity for sports bodies made up of multiple member stakeholders to make collaborative commercial decisions based on the mutual benefits of their entire ecosystem, sustaining both the financial stability and integrity of the wider supply chain and the stakeholder’s right to develop and augment its own D2C and commercial strategies.”
Our team at N3XT Sports works tirelessly to develop and implement digital and business strategies across a multitude of sports properties at federation level, competition level, and club level. To learn more about how digital transformation can support the financial stability of your organization, fill out the form below and we’ll be in touch. Our goal is to drive the digitalization of the sports industry and our clients.