Benchmarking for publishers: respecting the special nature of media

Hamburg/Munich, March 1, 2013. Benchmarking and process optimization are important challenges for publishers and media consultants in times of structural change. Productivity gains in the range of 10 to 20% are possible if media industry benchmarks are reached. An interview with Rolf-Dieter Lafrenz, partner at Schickler consulting, who has advised more than 200 publishers and other clients in the media industry.

Benchmarking seems to be a hot topic on the agenda of publishers. How do you explain the rise of importance of benchmarking in the publishing industry?
Many publishers see shrinking profit margins due to structural changes in the advertising and reader markets. There is high pressure on the core business to deliver the cash flow needed for digital business models. The productivity of publishing processes and cost saving potentials are in the focus now.

Why would you need to be a specialised media consultant to perform a benchmarking analysis for a publishing house?
We believe that the special nature of the media industry asks for a specific approach. On the one hand, newspapers and magazines are emotional, creative products. On the other hand, the processes behind should be optimized for perfection. A merely engineer-driven approach cannot work in a publishing house.

What are the crucial success factors for a benchmarking project in an editorial environment?
First of all, you need to find the appropriate KPIs (Key Performance Indicators). We prefer cost-volume ratios to cost-sales ratios in order to eliminate the influence of different price levels and market conditions. Over the last ten years, we have structured the entire value chain of a publisher into KPIs. As all processes are linked, an overall view is very important. Secondly: Exact definitions of the KPIs are crucial. You cannot compare the editorial departments of two newspapers without taking into account their special structures, workflows, channels, products and qualities. Thirdly: The cost accounting differs from publisher to publisher. Take, for example, the allocation of IT costs. We know publishers who charge IT costs to every cost centre. Other publishers allocate these costs to a central IT cost center. When you compare cost centers of different publishers and identify possibilities for cost saving, you must know these differences.

Is it possible to transfer benchmarks from other industries to publishing houses?
We recommend to limit such transfers to very few areas of a publishing house, such as benchmarks for HR and the finance department. When it comes to the core business, the level of acceptance of benchmarks from outside the media industry is very low. And this is a bad start if you want to use the benchmarking as a start for a change program.

Quality matters in the publishing industry. How do you take into account different quality levels?
We use a different set of benchmarks. There are remarkable differences between large national quality titles, regional and boulevard newspapers. In these categories, we identify the ratio of news agency content and proprietary content. Based on this information, we can categorize the quality level. Further criteria will be applied according to the respective competition and regional situation.

What is the difference between quantitative and qualitative benchmarking?
The quantitative benchmarking aims at identifying the areas where process optimization and cost saving are possible. For this purpose, key performance indicators are calculated and compared to media industry benchmarks. As a result, the publisher receives an estimate of the cost saving potential.
The qualitative benchmarking puts the process quality into focus. The workflows of a publisher are contrasted with “best of media industry” processes. Differences are identified and improved in joint project teams. This way the publisher can achieve a level of productivity at industry standard.

What results can be expected from a benchmarking project?
We have conducted more than one hundred benchmarking projects. In all of these projects we found different situations. None of the publishers we know is excellent in all disciplines. And very few are far below all the benchmarks. Chances are very good that a publisher will find valuable levers for optimization. Usually the “quick win” saving potentials are so high that a project pays off even before the management presentation. On average, our projects show cost saving potentials of 10 to 20 per cent.

The SCHICKLER group - corporate consulting and executive search - was founded by hands-on practitioners 30 years ago. Its focus on a limited number of industries (Media, E-Business, IT/TC-Services, Insurance) enables its consultants to achieve a high degree of specialisation. As a result, Schickler offers its clients in Germany and Europe strategic foresight and solutions in line with actual practice. Offices are located in Hamburg and Munich.

SCHICKLER Unternehmensberatung GmbH
Julia Schormann
Gross Baeckerstr. 10
20095 Hamburg
Germany
+49 40 3766500
beratung@schickler.de

This release was published on openPR.