Focus areas for leaders in the tech, media, and entertainment industries include upleveling their forecasting and planning capabilities, and using data-driven insights to gain a competitive advantage and meet consumer demand.
While the days of double-digit growth may be in the rearview mirror (for now) in tech, media, and entertainment, there are plenty of opportunities ahead for the industry to innovate and grow. Generative AI, in particular, promises to be especially transformative.
Savvy industry leaders will be those who double down on digital transformation efforts to drive data-driven insights, increase agility, and, ultimately, drive profitability. Here are four priorities that tech, media, and entertainment leaders should focus on in the year ahead.
Technology, media, and entertainment companies are at a digital transformation crossroads. In light of challenges such as ROI shortfalls and a growing skills gap, organizations need to focus on agility and innovation to supercharge profitability and growth.
Yet, many organizations are operating with a Frankenstein-like patchwork of systems—often the result of years’ worth of M&A and divestiture activities—that hinder swift decision-making and timely action. Without a single source of truth, leaders are left trying to plan and adapt for the future with stale and often inconsistent data.
In a recent IDC survey of tech and media leaders, 45% listed “managing fragmented systems across production, distribution, and monetization” as one of their biggest challenges. It’s a headache that Ben Askin, CIO at tax compliance software company Vertex Inc., knew all too well before transitioning to a cloud-based system.
“Our teams were extremely over-burdened and stressed from the fact that we had too many systems and too much data, which was highly unorganized and very siloed,” Askin said at Workday Rising in 2023. “We stepped back and said, ‘We’re not going to have this be as complex.’”
As a result of transforming and streamlining their digital operations, Askin and Vertex reaped immediate benefits.
“What we see in tech is that it doesn’t matter what role you have; it matters what you can do.”
Sarah Glover
Industry Solutions Marketing Lead for Technology and Media
Workday
Digital transformation is helping tech, media, and entertainment leaders improve a variety of operational areas, such as supply chain management. In a PwC survey, more than half of leaders say that tech investments have helped them “make faster decisions and effectively handle supply chain disruption.” Not only that, but 41% say these investments help make their supply chains more resilient—a top priority for future-proof organizations.
As competition surges and customer loyalty wanes, tech, media, and entertainment companies are reaching for a competitive advantage—and for many, that’s pricing.
Streamers, who have long relied on two pricing models—a basic ad-supported tier and a premium ad-free tier—are now stratifying their offerings to land on the ideal mix of customer expectation and price. Research suggests that a large swatch of customers—more than 40%, per a Deloitte survey—are willing to pay more for premium services that include bundled content, such as video games or live sports, ads included. And PwC reports that revenue from ad-supported video-on-demand will almost double in the next 5 years.
Software companies, meanwhile, are also tightening up their pricing strategies. A McKinsey survey found that 85% of surveyed software organizations plan to drive value through pricing adjustments over the next 2 years, primarily by increasing subscription or list pricing. However, there is a catch: many of these organizations note that they lack the “infrastructure to capture the long-term benefits of pricing and sustain its impact.”
Lack of visibility into the pricing function typically stems from an outmoded quote-to-cash (Q2C) system. By switching to an intelligent data core, organizations can utilize customization at scale, leveraging analytics to formulate pricing rather than calculating an ad hoc price based on old data. It’s a strategy that pays off, McKinsey research shows. Higher-growth companies are 1.7x more likely than lower-growth companies to integrate advanced analytics into their pricing.
Technology, media, and entertainment companies possess a gold mine of data. There’s just one problem: many lack the automated capabilities to fully maximize the potential of their data and their FP&A function with it. And 77% of leaders in the Workday AI IQ survey say they worry that their data isn’t timely or reliable enough to use with AI and machine learning (ML).
“AI-driven insights are so powerful because technology companies are sitting on the greatest amount of data out there,” says Justin Joseph, senior director of industry product strategy, at Workday. “They just haven’t been able to tap into it.”
The opportunities inherent with AI—coupled with human oversight and controls—can’t be overstated. That includes the ability to automate manual, time-consuming tasks such as quarterly reports or reconciliations, freeing up finance leaders to perform more high-value tasks, such as short- and long-term planning.
AI can also act as a powerful anomaly detector, stopping costly mistakes, or even fines, before they happen. At a time when tech, media, and entertainment companies are under pressure to do more with less, these cost control measures are invaluable.
Mark Zuckerberg dubbed 2023 “the year of efficiency” at Meta with cost-cutting measures to go along with it. Zuckerberg certainly wasn’t alone—last year, just about every major media, tech, and entertainment company scaled back on costs, including personnel, often due to over-hiring during the COVID-19 pandemic.
AI- and ML-driven insights are so powerful because technology companies are sitting on the greatest amount of data out there.
Justin Joseph
Senior Director of Industry Product Strategy
Workday
Layoffs have continued at major tech, media, and entertainment companies this year, but the industry is also feeling protective of its key talent. More than two-thirds of these leaders say talent acquisition can be a risk to the business, according to PwC, especially in key areas such as system architecture, cybersecurity, and AI.
In response, forward-looking organizations are taking a skills-based approach to their human capital management (HCM), making upskilling a top priority. Executives can tackle this challenge by leveraging a robust workforce management system, tracking workers’ skill sets (not just work experience or job titles) while also pushing personalized learning to employees who are keen for new opportunities or potential advancement. Organizations can also lean on workforce planning to map out looming skills gaps and solve for them, avoiding over-hiring in favor of finding new talent with the right skills.
“What we see in tech is that it doesn’t matter what role you have, it matters what you can do,” says Sarah Glover, industry solutions marketing lead for technology, media, and entertainment, Workday.
Tech industry CFOs must take a central role in technology transformation projects. Justin Joseph examines three critical areas where they can drive change through modernization.
Kieron Allen, analyst at Acceleration Economy, discusses the importance of data-driven insights and the role of tech leaders in extracting and implementing them, and the influence AI has on this critical business strategy.
Artificial intelligence and machine learning will be major differentiators in how effectively tech and media companies can compete. How can industry CFOs use these technologies for maximum benefit?
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