Setting the Stage
For blockbuster success HBO casts Oracle E-Business Suite in a leading role.
by Molly Rose Teuke, February 2010
It’s tough to mount a coherent stage production when the script keeps getting rewritten. In the case of the media and entertainment industry, the script isn’t the only thing that’s changing. Platforms such as network television and multiplex cinemas now coexist in a marketplace with constantly evolving technologies—and where shifting audience demographics and rapidly emerging competitors are creating unprecedented drama.
Home Box Office (HBO), a subsidiary of Time Warner, offers original programming content to upwards of 40 million subscribers in the U.S. via its HBO and Cinemax premium networks. Every year, HBO executives collect armloads of Emmy Awards, handed out by the Academy of Television Arts & Sciences. In 2009, they took 21 of the coveted awards, 30 percent more than any other network. Among HBO’s many acclaimed offerings are The Sopranos, Entourage, True Blood, and Curb Your Enthusiasm.
“HBO has a reputation for producing great content, telling great stories, and investing in great production,” says Adrian Drury, principal analyst with the London, England-based media consulting firm Ovum. “You only have to look at the roster of its successes to see how good it’s been at that, and over quite a sustained period.”
But programming excellence isn’t the only ingredient for success in today’s dramatically evolving marketplace. The shift from analog to digital technology has wrought previously unimagined change to the process of distributing content, resulting in seemingly endless opportunities and an explosion of competition. Riding the tidal waves of technological breakthroughs and heightened consumer expectations is the new business imperative of the media and entertainment industry.
Staying flexible and adaptable is critical in such an environment—and maximizing the quality and flow of information throughout the organization is essential.
Recognizing the changing nature of the media business, HBO executives initiated a financial systems analysis project. Among the project’s objectives was a proactive review of HBO’s core financial systems and financial information needs. The result: a recommendation to replace HBO’s core financial systems with the power, scalability, and flexibility of Oracle E-Business Suite 12. HBO leaders recognized the advantages associated with an integrated financial suite combined with the power of project accounting.
Implementing the System
An outdated chart of accounts was one of the first areas to overhaul. “The chart of accounts is one of the greatest limitations of a typical general ledger system, because you can only capture information in a defined set of buckets,” says Marie Mahony, vice president of financial operations and reporting at HBO. “If you change the way you look at the business and no longer want to consider, say, these five things as your way of rolling information up, you have to reimplement your entire system or else you start misusing different segments within that chart of accounts.”
HBO’s diverse programming and distribution channels, combined with the changes taking place in digital distribution, made choosing those “buckets” especially problematic. Where best to capture information—at the episode, season, or series level? Who would own the data—video or international enterprises, programming, or some other unit?
Oracle E-Business Suite’s project accounting capabilities enable HBO to capture data at a very detailed level and analyze it from multiple angles. “Because our original programming is so popular, there’s a lot of interest in understanding just how well our titles are doing in various distribution channels,” says Greg Fittinghoff, senior vice president of application development at HBO. “We have a much deeper and richer level of information in Oracle E-Business Suite than we ever had in our legacy systems.”
On another front, Oracle Subledger Accounting simultaneously copies one business event to both a thin corporate ledger and a thick project management reporting ledger—providing levels of detail that are appropriate for different job roles. “We knew there was a big gap between what our general ledger would give us and what management needed to better analyze the financial performance of the business,” says Mahony. “What the subledgers give us is the flexibility to capture detail at a level more appropriate for evaluating the business.”
HBO also learned that an integrated system gives business areas more-direct access to information. “This means less reliance on static reports built by IT and more emphasis on dynamic real-time queries and analysis using standard Oracle E-Business Suite tools as well as a third-party reporting tool, GL Wand,” says Mahony.