Coming Into Focus
Cox Communications profits by paying the right price for programming.
How does Cox Communications, a multibillion-dollar communications company serving more than six million residential customers and hundreds of thousands of commercial accounts, continue to thrive and grow in an increasingly complex market? The firm must accurately evaluate programming costs and leverage that information to build the most compelling and effective collections of cable services. This complicated task is now much easier thanks to the completion of Cox' two-year Cornerstone project to implement new Oracle E-Business Suite applications to replace the company's highly customized core business applications.
Cox Communications Vice President and Chief Accounting Officer Bill Fitzsimmons is particularly pleased with how his company is utilizing Oracle Incentive Compensation, part of Oracle E-Business Suite, to reconcile subscribers per channel against content provider contracts. Managing programming profitability is critical because programming content is Cox' single largest expense.
With the Oracle Incentive Compensation-based costs solution, the firm has a better understanding and control over what is owed to content providers and what channel listings are selling best, as well as a better understanding of its profitability for individual content providers. In addition, the solution provides faster reconciliation and auditable reports for its providers.
For most people, cable TV is a simple proposition: You turn on the TV, and there it is. But it's not that simple to Bill Fitzsimmons, vice president and chief accounting officer of Atlanta, Georgia-based Cox Communications, a multibillion-dollar company serving more than 6 million residential customers and hundreds of thousands of commercial accounts. "Delivering channels like CNN, HBO, and ESPN may seem easy to the consumer, but we have a complex programming model and a lot of moving parts to take into consideration to run the financial side of our business," says Fitzsimmons. "Our goal is to efficiently manage the increasing complexity and make proactive and profitable business decisions."
Last year, Cox completed the two-year Cornerstone project, replacing its aging and customized core business applications with Oracle E-Business Suite applications. The vision was to use the financial applications to create a consistent source of information and enable business-driven reporting and planning that could lead to a dashboard view of the business—everything from back-end accounting numbers to service and subscriber details.
Managing programming profitability is an important component of that strategy, because programming content is Cox' single largest expense. A critical part of Cox' future success relies on how well it can evaluate programming costs and leverage that information to build the most-compelling collections of services. Cox needs to track how many customers are subscribing to different channels and reconcile that number each month against contracts with the providers in order to pay the appropriate amount and calculate product margins. Oracle and Cox partnered to solve a sophisticated industry challenge—reconciling subscribers per channel against content provider contracts. Such a solution is typically outside the norm of standard applications, but Cox was able to accomplish this using Oracle Incentive Compensation, part of Oracle E-Business Suite, in an unusual and creative way.