Competing on Digital Content: The New Frontier of Value Creation

Executive Summary
Accentures research and international client experience has shown that the ability to manage digital content is emerging as a core capability for company survival, competitive advantage and value creation1. Until now, most companies have been unable to effectively structure and organize information and fully exploit the value of their digital content. But no more.

Fueled by the rapid spread of high-speed connectivity and standards, information today is increasingly delivered in digital formats. Digital solutions combine traditional content (entertainment, product information, marketing collateral, process components and application software) with the personalized services that deliver what customers need, when they need it, to the devices and channels they specify. Rather than exchange money for a mass-produced product, these new digital solutions focus on complex exchanges of value for tailored services and products. The possibilities for creating and capturing significant value are enormous as are the challenges and new competencies that must be mastered. Such a shift demands much deeper insight on customer preferences and much greater exchanges of previously unstructured data on customer needs, available supply and business terms. At the same time, easy-to-copy digital content requires new protection for intellectual property rights.

Organizations of the 21st century now find themselves faced with several multi-billion dollar questions: What are consumers willing to pay for? How much will they spend? What does it take to keep them satisfied and loyal? What personalized services will they demand? It may take a lot of deliberation, experimentation and even failure to answer these questions but it already seems clear that the likely preference of mainstream consumers is digital services bundled into one personalized package, rather than received on a piecemeal basis from multiple providers. Make no mistake about it the world is going digital. Accenture research has shown that more content will be created over the next two years than over the entire history of mankind and 93 percent of it will be digital. Not only is every organization competing on content, but in this new world of digital bits and bytes, all organizations are becoming content companies. The real issue is how fast your organization can capture the new value that digital content solutions create.
1

The Accenture paper, Digital Content Solutions: Has Your Digital DNA Kept Up With the Content Evolution?, provides more information about Accentures innovative and pragmatic solutions. The paper can be found on accenture.com under Media & Entertainment/Solutions.

Competing on Digital Content: The New Frontier of Value Creation 1

Lets Get Digital

Digital enterprise is more than a buzz phrase and with good reason. Accenture analysis shows that a Global 3000 organization spends between 3 and 5 percent of its revenue managing and delivering corporate content a staggering sum approaching $1 trillion per year worldwide. But thats not the whole story.

These content flows affect the productivity of much larger portions of a companys cost base several times direct spend. Moreover, the effectiveness of this larger cost base is often the principal driver of a companys revenue. For example, the management of new product and research information greatly impacts the productivity and market effectiveness of expensive researchers, designers and salespeople. This is true in industries as diverse as music, publishing, investment banking and wireless data services. With customers, competitors, business partners and employees increasingly going digital, an organizations ability to manage content is emerging as a core capability for company survival and competitive advantage and a fresh new frontier for value creation. Indeed, Accenture analysis has shown that digital content management may be one of the single largest, hidden opportunities to create value in global enterprises. Yet few organizations consider it a mainstream internal process, know how much they invest in content, or actively manage the way content is routed through their businesses. For most companies, it is a major if missed opportunity to create greater shareholder value and capture competitive advantage. Just as companies of today have a Chief Financial Officer (CFO) or a Chief Technology Officer (CTO), the companies of tomorrow will need to have a Chief Content Officer (CCO). Take, for example, the Boeing 777. Boeing used digital computing technology to design and build the 777 the first airplane to be 100 percent digitally designed and pre-assembled on computers. In creating the 777,
2 Competing on Digital Content: The New Frontier of Value Creation

Boeing used fundamentally new approaches to designing and building an airplane2. Before it started using digital technology, Boeing distributed enough maintenance documents to create a stack of paper more than 24 miles high. The 777 program established design/build teams to develop each element of the airplanes systems and airframe. Under this approach, all of the different specialties involved in airplane development designers, manufacturing representatives, tooling, engineers, suppliers, customers and others worked jointly to create the airplanes parts and systems, but all through digital means. Based at different locations around the world, team members worked concurrently, sharing their knowledge rather than applying their skills sequentially. As a result of these innovative processes, the 777 program has exceeded its goal of reducing change, error and rework by 50 percent. Parts and systems have fitted together better than anticipated and at the highest level of quality. The first 777 was just 0.023 of an inch about the width of a playing card away from perfect alignment, while most airplanes only line up to within half an inch. Digital pre-assembly has helped Boeing significantly improve its engineering and manufacturing processes and the overall quality of product. Digital technology has been used to lower costs and decrease the time it traditionally would have taken to introduce this airplane into the marketplace.
2 Source: Boeing News Release Boeing 777 Digital Design Process earns technology award June 1995.

Competing on Digital Content: The New Frontier of Value Creation

Combining Content with Services

Digital content has emerged in parallel with the Internet and wireless applications. Thanks to the World Wide Web, the worlds total published output is now literally a click away. Today, content includes not just the obvious elements, such as images, music and text, but also intellectual property, product and service information, contracts, corporate marketing materials and the like plus less apparent data, such as the components of business processes and software applications. As content moves from physical formats to digital platforms and grows exponentially in volume, the information describing that content becomes more complex.
For example, General Motors Corps Media Archives Group in Detroit has a central, physical library containing a comprehensive visual record of the development, production and promotion of General Motors products from the turn of the century to today. However, increased demands on this extensive collection containing over four million still images, 2,000 motion picture films, 10,000 video masters and over 250,000 digital files have created the need to enhance this gigantic content library. With the help of digital media asset management software, General Motors is leveraging its image archive across multiple media and making images more accessible.3 Complexity is also created by the vast amount of unstructured information that is exchanged before and after a transaction. Consider, for instance, the purchase of a pair of jeans. Current systems support buying a blue pair of Levi 501s, waist size 30. However, blue is a subjective description, and size 30 is far too imprecise a definition to ensure a good fit. A substantial exchange of information is required to replace the physical viewing and trying on of a pair of 501s. Most of us prefer that our clothes fit well. But we buy clothes off a retailers rack where the items have been cut to standard sizes. Wouldnt it be great if your clothes were cut to fit you? Levi Strauss realized that by using digital technologies, it could produce jeans made to fit to a specific individual and do so at competitive prices.4 Levis now offer Levis customized jeans (Original Spin), where production is tailored to the customers exact measurements. For only $10 more per pair, customers are guaranteed jeans that fit perfectly every time and made to their own specifications. The secret is in taking the key measurements electronically and sending them, via the Internet, to the companies that actually manufacture the jeans. Furthermore, at all times the customer can track the progress of the personal pair throughout the manufacturing process. The era of mass personalization and customization is upon us. Business and consumer transactions like these are rife with unstructured information. Once you have established that a washing machine is in stock and you know its price, you still need a host of additional information in traditionally unstructured formats pictures, customer reviews, comparisons with other models, measurements, etc. The amount of information around media products is even greater. For a music star such as Britney Spears, you need to have her tour dates, fan discussion groups, gossip, interviews, audio and video clips and merchandise descriptions. Customers are overloaded with choices. They need improved mechanisms for navigating this information. Imagine having a digital jukebox in your living room with all the worlds music on it, but you can only hear your selection by scrolling down the entire list in alphabetical order. Todays customers are too demanding for that. They expect information instantly, filtered to their specific interests and needs.
Source: General Motors Media Online, The GM Media Archives Past and Future, 2002. 4 Source: Levi Strauss & Co, 2002.
Competing on Digital Content: The New Frontier of Value Creation 5
3

Increasingly, not only is the content valuable but also the services surrounding it: services that package and personalize content according to customer preferences, deliver it according to the customers preferred method of access and provide a range of flexible business models to meet customer payment preferences all the while protecting the intellectual property rights that otherwise can be too easily sidestepped by the click of a mouse. Think of it as shelf-ready content. In a supermarket, a wealth of label information on shelf-ready products describes prices, ingredients and dietary information in standardized, easily compared formats. Accenture believes content needs similar, standardized labels.

A digital enterprise needs to install the technology, management discipline and processes to manage both structured and unstructured content. Content may be king, but services reign equally as queen. It is the combination of the two integrated into tailored solutions that drives value creation and capture. However, there is one caveat: even with compelling content and established channels to market, the complexity of the digital marketplace, coupled with a failure to standardize the categorization of that content, could erode value and cause consumer confusion. Content needs to be carefully packaged and marketed if its full value is to be realized.

4 Competing on Digital Content: The New Frontier of Value Creation

Digital Content Capabilities (illustrative)

New Sources of Value

Digital content solutions are emerging fastest in those industries where personalized services can create substantial customer value, and where wireless and broadband communication enables unprecedented opportunities to deliver personalized services to mass markets. Typically this involves improving the productivity of highly paid personnel or selecting high-ticket purchases. Consider these examples:
Music A digital vault to house digital masters of a music companys assets, such as its music catalog, cover art, lyrics and other intellectual property, gives the company the flexibility to deliver digital content anytime, anywhere, through any electronic or mobile device. Publishing Scientific, technical and medical information can be tailored to a customers research needs and delivered into the customers research process, e.g. to wireless devices in the laboratory. Wireless Mobile services provide directory access personalized to the users preferences and situation (e.g. location, time, access device and network). Investment banking A digital content management system enables investment banks to customize research to customers specified needs and preferred method of access and to combine this with notification and trading execution services. Pharmaceutical Drug information can be tailored to the patient, disease and treatment history. Travel and leisure Holiday selection and bookings using rich media can describe holiday locations and combine them with booking services that include associated travel, insurance, car hire, food and facilities information. However, to create and capture more value from personalized digital content and services, industries need to master new capabilities. They need to: Find low-cost ways to communicate more persistently and personally. Know what their customers want on an individual level. Organize information on customer needs and available supply. Develop alternative distribution and access methods. Integrate multiple suppliers to deliver a full-service offering. Apply more complex business models to secure and share revenue, such as subscription and pay-per-use. Capture and organize information on business rights (ownership and usage rights, pricing rules and financial entitlements). Protect intellectual property assets from illegal copying and use.

Enabling Capabilities for Value Creation

Legacy Supply of Products and Services Packaging, Sales and Distribution Customer

To exploit the substantial value that digital content solutions create, Accenture believes markets and their participants need to develop five new capabilities in order to create and manage digital content and services:

Existing Business Functions, e.g.

Manufacturing New Product Development Channel/Product Marketing

Enterprise Application, e.g.

ERP SCM Messaging e.g. e-mail, chat Voice

Legacy Schemas e.g. EDI

Service Packaging
Customer Management Explicit and Implicit Profile Contact/Usage History Situation, i.e. Time/Location

Access
Business
Network Types Device Types Browser Operating System

Consumer Hybrid Business/ Consumer Internal

Distribution

Supply of Digital Content 1 2

Application Management Physical, e.g. print Communication Electronic, e.g. e-mail PIM Content Applications

1 Information standards (taxonomies) to describe and compare available products and services, preferably evaluated by those who have used them. Amazon provides one example, where books are classified by genre, author, sales ranking and type of buyer. Excerpts, editorial reviews, customer reviews and ratings all provide ways for customers to further filter or qualify their interests. Extending this to finding a washing machine, plumber or a date for the evening would provide huge benefits as well as obvious challenges. 2 Structured, organized information (profiles) to describe customer needs. Profiles include a customers stated preferences, implied interests based on usage and immediate situation, such as location, time and access device. This information is used to match available and relevant products and services. 3 Standards for agreeing on and applying commercial terms. Personalized services that integrate the products and services of several providers require new business models. To be implemented, these models need to determine the detailed business terms that govern pricing and delivery responsibilities. In the music industry, instead of selling an album for a fixed amount from one artist, the industry is looking to provide subscription services that allow the individual consumer to link multiple artists into a unique personal playlist. However, to do this the industry must redefine its business terms along the value chain around new and agreed-upon business models, and automate them to support cost-effective business operations. Business Rights Management (BRM) and MPEG 21 are tools that facilitate this.

4 Technology to protect digitized content assets. The ease of copying and reproducing content once it has been digitized is a major commercial threat to content owners. The average PC can copy music files, and faster connection bandwidth makes the illegal transfer of these files convenient. The music industry must make the unauthorized copying and transfer of music more difficult and also make it attractive and convenient to adopt legal alternatives to emerging music services. However, copyright theft is not confined to the entertainment sector. Many industries are concerned with protecting their intellectual output, including software developers, investment banks (proprietary research) and products companies (mobile phone designs), not to mention their marketing material and strategic plans. Technologies can help. Watermarking provides ways to identify and track legal digital copies. Encryption can prevent illegal access and copying. Digital containers require identification and knowledge of approved users before access is permitted. 5 Ubiquitous, open and high-bandwidth connections. Without widespread, high-speed Internet access, the technology industry and the economy at large will remain stalled. The economic benefits of electricity, the steam engine and car all depended on the buildout of networks the grid, rail and road networks. The economic benefits of digital content services can only be leveraged when the majority of customers participate in this more efficient marketplace.

Content Production, e.g.

News and Entertainment Research Reference Publishing Training, eLearning New Product Development Marketing

Content Management, e.g.

Content Application Components Process Components Meta Data Management XML Standards Taxonomy/Meta Data Structure

XML Schemas e.g. NEWSML

Service Management Match and Personalise Permissioning Delivery and Feedback

Marketing
Brand Channel Product/Service

Commerce

Business Rights Management

Authorisation/ Entitlements

Event Monitoring

Billing

Settlement

Reporting

Asset Protection

Watermarking

Encryption

Digital Containers

User Identification

Distribution Infrastructure

ERP II
Broadband, Interactive Distribution Networks Web Services (e.g. .NET)

EAI

Application Server

Hosting

Caching

CRM II

6 Competing on Digital Content: The New Frontier of Value Creation

Developing standards is the first step toward solving these issues. Once standards are agreed upon, low-cost solutions and infrastructure can emerge for example, in the form of next-generation packaged application software and business service providers. As the market for digital content solutions matures, we will see traditional software vendors begin to include new functionality into their software for example, next-generation enterprise resource planning (ERP) and customer relationship management (CRM) applications.

However, the resolution of all five challenges will ultimately determine how well a company or an industry is able to benefit from the opportunities of digital content solutions.

In the pharmaceutical example on page 6, a vast amount of information capture, organization and matching is required to automate or even semi-automate tailored drug information. Data on customer symptoms must be captured accurately, along with the application of medical knowledge to diagnose the disease and suggest a cure based on past treatment effectiveness. This goes far beyond the capabilities of todays Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) applications, which have been built around manufacturing, inventory management, order-to-cash and pricing in other words, systems that focus on managing widgets and money. Similarly, in the financial services industry, the purchase of insurance policies, mortgages or mutual funds typically requires the capture of information on the customers employment, financial history and family situation, followed by the application of historic trends to diagnose risk before providing information on available products. The intellectual property rights issue is equally thorny, as was demonstrated in the music industry by the Napster case. To avoid giving away its intellectual property for free, the industry could provide consumers with alternative subscription levels with different access to the latest hit music, such as bronze, silver and gold service levels. For a subscription of, say, $10 per month, a listener might select just 20 tracks to listen to, or he/she might select over 200. But how do music suppliers decide what music will be available for each subscription level? How will the $10 be split each month among all the stakeholders involved the performing artist, songwriter, composer, band manager, backing vocals, backing instrument players, record company, publishing company, collection and settlement organizations, etc.? How does one get all the current industry participants to agree to a new structure to collect and settle revenue for these new business models assuming they can agree to what these models are?

More fundamentally, how can any of this be achieved if consumers have easy access to free digital copies of the music they desire? The answer, again, is to create new sources of value that depend on having a relationship with the customer one that the customer is willing to pay for. Downloading illicit MP3 files for free may seem to be better value, but if customers pay a little money, they might also get track listings, video artwork, access to the artist and updates on when the artist has produced a new album or is touring. Also, downloading illicit MP3 files takes time, creates exposure to software viruses and delivers variable quality. Consumers with money typically lack time, appreciate quality and do not want to run the risk of a corrupt hard drive. So how can companies fight back to protect their intellectual property against the likes of Napster? Two characteristics are set to define success in offering any kind of content or services in the online world. Firstly, the combination of quality content and convenience as the market for Internet pornography shows (which currently generates an estimated 70 percent of all Internet content sales revenues), consumers are willing to pay for digital content. Although there is much free adult material on the Internet for those willing to look, the high quality and convenience of paid content means that millions of people are willing to punch in their credit card numbers. Secondly, effective branding will help consumers separate good content from bad. Brands like Sony and Nintendo, for example, have become synonymous with cutting-edge video games.

10 Competing on Digital Content: The New Frontier of Value Creation

Competing on Digital Content: The New Frontier of Value Creation 11

Key Technology Enablers

Much of the technology is already in place to digitize and personalize content and services. It is facilitated by two fundamental enablers connectivity and standards.

Key Enterprise Enablers

With the technology in place, two enterprise enablers will facilitate the digital marketplace: new packaging capabilities that match available supply with demand, and enterprise content management that organizes structured, semi-structured and unstructured content.
While information about data and objects is being applied to classify content such as books, films and legal documents, its application is wider than traditional notions of content. Better management of content using standard XML schemas supports the automation of workflow within and between enterprises. In turn, better content management supports the automation of new tasks and service processes. The detailed steps in a business process can be broken down into components that are individually described and indexed. Process automation enables the cost-effective delivery of personalized services. As the graphic below depicts, shelf-ready content and service components can easily be aggregated and navigated downstream for delivery to the customer. Selected components can be assembled dynamically to create personalized and integrated customer solutions. Delivered solutions are monetized via a flexible range of business models, while security technologies, such as watermarking and encryption, protect the intellectual property rights of solution components. This allows a process to change by simply resequencing, including or excluding one or more standard components. Bespoke applications can be collected in real time by assembling a set of standard application components. This is the basis for Microsofts .NET initiative and the more general development of Web services.

Connectivity Broadband connections are becoming ubiquitous, supporting the shift to a personalized service economy. Individual customer experiences are not possible in a world of anonymous retail transactions and unconnected individuals. Customers need to be connected and identified. Narrowband and broadband Internet connections are now connecting a global marketplace to the living room and office. Wireless devices take this further by associating a communication device with an individual. As broadband grows, so do compelling applications that exploit it. More addictive forms of interactive entertainment are coming on-stream. Games networked games in particular look promising. In addition, as customers at the office and at home move to demanding and receiving more services from the Internet, its value and usage will only continue to grow. Standards As the diversity of access devices, access networks, alliances, business models and unique customer requirements proliferates, standards become critical. These include MPEG 21 the new rights standard. Standards for organizing previously unstructured data are beginning to emerge. XML (eXtensible Mark-up Language) is the technology that captures standardized descriptions of previously unstructured information or content. As XML usage spreads, individual industries are creating standardized descriptions, such as NewsML for the news industry, RiXML for investment bank research and xBRL for corporate financial statements and reporting.
12 Competing on Digital Content: The New Frontier of Value Creation

With standards in place, it becomes possible to simplify and organize complexity. We see this working when we want to find something on Yahoo or in a library or encyclopedia. Individual content objects, such as books, are classified and indexed. This requires agreement on a directory structure (known as a taxonomy) and the rigorous classification of objects under this structure (known as meta data). To find something, we need to articulate our needs in taxonomy-consistent terms that are then applied against the meta data to find items that match our needs. In much the same way as all published books have an ISBN identification, so could other types of content. Industry sectors are applying XML technology and related standards for two purposes: To establish taxonomies that define the categories used to index content components. To create the meta data under these taxonomy categories that describe the existing content components.

The Packaging of Shelf-Ready Content (illustrative)

User Request Unique User Run Time Profile Unique Profile/ Application Model Combination
Network Profile
Dedicated Line Public Internet Narrowband Broadband Wireless GSM/GPRS UMTS WiFi UWB Satellite

Unique User View

User Response

Request for Content, Product or Service

Customer Employee Service Provider

User Profile
Home Page Selection Time Usage Preferences Location

Device Profile
Mobile PC PDA TV

Application Model Generation

Run-time Application Inputs Model

Run-time Engine (Dynamic Assembly)

Freshly Unique User Created Session Application Rendering Engine

Mobile/TV WML PC HTML Voice XML Print

Builders Instruct Run-time Engine to Insert Content and Functionality

HTML Data/ WML Voice UI Content UI XML UI

Intranet/Extranet/Internet

Meta Data

Meta Data

Meta Data

Meta Data

Content Application Process Objects Objects Objects Taxonomies and Meta Data on Available Components

Taxonomies and Meta Data Structuring Demand and Response Profile

Enterprise Content Management

Competing on Digital Content: The New Frontier of Value Creation 13

The Seven Components of a Digital Content Solution

Accentures Digital Content Solutions aggregates and integrates content and services to deliver innovative solutions that are personalized to individual company needs.
1 Supply Management. Partner Relationship Management: Internal and external suppliers and creators of content and service components need to be managed and motivated. This process typically requires the creation and enforcement of Service Level Agreements (SLAs). Supply Chain Management: This content function manages the logistics of getting the right products and services delivered on time. Content Authoring: The process of creating new content and applications can occur within, outside or across an organizations boundaries. Authoring might cover text, photos, graphics, applications, process components, models, video and audio. 2 Demand Management. These functions capture and organize the needs and interests of customers. They include: [Next-Generation] Customer Relationship Management (CRM): To support the matching up of supply with customer needs, legacy CRM systems need upgrading to capture and manage customer attributes that correspond to meta data describing the supply of content and services available. Service Delivery Management: Customers distribution and access device preferences must be applied to how content services are assembled, distributed and displayed. Subscriber Management: As service options proliferate to meet increasingly unique sets of needs, the options selected by a customer need to be tracked and maintained, with the customer often responsible for this maintenance. Registration and permission are two of the functions handled by this capability. 3 Commerce Management. A flexible capability to capture and share revenues is essential to support a growing and evolving range of business models. The major functions supporting this ability include: Business Rights Management (BRM): BRM defines and maintains the ownership and usage rights, financial entitlements and pricing rules associated with individual content and service components. Conditional Access: The subscriber management system and business rights management functions support the Conditional Access function, which controls which customer is allowed access to which content. For example, children or competitors may be denied access to specific content. [Next-Generation] Billing and settlement: The collection and sharing of revenue includes, but extends beyond, time and data volume models. For example, content and services may be priced individually, by content category. Event monitoring and reporting: Operating an endto-end digital content solution requires regular feedback along the value chain and entails substantial monitoring and reporting. This function also supports billing. 5 Distribution Management. This capability manages the complexity of traditional push delivery methods and emerging pull access methods. Networks, device functionality and display capabilities require a range of solutions to support quality of service while maintaining delivery costs. Some of the functions supporting Distribution Management include: Compression: This capability reduces the size of content so it can be delivered fast and cheaply across distribution networks. Compression technologies range from zipped PowerPoint files to MP3 and video streaming standards. Delivery Networks: These are gradually merging into a global IP network. However, this will take time to develop. This global IP network will be supported by a common network layer that leverages a range of satellite, cellular, fiber, copper and other infrastructures. Legacy Distribution: This includes retail outlets, traditional print and print-on-demand. In addition, it includes e-mail, Short Message Service (SMS), Multimedia Messaging Services (MMS) and fax. Also, feedback on link click-throughs or navigation of HTML mail provides valuable feedback on interest and usage. Rendering: Personal Digital Assistants (PDAs), mobile and PC devices and operating systems continue to proliferate. These have different navigation, input and display characteristics. Rendering technologies tailor content to the specific attributes and profile of these devices and operating systems. 6 Packaging. The profile of demand attributes is matched to available supply to assemble a solution for the customer. Several models exist: Portal: A portal aggregates, navigates, integrates and personalizes products and services to provide a tailored solution to customer needs. The portal model may incorporate a range of other models to best meet customer needs. An example is my msn.com Targeting/broadcast (push): A solution common to customers in one or more pre-defined market segments is assembled and pushed out to all selected customers. An example is bulk e-mail distribution. Personalization/response (pull): A unique content and service solution is assembled using the latest (e.g. run-time) input on a customers specific requirements. An example is location-based traffic services. Publish and subscribe (hybrid push/pull): Content and services are broadcast but customers are able to filter their selection by subscribing only to what interests them. An example is the Personal Video Recorder, such as TIVO. Syndication: Bulk feeds of content are fed to third parties for their use, subject to agreed-upon business terms on usage and financial entitlements. An example is markets.com 7 Enterprise Content Management. Content and service applications need to be authored and organized in an enterprise content management system that supports ease of purposing content for delivery. Content Management: Internally created or externally sourced content is managed at a granular level with meta data that describes the type of component, type of content, ownership, relationship with other content, etc. The structure of this meta data determines how flexibly content may be retrieved and assembled into products for distribution. Digital Asset Management: This capability, which overlaps Content Management, focuses on the heavy-duty management of rich media assets such as video, audio and application or games software. Workflow tools: Meta data that defines workflow is captured and managed as enterprise content. This meta data defines the selection and sequencing of standard input and output templates as well as the sequence and type of processing tasks.

This requires a company to create new capabilities in order to organize the: Supply of content and service components (which may be sourced externally). Needs of a market segment or individual. Range of commercial models for capturing and sharing revenue. Protection of intellectual property assets from illegal copying and/or use. Range of distribution and access methods. Packaging of available supply to match identified needs. Enterprise Content Management of the taxonomies, meta data and underlying content and service assets.

Optimum target markets include those where the core product or service is largely digital (e.g. music or news) or where the purchase is a highly information-intensive and interactive process (e.g. travel or pharmaceutical). Most of these capabilities require extensive changes to the behavior of expensive knowledge workers, and all seven capabilities require substantial changes to operating processes. These changes are supported by enterprise (and in some cases inter-enterprise) workflow, project management and collaboration tools.

5 Distribution Management 1 Supply Management 4 Asset Protection Management 6 Packaging & 7 Enterprise Content Management

2 Demand Management

4 Asset Protection Management.

3 Commerce Management

New capabilities need to be developed to protect intellectual property assets from illegal use. Watermarking: Provides a unique digital fingerprint. Encryption: Scrambles content so that it can only be used by pre-authorized customers. Containers: Provide a digital lockbox that only allows access to customers who have the authorized key.

The Way Forward

Accenture believes that the overall implications for how value will be created and shared in tomorrows digital marketplace are profound. Digital content solutions are in the vanguard of the ongoing shift from broadcast services and mass production to the market of one. Moreover, digitization is making the market of one economically viable. Though currently expensive, digitizing vast amounts of content opens up significant new opportunities to increase revenue, reduce costs and improve customer service. Equally important, digitization can deliver quantum-leap improvements in the productivity of scarce and expensive human resources.
The path ahead will not be smooth, however. Standards must be adopted that support the automation of supply and solution assembly processes. New business models must be developed that capture the value created and share it throughout the value chain. Broadband connectivity must continue to be expanded to increase the addressable market size. Perhaps the biggest change and often the hardest involves the human component. The next wave of digital technologies will redefine the way a corporation works within itself and with its stakeholders. Individuals will have to be retrained, workflow re-engineered, and all the processes involved in end-to-end content management will need to be re-thought. Digital and physical value chains will need to converge to deliver an integrated, tailored customer experience, as the graphic opposite shows. The full value chain includes both value creation and value capture. Value creation encompasses shelf-ready content and service components and the dynamic assembly of personalized solutions. Value capture comprises the monetization and protection of assets. Monetizing will require a flexible range of business models supported by complex rating and billing engines. Markets will need to offer customers a variety of charging structures and payment methods and share the revenue with multiple parties. Asset protection includes educating customers on the implications of illegal use, along with protection against unauthorized use and copying.

Physical and Digital Value Chains (illustrative)

ERP and CRM Physical Value Chain (widgets and money)
Product Production
New Product Development Production SCM

Reinventing Investment Banking Research

Generate and Fulfil Demand
Sales and Marketing CRM Product Packaging Physical Distribution

Asset Management
Warehousing Inventory Control

Product
Price Availability Options

HR, Finance, Legal, Business Performance Management Customer Experience

Content Production Content Management
Risk Media Management Archiving Meta Data Management Content Yield Management

The research function at investment banks is a multi-billion dollar business. For the top 26 banks alone, research costs $6 billion annually 5. Accenture estimates that inefficiency in research accounts for about $100 million in waste across the value chain of a Tier One bank. Waste comes from distribution inefficiencies, such as unwanted or duplicate distribution of content, as well as from inefficient analyst production processes.

Content Distribution
Sales and Marketing CRM Service Packaging Content Distribution and Feedback

Digital Value Chain (semistructured and unstructured content)

Servicing Content Creation Content Entitlement (e.g. News, Marketing Information, Product Information, Research, Entertainment Content)

Service

Business Rights Management, Entitlements, Event Monitoring, Billing and Settlement [Digital] Asset Protection Workflow, Project Management and Collaboration Tools

Transforming the research function tells another story, however. For most of the top 10 investment banks, Accenture analysis shows that digitizing the research function could deliver $50$100 million in annual savings and $100$300 million in incremental annual revenue all for a $30$40 million investment. Accenture and Reuters have developed an end-to-end Digital Content Management (DCM) solution for the research function of investment banks. The solution draws upon their joint experience from working with multiple news, media and communications firms. The DCM solution offers investment banks substantially lower costs for research creation, packaging and distribution. Rather than blast non-differentiated and duplicate information to analysts, this new solution provides a tailored response that meets the needs of specific segments or individuals. The first step is to think of a research report in its component parts. These may include a heading, an abstract, a conclusion, tables of data and the hypothesis. There are additional possibilities as well. Why not include an audio or video clip? Why not link research back to the source material? Why not link it to market data and continuously update the document? In this way, the shape of the document begins to change. It is no longer a research report; it is a piece of live argument and analysis. Thinking of a research report in its constituent parts also simplifies the documents distribution and retrieval. A granular view of available content allows a bank to

re-engineer supply in response to demand. Distribution also can be re-engineered. Entire documents or components can be distributed to specific audiences. A unique set of content and service components can be assembled in response to a unique user request or anticipated need. The technology underlying this solution draws on the technologies and workflow techniques commonly used in the news, media and communications industries a natural fit, since publishing is at the heart of investment banking research. Reuters, the worlds leading news organization, already has made a step in this direction. The company is offering NewsML solutions, which allow for the automated tagging and filtering of multimedia news stories` as an open standard. Reuters is developing NewsML solutions for a wide range of companies that need to offer compelling content to the new world of the digital consumer. Content providers and carriers alike need robust and reliable standards, which can free them from the complexity of context management and allow them to get on with the task of supplying compelling content to their users. Bottom line? The productivity of buy- and sell-side analysts is considerably improved which rewards banks with higher revenue and greater loyalty. Costs are cut considerably, and the foundation is laid for new and more valuable services. The Accenture/Reuters DCM solution changes the game entirely.
5

Bringing multiple products and service components together to deliver a holistic, personalized customer experience can be facilitated by acquiring all the pieces (e.g. AOL Time Warner) or as a series of partnerships (e.g. Linux). In both cases, the challenge is to achieve flexible, low-cost integration of individual service components, whether these are sourced from multiple in-house or third-party suppliers. However its done, theres no time to waste. Whether you know it or not, you are already competing on content. Winning or losing customers. Creating and capturing significant value or failing to. In this brave new digital world survival is not a right. To really succeed, companies will have to think differently and act quickly. The speed of change will be dictated by the men and women on the street, in their homes, at work, on vacation. It is already happening today.

The prize is apparent: deeper and more binding relationships. Higher revenue, lower costs, improved service, increased profitability and shareholder return. First movers can build a sustainable lead in the digital world. As the visionary Dr Alan Kay states, The best way to predict the future is to invent it.

Are you ready?

Source: Accenture analysis April 2002.

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Competing on Digital Content: The New Frontier of Value Creation 21

About Accenture
Accenture is the worlds leading management consulting and technology services organization. Through its network of businesses approach in which the company enhances its consulting and outsourcing expertise through alliances, affiliated companies and other capabilities Accenture delivers innovations that help clients across all industries quickly realize their visions.

With more than 75,000 people in 47 countries, Accenture can quickly mobilize its broad and deep global resources to accelerate results for clients. The company has extensive experience in 18 industry groups in key business areas, including customer relationship management, supply chain management, business strategy, technology and outsourcing. Accenture also leverages its affiliates and alliances to help drive innovative solutions. Strong relationships with this network of businesses extend Accentures knowledge of emerging business models and products, enabling the company to provide its clients with the best possible tools, technologies and capabilities. Accenture uses these as a catalyst, helping clients anticipate and gain value from business and technology change. Its home page is www.accenture.com

The Accenture Media & Entertainment industry group teams with many of the worlds leading media and entertainment companies as well as a number of innovative new businesses and alliances. Our clients span broadcasting (television and radio), entertainment (music, film, video, games and gambling), publishing (newspapers, magazines, books), information services, advertising, the arts and sports. Accenture is at the forefront of driving the digital convergence agenda for its clients and implementing innovative solutions. Accentures Digital Content Solutions helps companies create, manage, protect, deliver and monetize their content. Accenture accelerates clients return on investment with solutions that maximize the value of content and develops the infrastructure to exploit new markets, products and business models. Enterprises partner with Accenture to build digital content infrastructures that accelerate them through the fast-moving marketplace for revenue-generating and cost-reducing opportunities. More than 1,200 dedicated professionals around the world have developed a core set of skills designing and building digital content solutions for the communications, media and entertainment businesses.

24 Competing on Digital Content: The New Frontier of Value Creation