Critical Evaluation of the BBC Digital Media Initiative - Coursework Example

Critical Evaluation of the BBC Digital Media Initiative Executive Summary The Digital Media Initiative (DMI) project was launched in order to changethe means in which the staff of British Broadcasting Corporation (BBC) create, utilize and share audio and video material. It includes the expansion of new technology to allow the staff to handle the content effectively and to provide the viewers with better convenience of the digital content on online, radio and TV. Successful functioning of the project has a great strategic significance for British Broadcasting Corporation, incorporating and supporting the move of BBC to Stanford since May 2011. The initial phase of the DMI project faced significant complications but while taking the DMI project back, delivery of system has been progressed well. However, the DMI project is no longer supposed to deliver overall net profit of £17.9 million (mn) as originally predicted. The Programme was approved on the base of costing £81.6 mn as well as delivering profits of £99.6 mn, however now it anticipates £133.6 mn costs and profits of £95.4 million; thereby a net expenditure of £38.2 mn. Later on, the DMI project was terminated because British Broadcasting Corporation had experienced 2 years of hold-up and lost £26 mn. Table of Contents Table of Contents 2 Introduction 3 BBC’s Digital Media Initiative (DMI): a Complete Failure 4 Project Management Theory 5 Project Planning 6 The Risk Control Framework of BBC 7 Conclusion 7 Recommendation 8 Reference List 8 Introduction The British Broadcasting Corporation (BBC) has publicized the commencement of Digital Media Initiative (DMI) in the year 2008. The Digital Media Initiative or the Digital Media Programme was launched with the intention to modernise and improve the archiving and production processes of the organisation. It is considered as a cutting rim project which will progress the way of operating BBC. During February 2008, under the contract of Technology framework, the British Broadcasting Corporation allows a contract of £79 mn to Siemens (IT contractor) with no open competition. It was assured that the contract includes the deliverance of technology and operation of DMI plan till March 2015. However, there was non-deliverance of technology and the contract was terminated in July 2009 (House of Commons, 2011). The DMI project was terminated because it accounts for a lack of growth and sequence of problems. In the year 2014, the NAO i.e. National Audit Office, presented a report signifying that the British Broadcasting Corporation’s £98.4 million initiative have been unsuccessful because the DMI plan lacked proper preparation and was also perplexed in its objectives and governance. So, the approach of British Broadcasting Corporation towards the Digital Media Initiative was very disappointing and also did not attain the value for money. The initial phase of the DMI project faced significant complications, but the British Broadcasting Corporation reacted with efficiency and speed, and while taking the DMI project back, delivery of system has been progressed well, by means of users reacting positively (Nao, n.d.). BBC’s Digital Media Initiative (DMI): a Complete Failure The contract of BBC with Siemens to construct the Digital Media Initiative programme was unsuccessful and that’s why it was terminated by means of mutual harmony between them. The DMI programme was regarded as a complete failure. The manner in which BBC had appointed the Siemens without new rivalry and then was also incapable to intervene efficiently in system growth without undermining the movement of financial risk towards Siemens was not the efficient method of resembling the deliverance of complex programme (Nao, n.d.). British Broadcasting Corporation has given the contract of DMI to Siemens under the technology framework contract intended to offer efficiencies by reducing the procurement costs. The Digital Media Initiative programme was absolutely essential for the BBC and it was also stated that the future of British Broadcasting Corporation was coupled with the thriving delivery of Digital Media Initiative programme. It was assured by BBC that the organisation was on its path in order to deliver the programme without any delays. All of a sudden it came out that British Broadcasting Corporation delivered no assets, although costing payers of licence fee £98 mn, and then BBC cancelled the DMI programme. When the British Broadcasting Corporation took the Digital Media Initiative in-house, the DMI came into trouble and was in delay of two months. In spite of the problems faced by Siemens and breaks in its personal capability, BBC still assumed that it can deliver the programme itself. The reason of failure was that the British Broadcasting Corporation did not attain the technical assessment of the design as soon as it obtains the Digital Media Initiative in-house. The business area was not engaged adequately and even did not obtain the ownership of programme. Moreover, it is also said that the senior leaders have lacked the confidence towards the project. The key lesson which the BBC learns from the DMI failure with Siemens was the significance of having effective and clear project governance, along with suitable depiction from the business areas, projects and suppliers (House of Commons, 2014). The Executives of BBC should use more accurate and timely inspection to its main projects to reduce potential losses. The British Broadcasting Corporation was unsuccessful in sharing the important facts about the Digital Media Initiative with National Audit Office, and it has contributed to false impression of BBC about the Digital Media Initiative’s progress (House of Commons, 2014a). What the Digital Media Initiative actually delivered: BBC declared that it have wrote off the whole value of the assets of DMI because it believed that the system parts which it was utilising may not have long-lasting economic significance to the British Broadcasting Corporation and would require improvement or replacing. The DMI have created the “archive database” which will be used by the BBC staff to order and search completed programmes on television in the archives of BBC. It was decided by BBC not to utilise the second major component of DMI i.e. “production tools”. It was designed to help staff to organise and share digital content and can also carry out essential editing on the desktops. The third major component was digital archive. It was planned by BBC to integrate it with the production tools (House of Commons, 2014). Project Management Theory Project Management is defined as the use of methods, processes, experience, knowledge and skills in order to accomplish the objectives of project. The main components are: capturing project necessity, estimating the resources, identifying quality of deliverables; defining the cause behind the necessity of project; preparation of business case in order to validate the investment; development and implementation of management plan required for project; securing corporate funding and agreement; motivating and leading project delivery group; monitoring development against plan; managing the changes, issues and risks in the project; managing the budget of the project; and upholding communications with project organisation and the stakeholders. Project management requires people to approach together to focus on the objectives of the specific project. Therefore, efficient teamwork is necessary for a successful project. The way of managing the work depends upon various factors such as the significance, scale and the complexity of work. Project Management Theory is used for the reason that the investment in efficient project management would have numerous benefits to the host firm as well as the people included in delivery of the project. It provides a better likelihood of attaining the required result; satisfy the various requirements of project’s stakeholders; and ensure efficient utilization of resources (Apm, n.d.). The two types of project management theory are project planning and risk management which are discussed below. Project Planning It describes the project actions and the end products which will be executed and explains how the project activities would be achieved. The function of the project planning is to describe each main task, approximate the resources and time required and to provide a structure for management control (Cioarchives, 1997). Steps of Project Planning: Project scope: It means to recognize the problem as well as the work which should be done. Estimation: It lays emphasis on how much time and effort will be required to accomplish the project. Risk: It indicates that how can anyone avoid the risk associated with the project. Schedule: It means how the resources can be allocated besides the timeline and what can be the milestones. Control strategy: It means how to control quality and change (Cmu, 2005). Risk Management Risk is referred as anything which can impact the completion of organisational objectives. Risk management helps the organisation in identifying as well as evaluating risks within a continuously challenging and changing business environment. Risk management is more commonly focused around infrastructure, IT security and policy and related to organisational or industrial damage in the form of viruses, computer theft, failure of IT projects and software or hardware faults (Greener and Rospigliosi, 2014). Risk management can be done through predictable and stable reporting structure which defines the exact tasks and responsibilities to the suitable personnel inside the organisation (Andersen, 2006). The main reason behind implementing risk management is to facilitate efficiency and effectiveness in the organisation. It is the proactive approach towards increasing the value of shareholders (Bonham, 2008). Defining the type and amount of risk which is acceptable for the organisation permits them to plan a strategy accordingly. While risk management approach, risk appetite and risk environment are the main elements to companies in order to achieve their business plans (Spedding and Rose, 2008). Financial risk lessening involves reduction of recognized financial risks. Strategic suppliers could support buying companies through joint development as well as functioning of countermeasures in order to reimburse for the negative financial outcomes due to volatile market developments (Jahns and Moser, 2007). BBC was facing the financial risk. One of the ways of eliminating financial risk is determining the risk and dealing better than the competitors (Damodaran, 2008). BBC is accountable for collection of the licence fee profits. The guidelines for collection of fee are made by BBC in agreements with appropriate legislation and government departments. The internal control system handles risk towards a reasonable extent, instead of eliminating it to achieve aims, policies and objectives. Therefore, it can only present reasonable but not complete assurance of efficiency (BBC, 2011). The main aspects of management of risk within BBC include reflection of wide variety of risks which includes operational, financial and editorial risks. The Board of executives approves the business plan which intends to deliver the BBC strategy (Hopkin, 2014). The Risk Control Framework of BBC The key elements of BBC for handling risk towards licence fee earnings include: The Revenue Management head is accountable for identifying as well as supervising the risks facing licence fee earning process, and retaining a risk register, simultaneously with mitigations. A dedicated vital team of risk management works with the stakeholders to make certain the continuous growth of the method and suitable ownership of every risk. Specialist functions supervise management of the main part of risk for example efficient ownership at senior level, information security, and making sure that the appropriate framework were in place or not. The Board collects regular updates and reports on the mitigation strategies and risk exposure of BBC (Bbc, 2011). Conclusion The contract of British Broadcasting Corporation with Siemens to construct the Digital Media Initiative programme was unsuccessful and that’s why it was terminated by means of mutual harmony and now the BBC is delivering the Digital Media Initiative plan in-house. By leasing the agreement without competition, British Broadcasting Corporation did not investigate the relative strengths and capability of prospective suppliers. Now the BBC would be more cynical about such approach. The BBC shifted too much of financial risk towards Siemens, though knowing the degree of technological modernization involved. The BBC was unsuccessful to complete the Digital Media Initiative programme and cancelled it during May 2013 at a price to licence fee customers of £98.4 mn. It indicates that BBC did not encompass a good understanding of Siemens development work and design, and was not able to intervene efficiently even knowing that delivery is at risk. The outcome was a delay of two year in securing technology for programme. While the expectation of BBC from the DMI programme was both, the financial as well as non-financial benefits. The non-financial benefit includes changing the method the British Broadcasting Corporation makes programmes (House of Commons, 2011). Given the breaks in the in-house ability of BBC, it is unclear why the British Broadcasting Corporation ever thought to complete what the Siemens have been not capable to deliver. Recommendation The DMI programme should be directed by a qualified senior responsible holder who possess the skills, determination and authority in order to attain transformational modification, and who views the programme thoroughly to thrive the implementation. The British Broadcasting Corporation should make sure that the assurance and governance arrangements should match the strategic importance, risk profile and scale of its main projects and programmes. In its exposure on main projects and programmes, the BBC should exercise clear milestone which gives the Trust and the Executive an accurate and unambiguous account of development. The Executives of BBC should use more specific and timely inspection to its main projects to reduce potential losses which will eventually fall on warrant fee payers. British Broadcasting Corporation easily acknowledged new savings in order to reimburse for the monetary penalty of the agreement, where failing recommends that BBC must be more cautious in securing actual value and effectiveness. The British Broadcasting Corporation must be totally translucent in its transactions with the National Audit Office and also inform them about the potentially important facts or evidence in a sensible way. Reference List Andersen, T.J., 2006. Perspectives on Strategic Risk Management. United States of America: Copenhagen Business School Press. Apm., n.d. Association for Project Management. [online] Available at: . [Accessed 4 November 2014]. BBC., 2011. British Broadcasting Corporation Television Licence Fee trust Statement for the year ending 31 March 2011. United Kingdom: The Stationery Office Ltd. Bonham, S.S., 2008. Actionable Strategies through Integrated Performance, Process, Project and Risk Management. United States of America: Artech House. Cioarchives., 1997. Project Management Planning. [pdf] Available at: [Accessed 4 November 2014]. Cmu., 2005. Project Planning and Scheduling. [pdf] Available at: [Accessed 4 November 2014]. Damodaran, A., 2008. Strategic Risk Taking: A Framework for Risk Management. New Jersey: Pearson Prentice Hall. Greener, S. and Rospigliosi, A., 2014. ePub – European Conference on Social Media. United Kingdom: Academic Conferences and Publishing International Ltd. Hopkin, P., 2014. Fundamentals of Risk Management: Understanding, Evaluating and Implementing Effective Risk Management. United Kingdom: Kogan Page Publisher. House of Commons, 2014. BBC Digital Media Initiative – HC 985. Ireland: The Stationery Office. House of Commons, 2014a. BBC Digital Media Initiative: Fifty – second Report of Session 2013-14. London: The Stationery Office Ltd. House of Commons, 2011. The BBC’s management of digital media initiative: twenty-ninth report of session 2010-11. Ireland: The Stationery Office. Jahns, C. and Moser, R., 2007. Strategic Purchasing and Supply Management: A Strategy-Based Selection of Suppliers. Berlin: Springer Science and Business Media. Nao., n.d. The BBC’s Management of its Digital Media Initiative. [online] Available at: [Accessed 4 November 2014]. Spedding, L.S. and Rose, A., 2008. Business Risk Management Handbook: ASustainable Approach. United States of America: Elsevier. Read More