IT Gets a Seat in the Boardroom

Things used to be simpler. Cable’s business consisted of one-way video to the home using technology that had been around for decades.

But then came broadband. And a few years later voice over IP. Today the industry’s enmeshed in wireless, raising the bar on reliability for commercial markets and interactive applications (for real this time). Don’t look now, but your company’s computer guy has become the consummate chief information officer and has risen to unprecedented prominence.

With new technologies swirling in a vastly more competitive environment, these Heroes of Geekdom have exchanged their T-shirts for suits and are shouldering more of cable’s hopes and dreams. "We definitely do not have a lack of initiatives," says Frank Boncimino, SVP and CIO at Time Warner Cable. "We’re coming up with new architectures that will protect us a little bit and build toward an infrastructure that supports cross-platforms and cross-products."

Indeed, the creation of seamless back-office systems, the CIO’s bailiwick, has never been more important to cable. After all, how can MSOs compete against multibillion dollar threats like Verizon and AT&T in the quad play and beyond if operators’ systems don’t function efficiently?

But CIOs are transcending technology. "It’s really about the customer experience and the products being delivered," says former Adelphia CIO Vern Voss, who is helping integrate Adelphia’s systems into those of recent acquirers Comcast and Time Warner Cable. "It’s not an IT initiative; it’s a business initiative."

CIOs say this sort of thinking — that IT should be a profit center — has begun to pervade boardrooms throughout cable. Chief executives are leaning in to find out how IT can cut costs, improve productivity and, ultimately, supercharge the bottom line. "It was a push video analog product, and now it’s a technology product," says Cablevision CIO Cliff Hagan. "So [CEOs are] all smarter on the technology, which helps. And it’s in every part of the business. It helps drive down costs, it reduces the complexity, it reduces the time to market, it allows you to do things you couldn’t do years ago. The CEOs and COOs are intimately involved."

CEOs, as well as CIOs themselves, are also more involved with things like CSR training. Gone are the days when CSRs could get by with simple scripts. Today they must explain complicated technologies and services — and keep customers from churning. "They’re very concerned about call-center operations and the CSR who has to sell the bundle," Boncimino says.

IT Departments and the Customer Experience

As their products get more complicated, MSOs also are trying to beef up tech support functions to improve overall customer service and satisfaction. At Cox, engineers are integrating speech recognition into the call-center environment as part of the company’s "customer care optimization" initiative. Cox Communications SVP/CIO Scott Hatfield says the idea is to increase flexibility around call flows and queues. Cox is "already seeing benefits" in tech support and other areas, he says. The MSO also is working on a "unified event ticketing" system to streamline trouble ticketing so techs can resolve problems faster and more efficiently. Comcast, meanwhile, is in the middle of an IT initiative to provide CSRs with a single consolidated view of all of a customer’s services, as well as data about issues that might influence a particular neighborhood. "This capability will allow [the CSR] to handle the customer’s issue more quickly, which not only reduces cost but improves customer satisfaction," says Comcast CIO Andrew Baer. MSOs also are turning to IT departments to create seamless sign-ups for new services. One Comcast IT project centers on giving field techs more technology to reduce the time it takes to activate a customer’s service, especially triple-play installs.

In addition to pursuing the profit potential of IT, CEOs are also focused on relative cable greenfields like commercial services. Hagan says cable’s entry into commercial services is creating new challenges for IT departments. After all, businesses expect reliability that meets or beats what the telcos offer. "You really need that utility model," he says. "The lights have got to work." But it’s an uphill march, considering "some of our competitors have a leap of decades over us," says Time Warner Cable’s Boncimino. Cable CIOs, however, don’t necessarily strive to be more like telcos, choosing instead to leverage cable’s existing strengths to create a more reliable and flexible product. "We’re really not trying to emulate the RBOCs," says Hatfield. "We don’t have a lot of RBOC envy. We’re trying to be successful in our own way."

While engagement levels vary among companies, cable execs depend more than ever on CIOs to coordinate technology initiatives that in the past were often put in separate silos. Rob Reynolds, Comcast’s VP, software development and systems engineering, says Comcast integrates technology across the company rather than unit by unit. "We’re working across all of these groups," he says. In some cases, that’s creating a power shift in respect to IT vendors, who used to sell across different business units with little regard for a company’s overall vision. That left much power in the vendors’ hands as they largely dictated specific architectures. "In every project, we have to focus on the patterns and how to keep it flexible," says Baer. "In order to get that flexibility and time to market, we need to control that architecture." This means getting vendors to fit Comcast’s model rather than the other way around, a function of how the cable business has changed with the introduction of VOD and other services. That greater reliance on software (VOD menus, dynamic ad insertion, etc.) has pushed operators toward more internal controls. "Our CEO realizes that our products are really more about software than ever," Baer says.

Meanwhile, the constant march of the telcos into cable’s core video business has also helped drive IT initiatives that improve cable’s back-office competitiveness, not only within each company but across the industry at large through efforts like CableLabs. "That’s going to be important in how we deal with competitors," says Reynolds. "It will be interesting to see how that shakes out in the next few years." Of course, CIOs lack their own industry association, which is part of the reason that the NCTA stepped up two years ago to create a CIO track at its annual convention (see sidebar).

Challenges for Programmers’ CIOs

On the content side, cable programmers are grappling with broadband video and mobile platforms, and executives are showing more interest in back-office issues. But such engagement can have its limits. "They want to know, but they don’t want to look behind the curtain sometimes," says Gwynne McConkey, Lifetime’s SVP, operations, information systems and technology. "They want their technology to be transparent, but they don’t want to work very hard at it. They want to work very hard at programming and marketing."

CIOs at cable programmers face unique challenges when it comes to exportable content. At Scripps Networks, a strong exponent of online and mobile content, technology-based expenses "have grown dramatically," says CIO Ron Johnson. Even seemingly basic internal functions — like searching for internal files — are getting attention. Companies can lose money "when people can’t find something," he says. Another hot issue is programmers’ ability to quickly convert and re-post linear content on multiple platforms. Cataloging large amounts of content requires robust IT systems.

In fact, CIOs say that customers’ use of multiple platforms to consume content on demand is a shift that will challenge IT departments for the foreseeable future. "You’re going to have Internet content all over the place and all kinds of deals in place," says Johnson. "You’re going to be serving ads into it, and your partner is going to be serving ads into it. How do you manage your inventory? How do you project and forecast? How do you do an upfront?"

Set-top boxes, meanwhile, are evolving into OCAP-enabled IP devices. "Those set-top boxes are going to become available to third-party developers," says Comcast’s Baer. "That is going to be a significant change for us… Now we’re doing a Web 2.0 model across our video networks and set-tops, and that is going to change everything we do from an internal IT perspective. We have to think about how we’re going to do partner registrations, how we’re going to do billing, how we’re going to do partner settlement on a whole series of activities."

To be sure, the last decade has brought greater complexity to the cable business, and the future looks more complicated. CIOs — many with institutional knowledge that predates the introduction of cable modems in the mid-90s — have become the go-to folks expected to figure it all out. As Cox’s Hatfield notes, "We understand the complexity of the business." For cable execs depending on the back office to support the bottom line, those are comforting words.