Springtime Productions

www.springtimeproductions.com.au

Executive Summary

Springtime Productions is a digital media production company.  Its services include video production and digital imaging. The company's customer base is made up of broadcasters, arts based companies and the wider community.

Director, Keren Flavell, introduced e-commerce when the company began operations in 1995.  Keren believed that electronic communications would be a convenient and cost-effective way to manage long distance relationships with clients.

Keren recognised that effective use of electronic communications with clients, suppliers and subcontractors would require installation of a secure system.  Tight security systems would provide customers with the confidence to support electronic transmission of client deliverables and project resources.  Security initiatives implemented by Springtime Productions include a firewall, anti-virus software, password protection, email usage policies, data back-ups as well as physical security of the building.

E-commerce has been successful in simplifying communication with clients and project members.  Presentations can be sent electronically, net meetings can be arranged in place of physical ones and all project information can be kept in a centralised location.  With the installation of Broadband Internet access, many business practices can be conducted online.

This has resulted in significant cost savings for the company, totalling approximately $67,400 in 2001.  Most of these savings are the result of staff time saved in travelling, corresponding by phone and fax and in conducting physical meetings.  Keren believes implementation of e-commerce was a valuable decision, considering the initial outlay of $9,680.

The Business

Springtime Productions specialises in the production of digital media.  The company's services include audio and video production, print design and digital imaging.  Springtime Production's customer base is made up of broadcasters, arts based companies and the wider community.

The business is based in North Melbourne, VIC and employs two full time staff and subcontractors when required.

Getting Started

Keren Flavell, Director introduced e-commerce when the business began operations in 1995.  In developing her business strategy, Keren believed that e-commerce was essential for the growth of Springtime Productions.  Electronic communication would be a convenient and cost-effective way to manage long distance relationships with clients.

In conducting research regarding online systems, Keren contacted friends and colleagues for advice and ideas.  She also read e-commerce related books and journals.  Online research was also performed with Keren accessing developer networks and newsgroups to obtain the latest information on strategies and technologies that would best suit her business needs.

E-Security

It was recognised that successful use of online project management tools and electronic communications with clients, suppliers and subcontractors would require installation of a reliable and secure system.  In particular, a tight security system would provide customers with the confidence to support electronic transmission of client deliverables and project resources.  Taking into account the nature of digital media, appropriate security of online networks would also impact customers' confidence in the company. 

Springtime Productions installed a firewall to control Internet connections into and out of the business.  All website hosting occurs externally and security is ensured by the web host.  The company has put email policies in place to protect the system, for example an attachment should not be opened unless it is expected, even if the staff member knows the sender.  Virus protection software has also been installed on each machine to minimise the risk of viruses being transmitted from file transfers or email.

The internal system is password protected from unauthorised access.  When working on projects involving several parties, each subcontractor and project member is supplied with their own password in order to control access to particular information.

In case of attack or file destruction, all business data is backed-up on a nightly basis and the tape is taken to an offsite lock up box every week.  This minimises the disruption to business activity should the computer systems fail.  In addition, building premises security provides physical protection to the terminals.

Current e-commerce strategy

E-commerce is predominantly used in communication with clients and subcontractors. 

Springtime sends presentations to clients electronically and organises net meetings or  conference calls to discuss the work. The company also deals with subcontractors online where project resources and information can be efficiently exchanged with specific workgroups.  For example, in a large shoot all parties have "call sheets" that must be mailed or faxed.  With the use of an online data repository, all project information is kept in a centralised location, simplifying the retrieval and submission of project documents.  With access to Broadband Internet via Asymmetric Digitial Subscriber Line (ADSL), large files containing graphics and images can be easily transmitted electronically.

A content management system is used for publishing, which uses a web interface to submit the content to the publishers. Publishing also occurs at a central point such that clients can view and provide feedback on mock ups online.

Much of the research required for projects is now conducted online rather than physically travelling to the library and searching for information on microfiche.  In addition, books, DVDs, and film passes are also purchased online.  Where previously, staff had to spend time searching for books not held in regular bookshops, searching and ordering online is now a simple process.

Many financial functions of the business are now managed online.  Clients are expected to pay for Springtime's services over the Internet and Springtime conducts its own banking and creditor payments online.

Revenue and Costs

* Note: Capital Expenditure is amortised over a four-year period

Financial Analysis

While the set-up of the online system has not provided an additional income stream for the business, substantial benefits from implementing the e-commerce system have come in the form of cost savings.

A total cost saving of approximately $67,400 was achieved in 2001.  With the increased use of electronic communications to correspond with clients, it is estimated that one third of staff time is saved in not having to travel to clients or other project venues for meetings, banking, and talking on the phone ($64,350).  This figure also includes time saved through the use of net meetings and conference calls to discuss work that has been submitted online - Keren estimated that meeting times have been reduced by three quarters.

Savings in staff time have also been achieved in the use of electronic communication to send files to clients.  By facilitating the electronic transmission, filing and retrieval of large files, time is not wasted in searching for paper copies or referring to incorrect documents.  In addition, the use of online research has saved staff time in not having to travel to the library to wade through microfiche or track down unique books not available in general book stores.

The prevalence of email usage over phone and fax as the main form of communication with project members has also reduced the cost of office supplies.  Springtime has been able to reduce postage costs by $1,560, printing costs by $720, and stationery costs by $300.  By no longer having to use a fax, $470 is saved for paper, carrier and hardware costs.

Since 1995, Springtime Productions has invested a total of $9,680 into the establishment of an online system in the business.  The most significant outlay was incurred in staff time spent developing the website, the approximate value being $7,000.  In setting up a network computer system, a router and server box was purchased ($800), firewall and gateway software was also installed ($900).  To prevent transmission of viruses from email or Internet downloads, anti-virus software was installed on all machines ($400).  Other start-up expenses included registration of domain name ($180) and installation of the ADSL line to enable Broadband Internet access ($400).

Ongoing costs totalled $4,520 in 2001.  These are associated with maintenance of the online infrastructure including $180 for website hosting, and $1,620 for rental of the ADSL line, this includes ISP charges.  Purchase of tapes for backing-up data incurred $300.  In addition, $2,420 is allocated to the amortisation of capital expenditure over four years.

Non-financial Benefits

E-commerce has introduced considerable non-financial benefits to the company. Time saved in no longer having to travel to clients premises or correspond by phone/fax, is directed towards the actual production process so that service delivery times are improved.  Any amendments to client work can also be quickly integrated into the project without delays in communication and response time.

With the installation of the firewall into the Springtime network, staff are reassured that internal data content and systems are protected from outside intrusion.  This is particularly important considering the increasing usage of online document repositories.  The nature of project work where several sub-contractors are involved requires that restricted access be enforced for particular documents.

Challenges

Many of the challenges faced by Springtime in implementing e-commerce are related to cultural shifts.  While some customers did not understand the concept of digital media, other customers were not familiar with usage of online systems in business.  Training on electronic communication procedures was therefore essential.  Keren undertook and was even paid for some training provided.

Keren believes that continual up-skilling and increasing awareness of digital and online technologies will resolve these issues. 

Future

To further improve the management of projects, Keren plans to provide all crew and production teams with synchronised Personal Digital Assistants (PDA).  This will assist with co-ordination of schedules and sharing of knowledge, which will in turn impact on the delivery of service to clients.  Springtime Productions also intends to introduce seamless integration of publishing among different platforms such as television, DVD and third generation telecommunications (G3).

Keren's advice to other businesses considering e-commerce implementation is to ensure that adequate security measures are implemented to prevent effective online operations being compromised by system attack.  To this effect, staff must be trained on email management and protocol.

To obtain the most effective result from e-commerce, Keren believes it is important to explore all digital marketing opportunities and consider ways in which inefficient systems can be transformed by using Internet technology.