Changing channels

In 1998, UK broadcaster Channel 4 embarked upon a period of substantial expansion that continues to this day.
That year, it launched satellite-based film channel Film4. The following years brought a steady stream of new endeavours, including E4, More4 and 4Music. In 2006, Channel 4 embraced the Internet as a distribution channel with the launch of its on-demand video site, 4oD.

That expansion put the broadcaster’s IT systems under strain. The launch of Film4 in particular made life difficult for the broadcaster’s advertising sales team, recalls CIO Kevin Gallagher, as the sales application at the time was ill suited to selling across more than one channel.

“We had an ageing system that was creaking,” he explains. “Channel 4 was moving from being a single television channel to being multiple channels, but we were starting to be hampered by the sales application that we had.”
Unfortunately, an off-the-shelf application for cross-channel broadcast media sales proved hard to find. “Television advert sales in the UK is fairly niche,” Gallagher explains. “There isn’t really much on the IT market place that covers it.”

Channel 4 therefore decided to develop its own sales support system. However, it soon realised that the cost of this would be prohibitive, and so opted to have the system built by Indian outsourcer NIIT. “Given the scope of the application, it was only going to be financially feasible to do it offshore,” he recalls.

Back then, the practice of offshoring was still in its infancy, and Gallagher accepts that the decision was something of a gamble. “Doing it offshore was quite a big risk at the time,” Gallagher says, especially given Channel 4’s own inexperience with the model.

Development started on the new system, named Stellar, in 2001. Channel 4’s sales team adopted it 18 months later in 2003. Since its launch, the Stellar system has not only helped the sales team sell more on-air adverts, Gallagher claims, but it has also cut the company’s software maintenance bill. “The [old] application ran on some fairly hefty hardware and there were some quite expensive services deals around it,” he remarks. “So there were some big benefits in moving on to newer platforms and cheaper support.” A year after deploying Stellar, Channel 4 said it had saved approximately £3 million.

Channel 4’s IT team consists of around 60 employees. By outsourcing much of the day- to-day maintenance and support functions to third parties, the broadcaster is able to concentrate its modest internal skills on innovation rather than fire-fighting. “We’ve been able to take our expertise and focus it on new products,” says Gallagher. “The focus of Channel 4 over the past two or three years has been on putting our content on-demand, particularly through 4oD on” He adds that outsourcing has made the company “quicker to market”, with new features for these platforms.

Gallagher believes that the key to Channel 4’s successful offshoring experience has been the strong communication it maintains with NIIT. The Indian company’s employees are brought on site in rotation, which helps them to become familiar with the way Channel 4 operates. “They’ve now developed a deep understanding of our industry,” Gallagher says. Gallagher’s internal team also keep in close contact with their Indian counterparts through teleconferencing.

The decade-long relationship between Channel 4 and NIIT has not been without its “ups and downs”, Gallagher admits. This to be expected though, he adds, advising that close cooperation between supplier and customer is essential to a positive outcome in an outsourced project. “As with any outsourcing deal, it’s only as good as the people who are working on it and your relationship at the time,” Gallagher concludes. “So you have to keep managing carefully, and keep working closely together.”

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

Related Topics