Turning time into money by forecasting production costs
It’s Monday morning and the start of a new work week, and I awake to the sound of hammers—workers installing siding on my house. Looking out my window, I see contractors all around my property, working feverishly to achieve their goal: getting the job done on time, on budget and to my satisfaction.
I am impressed by their coordination. Anyone who has lived through home renovation knows what I am talking about: Every minute of the day, every cent of every dollar, is accounted for. One mishap affects everything else, putting a carefully crafted plan at risk. If time and budget are off, then the project is off, too.
The same is true when I make my way through the bevy of contractors to get to my office, because in the entertainment business, time and money are directly related. Forecasting production costs for each film or television series is serious business.
It’s a strange thing about the film industry: Almost all movies lose money. Except that they don't—not really. Rather, because each film is essentially set up as its own corporation, a very complicated accounting process tracks myriad costs and fees, many paid to one’s own self. Most studios and production companies perform an extremely complicated “spreadsheet shuffle” that sees numbers constantly in flux, requiring constant manual number crunching to keep tabs on everything. Unsurprisingly, this is a laborious, time-consuming process.
Automating the spreadsheet shuffle could produce a number of benefits, including the following:
- Integrated planning and reporting
- Real-time data movement between applications
- Simplified planning and forecasting cycles
- Visibility into headcount, labor and other direct costs
Watch as Dave Higgins, a senior business systems developer at LucasFilm, talks about how he uses IBM Cognos TM1 enterprise planning software for forecasting, planning and analysis—putting an end to reliance on manually operated spreadsheets.
LucasFilm used Cognos TM1 to streamline a wide range of managerial processes, using improved data to enable smarter decisions. Contact IBM to get started enhancing your organization’s budgeting and forecasting processes. Then learn more about how IBM analytics is transforming the media and entertainment business.