The sports industry is enormous, growing fast and everyone wants a piece of the action.
Whether it is in sponsorship, supplying sports equipment, merchandising, broadcasting, new media or providing the 'official beer' for a sport, the layers of business surrounding the action on the pitch, court, track or pool are astonishing.
Martin Sorrell, head of global communications giant, WPP, always highlights global sporting events in his annual report as an indicator of how successful a year the company will have. He thinks 2006 will be a bonanza given that it will see both the Winter Olympics – which took place in Turin – and the FIFA World Cup that starts this month in Germany. Looking ahead he says 2008 will be “a blockbuster” for business with the Beijing Olympics and the European Football Championships in Austria and Switzerland.
Professional sports organisations are like any other business. They need success, profit and rely on IT to help them achieve their business objectives. Of course, global sports organisations and brands like FIFA, the International Olympic Committee and the PGA could not run their events without massive IT investments, but smaller groups need it too.
This year’s FIFA World Cup will be beamed to 30 billion people and it expects to host three million visitors at the event. Try doing that without an effective, secure IT infrastructure. Similarly, smaller clubs and organisations, like the Heart of Midlothian Football Club, which has just implemented an enterprise-wide CRM venue management system to streamline its business processes, are relying on IT to help them succeed.
Although there are similarities in the sports industry to other business sectors, the sports themselves are different, because they rely on events. Whether it is Wimbledon, the FIFA World Cup or Ascot, they all have competitions at their core. The action takes place on a specific day and their IT strategies reflect this.
The Avaya team planning the voice and data network for this year’s FIFA World Cup sat down to begin planning in 2003. With four weeks to go, the infrastructure is still at the installation stage and the IT teams will be working right up to and during the event to make sure everything comes together. The IT team at Wimbledon takes part in constant IT strategic planning meetings and undergoes a stringent test months before the event.
The immovable deadlines are important to peripheral businesses too. For retail companies like Kitbag, who sell on the back of sporting events, as well as seasonal trends like Christmas, timing is critical. If a supply chain system goes down just as sales are ramping up for a global competition, losses could be huge.
Around 45 companies have been granted licences by the English Football Association to label their goods as official England products in the run-up to the FIFA World Cup.
Back in 2002 retail sales of these products was £26.5 million and in 2004, the year the last European Championship ran, they reached £55m, so meeting the demand for these goods has to be spot on. This year is set to be even more lucrative, with Umbro, which supplies official kit, expecting sales up by 20 per cent.
The sports industry relies on mission critical events management. The CIOs involved in the sports industry know, particularly in the glare of the global publicity that surrounds them, that nothing must fail. The FIFA World Cup network has an amazing 16 layers of redundancy built into it, to make sure nothing goes down which could affect the progress of the event. Of course, high-profile sporting events are a great target for hackers and terrorist attacks. The events reflect that with seemingly over-the-top security. Accreditation systems for the big events are now very rigorous and at the systems level, securing networks has become essential.
Crime also has to be considered, so for the first time, FIFA will use tickets that have RFID strips to prevent theft and fraud at the event.
Getting the security and mission critical IT requirements right, while at the same time protecting the organisation’s brand, is a constant balancing act for CIOs in the sports industry. They must continually look to technological innovation to meet the organisation’s objectives, increase returns and maintain their brand in the market.
At the same time they must ensure that nothing could jeopardise the running of the event – all with millions watching the their every move.
- Headquarters: Geneva
- Number of employees: Not available
- Last full-year revenues: CHF 874,000,000 (£38,381,1206)
- Head of IT: Michael Kelly
Imagine being responsible for the happiness of more than 30 billion people around the planet. Well, not directly of course, but certainly in charge of the IT infrastructure that provides them with the information that might make them happy if their team wins.
Developing, building and running the technology infrastructure of the 2006 FIFA World Cup, which takes place in June, is a massive undertaking. The vast event will be pushing the technological boundaries like never before, with more people watching at the matches, more hours of TV broadcasts and new media content pushed out to mobiles and the internet. Over the last four World Cup events, IT has grown in importance, supporting both the user and customers.
Michael Kelly, head of IT solutions at FIFA knows the requirements of the highly varied set of FIFA network locations requires business flexibility and creativity.
The games take place in 12 stadiums across Germany, but the network is far larger, comprising the on-site offices of FIFA and Local Organising Committee (LOC), VIP area, media sites and the accreditation centres. There are also three large LOC headquarters at sites in Frankfurt and Munich, FIFA’s local headquarters in Berlin, and international control centre in Munich, a FIFA datacentre in Bamberg and FIFA’s main headquarters in Geneva.
It also needed secure redundant connections to the Yahoo! datacentres that host the official FIFA website. “Each of these venue locations has its own unique logistical space and technical footprint,” says Kelly. “The venues cover the gamut from brand new construction with no in-place infrastructure, to existing locations with severe cabling limitations.”
Convergence communications expert, Avaya, with its partner Extreme Networks, is providing secure communications with the largest converged voice and data network ever used for a sporting event. As one of FIFA’s four technology partners, it will be handling the RFID ticketing system, which has never been used before, as well as the pitch-side wired and wireless networks for the sports media. It also deals with the accreditation network, logistics management for the teams, match statistics and information for FIFAworldcup.com and TV broadcasters.
Doug Gardner, managing director of FIFA World Cup’s technical programme says FIFA’s set of high-impact communications will enable it to focus on its core business – the football. “The real challenge of working on the FIFA World Cup lies in the dynamic requirements of the event and the immovable deadline,” he says.
The 2002 FIFA World Cup was broadcast to 213 countries with over 41,000 hours of dedicated programming over the four weeks.
The 2006 event will be even bigger and also have the additional challenge of the brand new RFID ticketing system and providing more content than ever for mobiles and the internet. FIFA learns from each event and changes its requirements accordingly, says Gardner.
At the last World Cup it became clear that the press no longer need large press centres at each stadium. If they are not at the game itself, then they can work from their hotel rooms, because they can get the statistics and other information from the internet and file their stories from wireless laptops. Consequently FIFA has made more press information available on its official website rather than the client server system provided at press centres.
Another area that has changed enormously are the facilities needed by the photographers. In the 1998 FIFA World Cup in France all the photographers used to file the old-fashioned way, now all of them use digital technology and are able to file pictures of the action 10-20 seconds after it has happened.
The accreditation system has also been speeded up. At the last event each accreditation took about 25 minutes, now it has been reduced to 15, though security has been stepped up.
The FIFA network is now expected to handle more than 15 trillion bytes of voice and data traffic – the equivalent of sending the content of 100 million books over the internet.
- Headquarters: Ilkeston, Derby
- Number of employees: 100
- Turnover: Not available
- Head of IT: Chris Gibson, managing director
Kitbag is expecting a busy summer as demand for sports kit to support teams playing in the FIFA World Cup crescendos in June. As one of Europe’s leading multi-platform sports retailers, Kitbag provides licensed international and domestic kits, replica and retro shirts, leisure wear, sports souvenirs and videos.
Chris Gibson, managing director of Kitbag believes the World Cup will be the busiest time in Kitbag’s history but is confident of meeting demand. “The last World Cup gave us a tremendous insight into the global reach and support for the tournament, in particular for the England team. This has helped us prepare and select products this time around.”
Kitbag’s IT management systems are all developed in-house and based on Microsoft Architect. This includes its warehouse management systems, company intranet, despatch systems and Kitbag’s customer call centre.
“We build these internally as it gives us the freedom and flexibility to develop and deploy functionality quickly and ahead of the competition,” says Gibson.
“Kitbag’s priorities for the year are to continue rapid growth in sales, while providing exceptional levels of customer service.”
Kitbag will be using technology to ensure a customer from anywhere in the world sees the Kitbag product priced in the correct currency, with shipping options and marketing offers dependent on their particular location.
“These technological developments will help provide a tailored service for each customer, further enhancing the Kitbag customer experience and improving the conversion to order,” says Gibson. “Kitbag continually evaluates technical innovations and emerging standards to see where we can use them for business benefit. Our internal software development team ensures that we stay ahead of our competitors and provide our customers with the best possible experience.”
With the World Cup expected to generate a massive 30 billion TV audience and more than three million supporters going to the games, demand for team supporters’ kit is expected to be high but forecasting exact supply chain requirements is a difficult task, says Gibson.
“It is extremely hard to forecast demand, particularly because many products are ordered before some teams have qualified for the tournament,” he says.
“For example, who would have predicted Greece would win Euro 2004 and Holland would not qualify for the World Cup in 2002?
“However, this is Kitbag’s third World Cup and we have a very experienced buying team forecasting the winning products and player icons for personalised shirt printing.”
The online business promises next-day UK delivery or two to three days for addresses worldwide, so supply chain management is critical, as is maintaining stock levels.
“The England Home and Away shirts have been phenomenally popular and at present we are maintaining the appropriate level of stock on all our leading World Cup products,” says Gibson.
“Planning and attention to supply chain detail and the warehouse management system are essential,” he says.
“The products are ordered months in advance of the tournament according to our forecasts. Items personalised for a particular player are printed to order so player popularity will not create a stock issue.”
In any case if a team does crash out of the tournament early, qualifiers for the next tournament begins later this year, so Kitbag is confident of being able to manage its supply.
“For example, the recently launched England Away shirt will be available for two years and a new home shirt isn’t due until early next year,” says Gibson.
“With the Euro 2008 qualifiers coming up later this year excess stock shouldn’t be a problem. In any case, Kitbag is confident England will have a successful tournament.”
Sports Industry Group
- Headquarters: London
- Number of employees: 18,000
- Turnover: £1.2m
- Head of IT: Nick Keller, chairman
Nick Keller launched the Sports Industry Awards in 2001 after spotting a gap in the market. It celebrates and rewards commercial excellence in sport. After its most recent event, which 1,150 people attended, the Observer dubbed it the ‘Oscars of Sport’.
The brand is developing very fast – one year ago it was a single awards event – now there are a number of events including seminars, lectures and business breaks.
The group has just launched a quarterly magazine that profiles the people behind commercial sport. Later in the year it will be holding the FT Sports Summit in London.
Although he has a small team, Keller believes an up-to-date IT infrastructure is important to the future growth of the Sports Industry Group.
It uses Sage and Microsoft Office with Access infrastructure, but has recently updated the email management system, which Keller believes is fundamental to the group’s growth.
“Email is a very powerful marketing tool for us,” he says. “We send out 7,500 emailed newsletters to our contacts and it gives us really strong messaging. We have managed to take control of our marketing using email. It is an awesome tool.”
Keller says the company realised how important it is to get its email technology working effectively because of an incident that happened in 2004, a week before the Sports Industry Awards event.
The system was infected by a virus, which it then inadvertently sent on to more than 100,000 people over a weekend. It sent a further 600,000 emails and the whole system was down for 48 hours a couple of days before the most important event in its year. “It taught us some important lessons about technology and prompted us to completely update our whole approach to email and software,” he says.
Brand new launch
Moving forward the Sports Industry Group is launching new brands and other business models on to its event brand.
“Sports organisations are like any others, they want success and profit. Football clubs, sports clothing companies and events organisers are all based on the same fundamentals,” Keller says.
As part of this drive the group has a rapidly expanding database and is supporting its new publications online as well as in print. “Growth is very fast,” says Keller. “We want to maintain that and support it with controlled IT expansion.”
The group includes a number of different entities, including Benchmark Sport, a sports business agency that handles branding, sponsorship and PR for a number of sports people. Keller believes it is important that there is a consistent technology infrastructure for future business growth.
With such a heavy reliance on email marketing, he will be looking at CRM and reviewing the database for long-term growth. “We are having to crank things up IT-wise as we continue to grow and have to consider using more database tools or maybe look at a redesign.”
The sports business is fascinating, according to Keller, because it is so multi-faceted: “How many different businesses exist within the sports industry? Hospitality, kit, tickets, beer, balls, referees and events – it is mind boggling. There are so many layers within the industry,” he says.
At the top level of sport, successful players have to draw on all the attributes of the environment and use them to achieve victory.
Keller says: “Using technology in this business is the same. If you want to continue to grow the business and brand, you have to draw on every resource around you. For a small company like ours, we will use it where it can help us maintain our growth and capitalise on our success.”