Business Process Model and Strategic Analysis

 

CC Music- A comprehensive business model 

Case Scenario- An introduction  

Chris and Clive, the two sessional musician who recently retired from their teaching service would like to carry a complete business platform for promoting music bands across United Kingdom and may in near future in other parts of the world. They have been promoting a Northern Soul Band over a long period of time. Both have been managing their studio work, events, parties, TV and radio programs apart from playing with the band. Starting from booking for appoints to receiving contract pay cheque from clients, these two look after each and every aspects successfully which is why the band is getting at least 12 gigs in a year. Few other bands have requested them to handle their band by offering fees.
Chris and Clive seemed this as an opportunity to start a music agency that will carry out CRM and other business setting for the bands opting to give their charge to them. They need it to start as SME style with equal voting on business decision. They would like to carry this business out with advance and appropriate technology. [Corporate Comupter Service. (2018)]
As a consultant to CC music, it is my duty to advise them about the appropriate business model or approach they should follow so that they can run this business successfully in a long run. 

Approach to business solutions 

Before I provide any solutions to CC music, it is important for me to understand their existing business approach. The existing business scaling is essential in order to identify the gaps that can be filed in new business set up. I will also go through SWOT, PESTEL and Competitive model (5 force) for CC music so that it will help me to identify right solutions. This report ends with the recommendations that I am going to give to CC business. 

Part-A- Business Process Model and Strategic Analysis 

Existing Business Approach of CC Music-
The above flow chart is showing how CC music is working with The Northern Soul Band over these years. Chris and Clive has been following a very simplistic and single line business approach to deal with clients. Daisyme, e. (2016, July 15)
Analysis of current business model
In this business model, we can identify that technology has not used to that extend, it should be used in today’s date. For treating more bands under their agency, they need to adopt new technology in their business process. If we put a close look at the business process then, we can find many outdated or inadequate approach to client service. These can be drawn as-
1.    CC music is not being promoted in any other channel apart from website promotion. 
2.    CC Music is taking orders over phone only and not in any other channel. 
3.    They are getting deal agreements and payments of cheques through post only. 
4.    The two have to carry out each and every activities for organizing band events both at ground level and also in digital media platforms thus concentration of better client service i.e. band performance is never measured before performance.
5.    They are not taking feedbacks from clients which is why they have to go for promotion every time in anticipation getting new client. 
6.    There is no event management schedule to track down the performances of band. 
The above business model is of course not going to be applicable for CC Music agency as for multiple clients, it will a chaos situation to track down all orders and execute one by one by the two musicians. Waiting for written agreements and payments through post will delay in client service delivery. Without having a feedback system puts the business in dilemma regarding service delivery. [Illangakoon, S. (2010, Novermber 5).]
At first, CC Music needs to implement certain things in business to make it smoother and better for delivering service. These are Customer Relationship Management, Enterprise Resource Planning, e-payment management, order management software, Event Management Technology etc. How these new and up to date Information and Technology System CC Music can use, will discuss later.
Before, we provide the business model, it is important for us to know the business scenario of CC Music. 

SWOT Analysis 

Strength- 
•    Experience of Chris and Clive in band management and music over a period of time.
•    Knowledge of promotion management 
•    Presence in live and digital platforms 
•    Approach from other bands to associate with them. 

Weakness-
•    No technology in use
•    Lack of multiple client handling experience
•    No feedback mechanism
•    No business experience 

Opportunities-
•    Growth in music industry in UK at 9.5%p.a. 
•    Increase in demand of live music and online music.
•    Availability of music technology and event management concept.
•    Increase in music platforms across digital and social media for all age groups. 

Threats-
•    Increase in number of competitive firms especially bigger brands like PRS for music, PPL, BASCA etc.
•    Band’s own promotion and arrangements through social platforms. 
•    Seasonal demand for bands to perform.
•    Lack of financial and resources support.  

Music industry is not typically a business industry like other sectors. But, with the change in time this industry has also commercialized. Now a musician or music composer, singer, band artist etc. all are taken as profession like doctors and engineering. The increase in demand for music has given opportunity for the artists to sell their performance in monetary terms as it’s a part of their profession. CC Music is also a part of this industry which is now aiming to carter other music bands to sell their performance to music lovers against the contractual payment. To set up business model, we have to see the environmental aspects of CC Music thus PESTEL analysis will help to know industry environmental fact. [Key Note. (2010, February).]
Political factors- Licence Act. 2003 for music has been altered since 2003 thus it gave a freedom for live music performance without obtaining license. UK government is promoting music due to its therapy nature. Some concerning factors like noise pollution regulations, venue capacity regulations, contractual regulations and business regulations that can affect CC music. Overall, it seems to be positive for CC Music.
Economic Factor- Music Industry is one of those rare sector where hardly recession strikes. As there is a growth in demand for music and concerts, it is providing scope for many bands to come up with good music and generate revenues from it. This sector is supported by motion pictures, wedding, office annual programs, festivals, TV shows, Talent hunting programs etc. As music band is a source of entertainment in mass, this sector is able to earn million pounds in UK market. There are some concern areas like illegal downloading, piracy etc. which affect this sector. 
Social Factor- Social factor has always been positive with music industry as music is not only for entertainment, it is now a days acceptable as therapy for anxiety, hypertension, stress etc. Whether it’s Easter, Christmas or New Year eve or a wedding ceremony or celebrating joy in sports, UK society has always played music. For a band agency, it is a good opportunity to contact clients to organize such events. 
Technological factor- Technology is now becoming an indispensable part of music. Music taste changes with the passage of time thus for the music fraternity, it is important to bring improvisation in their performance or presentation. With the introduction of new PA system, music software, multi-track recording, loop pedals etc. are some of revolutionary example in music industry. Thus technology is favourable to have such musical agency. 
Environmental factor- Music industry has little impact on environment. The only concerning factor with live band performance is the noise pollution. But these days, solutions are available to deal with this issue.
Legal- Music agency opening doesn’t have any strict legal regulations, the rules and regulations of agency is applicable in this case too. Live music act or music laws of England are some of the key legislation that CC Music will have to follow. 
CC music is not going to be in monopoly situation as other competitors are there in market who have better offerings and scope, thus before CC Music set out for business, it is important to do competitive analysis which we are going to do here below-

Porter’s 5 force Analysis 

Bargaining Power of Supplier 
•    Increase in demand of digital media raising the cost of promotion.
•    High price demand by Band groups.
•    Money constraints lead to sacrifice lower technology 
•    Switching cost of group high.  

Bargaining Power of Customer
•    Multiple music source options available 
•    Cost of switching is low.
•    High volatility in music taste. 

Threat of New Entrant 
•    Code Music Agency, Nova music, ITB etc. are the new players come to market to get good talents for their marketing.
•    Emergence of money offering to bands higher to get their contract for long tenures. 
•    Association with film fraternity and media to acquire clients. 

Threat of Substitutes 
•    Bands are doing own promotion in social media platforms.
•    Rise of online music and TV and radio programs for unlimited period at low cost. 
•    Rise of DJ players in pubs, bars and now a days in other functions as well. 

Threat of Existing players 
•    Existing music agencies and TV and radio promoters who offer lump sum to bands
•    Availability of money and other resources help them to take business from small agencies. 
•    Solo music concerts by established bands are offered by clients and less chance to new bands   

Part-B- New Business Model for CC Music 

Flow Chart 
The above chart is showing the new way to approach clients by CC Music. In this case, the campaigning or promotion will be done in TV, Radio and more specifically in social media platforms like Facebook, Twitter, YouTube etc. For getting enquiry, CC music will use CRM software which will work through cloud network. This will help them to give instant feedback alongside phone calls to explain them better about the service offering. CC Music will send agreement details through their mail account or corporate website link so that they can understand properly and also revert Chris and Clive for negotiation. If they agree on deals, then further process will go but if not, then feedback will be taken from the customers to approach next time. [Bernanke, B. S.,et.al1986]
Payment process 
Flowchart- (for customers and band groups) 
No postal payment system would be there for CC Music now onwards and whole of its transaction will be operated in online platform. At first, CC Music will contact an online payment vendor like PayPal who will receive and credit the corporate bank accounts against the payment received.
Admin of CC Music is the authorised person who will transfer money to the band groups and other suppliers. 

Part-B-2-Technological Requirements 

Database- CC Music needs a strong database where all the information about business will be stored in a secured manner. For ex- Event scheduling, payment details, information about clients both customers and band groups etc. can be done with database. Today there are multiple open source database are available for small scale business. For ex- CC music can go for Microsoft SQL which carries the business intelligence features like- [DeVries, H. (2014, July 29)]
•    Ad hoc analysis
•    Ad hoc query
•    Ad hoc reports generation
•    Data analysis 
•    Budgeting and forecasting 
•    Bench marking and performance matrix. 
As CC music will operate from windows OD, this database will be easier and compatible to carry business.
Event Management Software- As the business is based on event organization by Chris and Clive for various customers thus an event management software is needed to manage scheduling of band groups to avoid any chaos on event dates. Odoo’s open source event application is one of the popular and cost saving approach that will manage entire event planning process for CC music. [Becker, J.et.al 2000]
What can it do for business?
•    Make agendas
•    Sell concert tickets (If it handed by client on specific order)
•    Event scheduling –date and time 
•    E-mail marketing
•    Social media integration
•    Google Analytics Integration 
•    Even sponsor management can be possible. 
Customer Relationship Management- CRM- 
Event management for music bands is an important customer relation concept which starts with finding the right prospects and also ends on taking feedback from customer after performance to think next time. CRM is a complete solution to customer handling that keeps connectivity with clients at each stage of business process. Nimble is one of the low cost CRM that will allow CC music to keep customer contacts in a cloud network with unlimited storage capacity. It comes with the following features like-
•    As you add information to account or dashboard, it will fill up useful data and will guide you that how business can grow by using this information.
•    It is an inclusive social media approach which will send you more information to establish rapport with clients.
•    Nimble allows you to integrate 40 other applications link like sales, customer service, social media, accounting etc. which makes it an efficient business process system. 
•    It also works with mobile so it is an advantage for both owners. 
Payment Process- CC Music needs a quick transaction processing system to execute orders in time. This can be possible online payment system. Chris and Clive were doing all event management work for Northern Soul brand. With the addition of new bands and increase in customer base, it will difficult to look after offline mode payments. Having payment gateway for both payment and receipt will help them to focus on quality of event management service. Zuora is one of the best payment gateway that links virtual terminal/POS with an electronic payment processor. What it offers to you?
•    Store payment profile
•    Manage re-try logic
•    Set up for personalised recurring payment notification
•    Keep a track of credit and recurring payment details and refunds. [Zuora. (2018)]
Communication network- CRM is workable if it has a good communication system installed within the system. Cisco WebEx is one of the popular and effective communication solutions that come with the following feature- [Rivera, A. (2018, February 14)]
•    HD video conferencing with clients
•    File sharing – Contract agreements 
•    Remote tech support
•    Mobile compatibility
•    Feedback module

Budget for Technology Requirement-

Recommendation 

It’s the time for CC Music to go with technology not only in their music but also in their agency. When you are going to serve 12-15 bands with 300-400 customers per year, contacting over phone or receiving payment through post seem to be obsolete idea. Business needs flexibility, agility, security, backups and real time responses. This all will be possible when the agency is going to use these above mentioned business process and required technology. Technology itself is not a solution to meet competitor’s action, it is the use that will help them to stay ahead in race.
Here are some of the ground rules CC music has to follow-
Acceptance use of technology- As two other apart from Chris and Clive are going to join business with equal business decision making, there is a high risk of misuse of technology from any of the person. Before the agency starts, the owners must issue the guidelines for using electronic equipment, software and network so that in future, fraud can be minimised. This can be done with creating backups and unique ID for using CRM and other software. 
Security- Each and every electronic and network must be protected with password. Though the above mentioned software comes with security like denying scrupulous access to network, virus and malware protection, confidentiality and usage of data still, it is the duty of agency to keep these software and network updated time by time to avoid security vulnerability. 
Recovery-   The data stored in database must be kept in a backup file as well so that in case of data destroyed, the data can be recovered without having service delay. 
Technology standard- The above mentioned technological requirements are among the best for small scale business and CC Music should go either with these or even better offers if they can. Sacrificing standard of technology for cost saving is not a good idea.

Conclusion 

CC Music has achieved good responses by associating with Northern Soul Band in recent past. The offering from customers has also expected to reach 14 times in a year. Starting an agency to promote such bands is really a good opportunity to give chance for other bands who can’t afford high price tag with other agencies. With use of latest technology in the manner which is discussed earlier will definitely going to help CC Music to grow in a long run. At present, music agencies have not much direct competitions but in late future, it will intensify as the way life is getting complex, people are finding music and concerts as the source to entertain and cure. So it is the right time to put step in this growing industry. 
 

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References

1.    Corporate Comupter Service. (2018). Retrieved from http://www.corpcomputerservices.com: http://www.corpcomputerservices.com/articles/it-policies-small-business
2.    Daisyme, e. (2016, July 15). Retrieved from www.entrepreneur.com: https://www.entrepreneur.com/article/277666
3.    DeVries, H. (2014, July 29). Retrieved from www.forbes.com: https://www.forbes.com/sites/henrydevries/2014/07/29/what-is-the-best-database-for-a-small-business/#473901276ad1
4.    Illangakoon, S. (2010, Novermber 5). Retrieved from http://assignmenthelpseries9.blogspot.in/
5.    Key Note. (2010, February). Retrieved from ajourneyinmusic.files.wordpress.com: https://ajourneyinmusic.files.wordpress.com/2010/11/music-industry-20101.pdf
6.    Rivera, A. (2018, February 14). Retrieved from www.businessnewsdaily.com: https://www.businessnewsdaily.com/6176-communication-tools.html
7.    Roslyn Frenz. (2017, September 26). Retrieved from bizfluent.com: https://bizfluent.com/info-7806091-swot-analysis-music-industry.html
8.    Zuora. (2018). Retrieved from www.zuora.com: https://www.zuora.com/billing-topics/software-payment-gateway/
9.    Becker, J., Rosemann, M., & Von Uthmann, C. (2000). Guidelines of business process modeling. In Business Process Management (pp. 30-49). Springer Berlin Heidelberg.
10.    Havey, M. (2005). Essential business process modeling. " O'Reilly Media, Inc.".
11.    Bernanke, B. S., & Gertler, M. (1986). Agency costs, collateral, and business fluctuations.
 
Part-D-Reflective Journal 
1.    This source helped in understanding the business process in case of small scale concern. What are the present day requirements in a small business regarding technology and how technology can change the landscape of business are discussed here. 
2.    This source talks about the availability of various Customer Management and communication software that are useful to conduct business process smoothly. This helped me to compare the options to find best possible CRM software solution for this music agency.
3.    This article has talked about the various database management solutions available for small business houses that can help to store, retrieve and optimise the data for business purpose. 
4.    This article has talked about competitive force analysis for music industry in UK. How the 5 forces i.e. existing player, new entrant, supplier and customer bargaining and substitute product can affect this music agency. 
5.    This report is about the music industry situation in UK market. This report helped to understand the Political, Economic, Social, Environmental, Legal and Technology situation that can impact CC Music agency. 
6.    This report helped me to identify right communication network and tool which can be applied alongside CRM to have constant communication with client without delaying service.
7.    This resource talks about how music agency can use their strengths to catch opportunity and face threats and using opportunity it can minimise threat and weaknesses. This helped me to construct SWOT for CC Music.
8.    This website tells about the utility of using Zuoro payment gateway can solve the payment and receipt issues that agency may face with multiple client base. 
9.    This report helped me to draw flowcharts for CC Music business in both scenario i.e. existing business model and upcoming business model with use of technology. It helped me to minimise the complexity in graphical presentation. 
10.    What are the factors that must be considered while setting business model, this source helped to answer this for CC Music. 
11.    This source helped to set budget for an agency which is cost-effective and useful to modern day business scenario.  

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