ICT, Media and Entertainment

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ICT, Media and Entertainment Industry Overview

In an industry that is constantly changing, media and entertainment enterprises are facing the need to embrace new technologies. Inefficient spend management and difficulties in contract negotiation are some of the procurement challenges these companies face. With the increased need to improve cost savings, procurement managers must develop mature supply chain and risk management processes that are capable of rapid yet cost-effective adaptations. With an aim to enhance visibility across the supply chain, our sourcing and procurement market intelligence solutions identify key stakeholders, analyze the import and export scenario across key trading countries, and offer procurement market intelligence and category-specific insights that will help buyers make informed procurement decisions.

Sectors Covered

IT Hardware

With rapid technological advancements challenging the tried-and-true business models, IT hardware companies are facing the constant need for large capital investments, which demand new sourcing and procurement strategies to mitigate supply chain risks. With a detailed analysis of our clients’ requirements, we at SpendEdge identify supply chain risks and offer strategic insights that will help sourcing specialists save millions on direct and indirect spend. We also identify cost elements and develop a quantitative cost model that will help enterprises select efficient suppliers across various geographies.

IT Services

Though intense competition from the increasing number of tech companies poses a major threat to enterprises in the IT services sector, identifying able suppliers and reducing costs or improving cost savings continues to be a major challenge. By considering different weighted variables and identifying efficient suppliers in various categories, SpendEdge’s procurement market intelligence specialists offer actionable intelligence solutions that will help purchase decision makers minimize overall costs and reduce their supplier management costs.

Media

With constantly changing customer preferences and the emergence of innovative technologies, media and entertainment companies are faced with the constant need to source advanced technologies to gain a competitive edge over their rivals. By employing experts in the industry, we offer actionable procurement market intelligence insights that will help clients realize the risks involved in sourcing equipment from suppliers and identify cost-efficient procurement opportunities.

Direct and Indirect Spend Categories

Direct Materials

  • Storage
  • Security
  • Networking
  • Capital machinery and equipment
  • Outsourced manufacturing services (EMS/ODM)
  • LEDs
  • Conductors
  • Microchips
  • PCB assembly
  • Opto-mechanics
  • Peripherals
  • Scanners
  • Galvos

Direct Materials

  • Power supplies
  • Optoelectronics
  • Electro-mechanical components
  • Electronics (customized and off-the-shelf components)
  • SoC
  • ICs
  • RAM
  • Wi-Fi
  • Silicon
  • Wires and cables
  • Recruitment
  • Staffing

Indirect Spend

  • Facility management services
  • Facility equipment and supplies
  • Corporate services
  • Professional services
  • Marketing
  • Travel and entertainment
  • Telecom and networking
  • IT services
  • Office supplies and equipment
  • Computers and peripherals
  • Logistics and transportation
  • Utilities

Trusted by Industry Experts

We gain access to all the latest industry news, supplier updates and innovation landscape too, in addition to the research reports. Our category managers used to go through large sets of information sources to track these news items. With the help of SpendEdge’s tool, we gain direct access to news articles that are only relevant to the procurement landscape, hence saving us a lot of time.

Director

Global Procurement, Leading ICT Firm

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COVID-19 Impact on the ICT, Media and Entertainment Industries

The pandemic situation has adversely impacted shipments across ICT verticals, with most industry players forecasting a 5% to 30% impact on their yearly shipments. The software and services sector has seen a reduction in demand as buyers put their spend on hold. Communication service operations are also affected by the global lockdown and the consequent shortage of on-premises human resources. Indirect impacts on the global ICT industry include a reduction in demand and a shortage of human resources.

Procurement and Supply chain disruptions?

Sub-segments of the ICT ecosystem will need to navigate important changes and disruptions in the short term because of the deepening coronavirus impact. SpendEdge presents a quick dashboard that summarizes the impact on the ICT industry so far and what to expect in the global ICT ecosystem for the next 2-3 months.

ICT, Media and Entertainment Impact Analysis: Key Insights

The COVID-19 outbreak is having a substantial impact on the ICT industry. It has leading to a massive shutdown of equipment and raw material manufacturing units. Other impacts include the following:

  • The software and services sector has seen a reduction in demand as buyers save their money for essential purchases.
  • Communication service operations are also affected by the global lockdown situation and the shortage of on-premises human resources.
  • Business meetings and conferences have been cancelled – some of them vital for partnership opportunities within various telecommunication companies.

However, this period has also brought new opportunities for the ICT industry, such as:

  • Companies are hurrying to upgrade their systems in a bid to facilitate remote working for business continuity.
  • The number of teleconferences has increased exponentially as the majority of people are working from home.
  • Telehealth companies are also upgrading their infrastructure to provide seamless remote consultations.
  • There has been increased deployment of multiple supportive technologies such as 5G.

ICT, Media and Entertainment Demand-Supply Trends

The overall ICT industry has seen a fall in demand as new spend has been frozen and budgets are being reprioritized to fight the global lockdown caused by the coronavirus. The situation is expected to continue for the next 2-to-3 months, and buyers will be wary to commit to big-ticket spend in a recession-like period.

There is a clear bottleneck in the supply of communication devices and IT hardware due to diminished production in China and the restriction of cross-border shipment movements. Even existing shipments are stranded at various locations scattered across the globe. Local distribution hubs are also facing massive transportation delays for outgoing and incoming shipments.

    Telecommunications Sector

    • As the world moves to remote and home working to adapt to the coronavirus impact, demand for supportive hardware and technologies such as 5G has seen an unprecedented rise. On the flip slide, demand for other communication platforms such as office secure lines has fallen.
    • Global suppliers are facing supply-side bottlenecks for telecom equipment, as raw material vendors and equipment suppliers in Chinese tech hubs are unable to meet their production plans.
    • The improving COVID-19 situation in China will help tackle some of the supply-side bottlenecks, but the global distribution hubs will still be a choking point for some time.
    • There will be an increase in costs associated with compliance and security protocols for suppliers.
      Such costs will eventually be passed on to buyers in the form of higher
      service charges.

    IT Hardware- and Software-Based Services Sector

    • Demand for generalized IT hardware is likely to face pressure due to economic slowdowns and shutdowns within key economies. IT hardware that can support 5G-related services is set to see an increase in demand spurred by remote and home office requirements.
    • The rise in healthcare R&D initiatives as well as heightened healthcare operations are demanding the support of specialized IT hardware and software services in the wake of the worsening coronavirus pandemic.
    • Hardware suppliers are facing acute distribution bottlenecks and transportation shutdowns in multiple geographies. This is adding up to their overall logistics cost, and could be passed on to buyers in the form of increased prices.
    • There has been a surge in usage of remote conferencing and demand for technologies to facilitate remote working. Some remote working software licenses were facing a delay of 2-5 days for new activations. However, the situation has stabilized and demand is expected to hit a plateau.

    Media Sector

    • Due to the global lockdown, the majority of advertisers have paused their advertisement spending. As an example, a recent study has indicated that 46% of advertisers have reduced their advertising budgets for the first half of the year.
    • However, there is still relatively stable demand for digital advertising platforms from buyers across multiple countries. Consequently, suppliers are shifting more to the creation of digital campaigns with a special focus on social media platforms.
    • OTC healthcare, insurance, and essential consumer product segments have increased their advertising activities and are planning innovative campaigns that tie in the coronavirus with their product or service. This is creating substantial demand for the television and digital advertising industry.
    • Subscription platforms such as Amazon Prime and Netflix have seen a surge in new accounts and usage as a direct benefit from global lockdowns and consumers working from home.

    Risk Mitigation Activities to Address the Coronavirus Impact on the ICT Industry

    The overall ICT industry has seen a reduction in demand as new spend has been frozen and budgets are being reprioritized to fight the global lockdown caused by the coronavirus impact. The situation is expected to continue for the next 2-to-3 months, as buyers are wary about committing to large purchases during a recession-like period.

    There is a clear bottleneck with respect to supply of communication devices and IT hardware due to diminished production in China, and restriction on cross-border shipment movements. Even existing shipments are stranded at various locations across the globe. Local distribution hubs are also facing massive transportation delays for outgoing as well as incoming shipments.

      Alternative Suppliers

      Develop relationships with vendors from countries that have a lower count of COVID-related cases or are still working in a relatively normal environment.  However, buyers must also be aware of increased prices in these geographical regions due to increase in demand for various IT-based solutions.

      Holistic Risk-Mitigation Plan

      It is not enough to only look at production centers: ICT buyers must evaluate logistics-related risks associated with the delivery of ICT essentials and develop a procurement strategy accordingly.

      Global Sourcing Strategy

      For ICT buyers, it can be beneficial to create a global procurement strategy to negate any bottlenecks associated with a specific geographical location. Such a step is recommended given the global lockdown scenario due to the coronavirus.

      Round-The-Clock Monitoring

      Buyers need to be up to date on global developments as well as country-specific trends. The lockdown situation can change suddenly in locations that are of importance from a supply chain perspective. Buyers also need to monitor emerging success case studies and learn from them.

      Revisiting Contract Terms

      Global commodity and energy prices are expected to behave in a very volatile manner for some time. Companies that spend significantly on commodities and energy items as key inputs need to re-engage their suppliers and explore mechanisms to safeguard against increases in pricing. It is advisable to fix the short-term procurement price or at least keep a maximum limit on upward price movements.

      Ensuring Shipment Visibility

      Supply chain disruptions have created logjams at cargo hubs and warehouse facilities. It is expected that shipments will remain stuck at various places for an unknown duration and massive delays will occur in the entire supply chain. It is imperative that software solutions being used for supply chain management, inventory, warehousing, and shipment tracking are updated regularly. Complete visibility and accurate communication in the supply chain is important for drawing alternative plans and minimizing the loss of shipments in transit.

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