Sports Management, a Business Model

Sports management is “a field of education and vocation concerning the business aspect of sport” (Wikipedia)

In terms of a Business Model, as there is very little specific information on the internet, I will base my concepts of a sports management business model on the concepts that were adopted at Servasport Ltd

Servasport is one of the leading providers of internet based sports management systems in this field. Their mission statement is “To be synonymous with best practice within the management of Sport through the use of Information Communication Technology.”

However to be synonymous with the management of Sport with the use of ICT, Servasport must have devised a business model that they deemed viable. I will devise an idea of this business model under 4 separate headings. Infrastructure, Products they Offer, The Target Customer Base and of course Finance and how this would be generated.

Infrastructure

The first part of a companies infrastructure are their core competencies. At Servasport Ltd, their internet based sports management systems rely heavily on the competencies of a wide range of staff. First of all there are varied range of staff

Business of Sport - The company must have a knowledge of the business model behind sports both amateur and professional. Clients may come from an organisation based on funding and sponsorship, or may come from a professional organisation where much of the business behind sport comes from private investors and sales.

Business Development - Many organisations using Servasports bespoke internet sport management systems will be looking at Servasport Ltd as an investment into developing their sport into a larger organisation. For example Cycling Ireland decided to invest in Servasports to help mainly with rider ranking which before the introduction of this system was a difficult task. Now this task has been made easier with a system that removes the need for ranking to be done by hand and increases efficiency.

Finance & Operations - The company depends on knowing how much to invest and how best to carry out their operations

Technology - As Servasport Ltd is a technological solution to sports management a core competency of the company. A wide range of software engineers must integrate the vision of sports people and the clients in order to create a solution.

Servasport does have some partner companies and organisations who have a vested interest into the systems they develop.

Rackspace are a provider of IT Hosting Solutions allowing Servasport to focus on their core competencies of developing the technology and integrating customers needs with innovative solutions.

Products on Offer

Servasport offer a wide range of products that come in the form of modules that can be added to a customers final web applications

Servasport Modules

1. Event Management
2. Document Management
3. Collaborator
4. Members Management
5. NGB Club Management
6. Members Licensing
7. Member Profiling
8. Club Profiling
9. Communication Centre
10. E-Commerce
11. Content Management
12. Club Management
13. Intranet
14. Club Fixtures & Results
15. League, Cup & Blitz Fixture Management

Servasport Applications

1. Association Management
2. Community System
3. Web Network
4. Resource Management
5. Fixtures & Results Management
6. Event Management

Target Customers

The main customer base for Internet based Sports Management systems include sports teams wishing to make the business element of the sport more efficient. Some of the customers of Servasport include

• Basketball Ireland
• Cycling Ireland
• GAA
• Irish Hockey Association
• Basketball SuperLeague
• University of Ulster
• BCSDN
• Athletics Ireland
• Community Games
• EBMAS Ireland
• Queens University

According to Paul Rouse the University of Ulster Sports development Officer such a system would be interesting to customers of clubs where they need to enable consistency and allow new management and officials to quickly adopt and establish roles within the club.

“With new club officials coming in each year, the Servasport Club system enables consistency in our approach and allows the new offi cials to quickly adopt the system and establish themselves in their role”

From this Servasport Brochure

Finance

Finance for Servasport seems to come from Sponsorships that exist at the various customer clubs. Servasport Ltd is a member of the European Sponsorship Association ESA.

To give some idea of the scope of Finance from Sponsorship I have derived figures from the ESA webpage in order to give some insight into how lucrative the sponsorship market can be.

Global Spending on Sponsorship exceeds $30 billion a year.

European companies account for approximately 28% of sponsorship spending in Europe.

Conclusion

Servasport and other Internet based management systems have tapped into a market where efficiency and cost effectiveness is the name of the game. Obviously if they can, for an initial investment develop a system that will ultimately reduce the cost for a sport organisation through the introduction of time saving products they will be able to gain money from the sponsorship that is given to the organisation as their product will be seen as a necessary investment by partners of the company, management and sponsors who wish their money to be spent wisely.

Dementia: A business model approach

“Dementia is defined as the loss of mental processing ability, including communication, abstract thinking, judgment and physical abilities, such that it interferes with daily living.”

(http://www.about-dementia.com)

Figures published by NISRA in 2003 indicate there are over 270,000 people of pensionable age (60+ females, 65+ males) here in Northern Ireland.

(However, Andy notes in his post in 2005 there were 236,300 people aged over 65 in Northern Ireland. Quite a significant decrease)

In Andrew’s post he identified what percentage of these people suffer from dementia as well as what forms of technology are currently available or being developed to help facilitate these people to place less pressure on the health board. I’ll focus on which business models pose most relevance in relation to attempting to integrate the technology developed by COGKNOW into the homes of people that require it. Firstly, in order to make COGKNOW a success in terms of having many if not all dementia suffers utilize the technology upon release, a greater level of awareness needs to be directed at the impact this disease has on peoples lives whether it be directly or indirectly.

After a little searching, I came across some information published by ‘London South Bank University’ which will help us relate how the EHSSB could attempt to roll out technology developed by COGKNOW into Northern Ireland once it has been certified for retail.

Looking at the first business model, it is rather generic in terms of it involving the markets to which a business operates in, what methods it uses to operate and finally the operate of capital it generates or is funded by. Taking into consideration the roll out of the technology developed by COGKNOW into Northern Ireland, the market would potentially be the percentage of how many of the 236,300 people who are aged over 65 that may eventually suffer from dementia. The calculation performed by Andy indicates that there are roughly 2000 dementia suffers here in Northern Ireland which sounds quite low until you remember Northern Ireland only has a population of roughly 1.7 million according to the most recent statistics.

Below is the presentation I found which details business models relevant to the health service.

Open Innovation Buisness Models

Open Innovation: Researching a New Paradigm (Oxford, 2006), Henry Chesbrough states “Open Innovation explicitly incorporates the business model as the source of both value creation and value capture…” Chesbrough demonstrates that because useful knowledge is no longer concentrated in a few large organisations, business leaders must adopt a new, “open” model of innovation. Using this model, companies look outside their boundaries for ideas and intellectual property (IP) they can bring in, as well as license their unutilized home-grown IP to other organizations. In Open Business Models, Chesbrough takes readers to the next step, explaining how to make money in an open innovation environment.

Technology only has value when it is commercialized by means of a business model. The dot-com boom and bust illustrates this concept well, as there was much innovation but relatively few business models that could capture the potential value of the new technologies. According to Chesbrough, a company can capture value from an innovation in the following three ways:

• Using the technology in its existing business
• Licensing the technology to other firms
• Launching a new venture that uses the technology

Given the complexities of products, markets, and the environment in which the company operates, very few individuals, if any, fully understand the organisation’s tasks in their entirety. The business model serves to connect the entrepreneurial inputs to the economic outputs.

I found the following diagrams on a powerpoint slideshow created by Oxford Said Business School for the SSME conference in May 2006 and it nicely describes the differences in IBM business model before and after open innovation was adopted within the company.

Social Networking Business Model

In the most basic sense, a business model is the method of doing business by which a company can sustain itself — that is, generate revenue.

Social networking sites make their money in various ways. Online dating sites such as Udate and Match measure their revenues in 6 figures every month. Monster.com is profitable, in that companies pay to search for potential employees. The fact is that people pay for search when they want quality information.

Facebook still makes most of It’s money from targeted advertising… displaying relevant advertisements to users dependant on their interests. http://www.facebook.com/ads/

However as an additional income generator , you can now purchase “gifts” to send to your friends. This months featured gift is “Fresh Air” at 250,000 units for a price of $1. That’s a lot of one dollars, for something that doesn’t cost them a cent! Even worse there is many young and old that will fork out for this. I guess that’s how they generate at least a portion of their income.

Stanford University have actually created a module to teach students on how to create Facebook applications and how to analyse the information they collect from users. Its big business!

http://venturebeat.com/2007/09/10/facebook-to-take-over-stanford-classroom
Here is a video of Tom Anderson the founder of Myspace, talking about how myspace became successful. Its interesting when he describes initial marketing campaigns weren’t successful and word of mouth added most value to myspace.

Dave McClure in his blog - Master of 500 Hats, has posted an interesting Slideshare of the metrics and business models for a fictitious start up Scottish Pirates. Describing the process of acquiring new users right through to generating revenue.

Business of Social Networks

Found this video on the business of Social Networks quite interesting