Interview with Andreas Cüppers, Head of Digital Transformation at Borussia Mönchengladbach
The recent model of clubs relying on video rights, player trade and ticketing has taken a serious hit in the current world. Clubs have been obliged to look beyond those traditional sources of income and digital transformation has become key for football clubs, as it allows them to grow at a fast pace in certain areas and it opens the door to new revenue streams. Digital covers a wide range of activities, from engaging with fans to improving internal processes or enhancing sports performances. So what does digital transformation mean for football clubs?
In this first article of our new series “Digital Transformation in Football Clubs”, We have interviewed Andreas Cüppers, Head of Digital Transformation & Innovation at Borussia Mönchengladbach, one of the top german football club in the Bundesliga that participated for the first time of its history to the UEFA Champions League knockout-stage this year. We asked him how he is handling the digital transformation in its football club, what are the best practices and the right attitude to have in order to carry out this long term work.
INTRODUCTION TO A CLUB DIGITALISATION PROCESS
When talking about digital transformation for a football club, what comes to your mind first? For you what are the key pillars of an efficient digital transformation?
In general digital transformation covers two areas: external processes that have a lot to with the fan experience and internal processes where we try to simplify or accelerate things that partially have been established many years ago. In both areas we look at how digital technologies can be helpful for us to improve these processes. And only if it makes sense we will implement innovations and technologies. But talking about the technical side is only one aspect.
One key pillar is also the mindset, the cultural change. By investing even a lot of money in the right technologies you don’t transform your business holistically. You also need to enable the people to use these technologies. You need to emphasize the benefit of innovations. You need to encourage your colleagues to challenge things and to be ready for a change. You need to collaborate in a totally new way. And everyone must understand it and live it. Otherwise you will fail in your digital transformation.
To better succeed in your digital transformation, you should start by elaborating a strategy. How do you proceed? What subjects do you tackle first?
Everything starts with a vision, a very abstract goal you want to achieve in the future. Although you may never reach that goal, because it’s very exaggerated (or too bold), it helps everyone in your organisation a lot to better understand what you want and why you want that. When you have that vision you check the status quo intensively. By that you get a better understanding of what is necessary to achieve your goals. With that you can work on the operational side. There, it is very important to get your measures in the right order. Therefore you need to underline how things depend on each other and that it does not make any sense to do the third before the first step. In the end you should be able to create your personal roadmap, because you defined your goal and you verified the starting point.
What are the initial investments a club should make prior to starting its digitalization (analysis, workforce, knowledge, infrastructure)? What was yours at Mönchengladbach?
That might be different from club to club and depends on your status quo. In our case we noticed pretty early that we are heavily depending on investing in infrastructure. So that was and is the point where we have initial investments. Our stadium was built in 2004. To implement new technologies, to improve the fan experience, we are of course talking about infrastructural investments in things like connectivity, digital signage or state-of-the-art access control systems.
DIGITAL TRANSFORMATION: THE REWARDS
Nowadays, football is much more complex than it used to be. Training, scouting and injury prevention have evolved significantly thanks to new technologies and the use of data. How do you see digital tools and digital transformation in the sports performance space? How does it impact your sport performance team and the training center on a daily basis? What are your best practices?
Of course digital technologies have a strong impact on the sports performance space. In a competition where nuances might decide whether you win or lose a match, you try everything you can to increase the probability that you win. You use new technologies to control the players’ performance on the pitch to find the right intensity for individual training. You use video analysis for preparing matches in the best possible way. On the other hand you use technologies to minimize risks you need to take when you want to sign a new player. In these times, where you need to spend 10 or more million euros to get a player, you of course want to know everything you can know about him. And new technologies, especially a lot of data, helps you to evaluate whether he’s worth the money or not.
A football club is a structure with different business units working on different missions. We know as well that innovation is highly related to internal culture and a process of “acculturation” from colleagues within the organisation. How does digital help you to improve internal processes? And how does it allow you to better communicate and synchronise your activities?
That’s definitely an important point. Like I pointed out before the cultural change in the organisation is essential for a digital transformation. Therefore we are very much focusing on how digital helps us improve internal processes. The global use of Microsoft Office 365 with Teams as a central collaborating tool is only one example of how we proceed in that area. We try to destroy the silos in which some departments are still working and thinking. We create teams that work on different projects and that come from different departments to encourage colleagues to think out of the box. A football club is not a big company where it’s nearly impossible to work closely together with all employees. We take care that we create a good working atmosphere and that we enable people by using digital technologies to get their work done either faster or easier than before. That helps to change the mindset.
From a business point of view, a football club traditionally relies on media rights, players’ transfers income, sponsoring, ticketing and merchandising. How does digital transformation enable you to sustain and increase these revenue streams? And how does it help you in creating new revenue streams?
It’s both. We’re totally convinced that digital helps us increase existing revenue streams. Sponsorships is a pretty good example. Without the digital opportunities our inventory would be limited. We only have limited space on our LED-Boards or Video Screens inside the stadium and we only have limited hospitality offers. In the digital world we don’t have any limits, so we’re able to increase our revenue stream. Merchandising, especially in these challenging times with closed stores since months, is another good example. But you’re also right in saying digital can create new revenue streams for us. That is something a lot of clubs are working on. I believe that exclusive content that you might offer to the fans via a subscription model is one example. Especially for international audiences that might be a relevant point. In collaboration with different partners it should also be possible to create real digital ecosystems in which every stakeholder plays a certain role and benefits in the end.
Revenues are closely linked to your audience and your fans. What are the positive impacts your digital transformation has had on the relationship you have with your fans? With tracking, automated processes, are you afraid of losing a kind of authenticity?
We’re not afraid of losing that, because in every case we focus on how technologies are beneficial for our fans. We don’t implement anything if we are not convinced that it’s useful for our fans. Part of our mission is to know the fan as well as possible. We want to know about his/her needs, wishes, behaviour, etc. And digital technologies play a key role to gain the relevant data that we need. Our job then is to analyse and use these data to personalize or individualize the fan experience in the best way. And the fan is thankful that we take him/her seriously and use digital technologies to improve his/her experience and automatically our relationship to him/her.
Finally, what pieces of advice would you like to give for football clubs or any digital manager who wants to start their digital transformation journey?
We already underlined that a strategy with a clear vision is important and maybe the first thing to do. We also emphasized how essential a cultural change is to create the right mindset. The commitment of your executives is another point that is important to mention. You need the backing of the leaders and you need them as the ones that go ahead to convince all colleagues in the end.