That advice unfortunately became a reality with evidence from various studies showing every Games, without exception, has experienced cost overruns. Defining what should be included in Olympic Games costs is not without difficulty.
Tuesday, September 08, 2015
To Bid or Not to Bid, Why we must Reduce Time and Compress Costs for Major Events
That advice unfortunately became a reality with evidence from various studies showing every Games, without exception, has experienced cost overruns. Defining what should be included in Olympic Games costs is not without difficulty.
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I found this article less a mixed bag. On one hand, it was a look at the needs of massively scaled performance, authored by an industry professional. On the other, it seemed to be a plug for the 360DIRECT software. The article starts off with a relatively straightforward look at the massive costs and management needs of such large-scale events. All the most common cost-related problems are briefly outlined, such as the difficulty in accurately predicting event costs and other such issues faced by funding committees in hosting cities. Services that cost consultants are expected to provide are also touched on. However, this is just before the article seems to take a turn for the abruptly commercial. Tim Jacobs, the author and himself an Olympic cost consultant, begins to name-drop a managing software, 360DIRECT, with no prior lead-up to the respective qualities of said software, as opposed to any other software. This doesn't jeopardize Jacob's previous points which are valid enough, but makes me wary of how commercially motivated his other points may be.
Just as the creative directors who work tirelessly to creative a stunning, aesthetically pleasing Olympic Games year after year, those who "punch numbers," so to speak, operative in an equally creative manner, finding solutions to problems and find ways to restrict the costs of one factor to meet the financial demands of another. One of the main problems that appears over and over again in the article is the infamous bidding for the Olympics, which so often lead to headaches down the road as the predicted budget turns out to be nowhere near the actual when the author gets his hands on the numbers. What is reassuring to note are the changes being implemented in 2020, as the concerns surrounds the bidding issues are finally being addressed.
I was really into this article because I was attracted to the title, not because I thought it was an advertisement for a cost management software, but it's good to be educated on that product I guess? If anything I definitely didn't know that "professional cost managers" existed in the first place so that's definitely a big step. Also, while I definitely knew that the Olympics were a massive undertaking for a city, I guess I really hadn't considered the list of factors that would be involved. I also can't imagine how difficult it is to take a project like that on for the first time, and I'm glad that there are organizations that specialize in the financials of Olympics planning (and hopefully every other aspect beyond financials), because just the thought of having to be involved in such a massive project gives me a headache. I can only imagine how exciting yet challenging it must be.
I think this example can also apply to many theatre endeavors we see fail financially in our industry. Just as a city bids to host the olympics, theater companies and producers buy rights to shows and produce them. Although the olympics are on a much greater scale, I think both examples get across the same message: risk analysis and management are crucial for any company. In the past, the olympic cities have put in bids without considering what the implications would be. Cities would put tons of money into building proper arenas and hiring enough staff to run the olympics without thinking about what their return on investment would ultimately be. While I am sure some cities recoup their investment, many others do not. This is the exact same case with theater companies and producing companies. Another point worth noting is that many olympic hosts do not consider what their costs will be once their city's olympics are over. If cities do not build temporary arenas, they are now left with huge venues that require maintenance and often go unused once the olympics are completed. This can also be applied to a theatre, as many companies and organizations put up their productions and end up throwing the materials used to create their productions in the trash. If both the olympics and theatre organizations could find a way to reuse their venues and materials after the life of the "production," perhaps this would significantly lower the risk of losing money.
I did not realize until the end that was an advertisement. I don't think I had been aware of the financial ruin that follows the Olympics until the Sochi Olympics in 2014. I read tons of articles while that was happening about how every city that hosts the Olympics spends decades recovering. I'm amazed that at this point cities are still striving to be have that "honor." This software seems like it could help with some monetary problems that follow but that really depends on whether or not it actually delivers. Their website looks like it still might be in the beta phase. They have a lot of energetic words that try to distract you from the fact that nowhere does it really explain what the program is or how it works. Nonetheless if the software does what they are claiming, then it might put a lot of consultants out of work.
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