Why nasty surprises shouldn’t be part of your agency life

By Michael Collinson, AccountAbility

It’s that time of the month again when you get to review the numbers on all your projects. As the most financially astute Account Director in your agency, I bet you just jumped out of bed ready to meet the day right?

Well most likely not, because ensuring projects are delivered on time and on budget can be an elaborative and exhausting process. Chances are you’ve experienced a conversation similar to this:

Finance person: ‘These jobs are running way, way over estimate on time and it’s impossible now to bill the client for it. Why has this happened?

You: ‘There was serious scope creep on all the jobs. The briefs kept changing, so we were forced to make many changes at the client’s request’

Finance person: ‘We need to know in advance before these cost blowouts happen. If we did, we may have been able to increase the estimate – it’s too late now!’

You: ‘OK, I’ll keep track of resources and costs more closely. (Finance person starts walking away) By the way, the client loved the campaign!’

You could probably hit repeat on this exchange for next month and the month after that. However, creatives shouldn’t have to wear the label of being floozies with time management and budgeting.

Many of you have a great head for numbers, you’re just spending a lot of hours hoping by chance your projects are on track. But not all projects go perfectly to plan – that’s what make agencies such a hive of activity – but if you don’t have a business system that manages jobs end-to-end, then you have zero visibility and control.

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So what might an Everyone Wins solution look like?

You need real time, on demand reporting tools that make it easy to track costs and available resources, and identify when your projects are at capacity. A smart project workflow will also have alerts set-up to mitigate those cost blowouts.

On top of this, visual tools to easily monitor tasks across multiple jobs can be a huge benefit. Drag-and-drop task allocation, assigning colours to different jobs, team member photos – all these features can help make your life easier.

If you can see exactly what’s happening right now and communicate changes as they emerge, then you can better manage your team, your clients and your own sanity. It also means you can dedicate more time to assessing the quality of the work being produced. Imagine that huh?

There’s a long tradition of tension between the numbers people and the ideas people within agencies. This isn’t necessarily a bad thing, especially if your business system can talk across roles.

It provides valuable business information that can actually generate revenue, it can look forward as opposed to backwards, avoiding those nasty surprises and ensuring there’s more all round smiles every month.

20 Years. An agency systems perspective.

Chris Lever, Founder, Agency DNA

My first UK marcoms role was in 1995 as agency FD of Bernard Hodes, an Omnicom/DAS group company. Obliged to conform to the rigour by which DAS managed its portfolio and deliver rapid improvement in their two key pertinent drivers, profit margin and the working capital ratio, I was aghast at the way DDS, the group imposed agency media booking/billing, job management and accounting system, made getting these metrics a major exercise. A single minded Kiwi Financial Controller who I’d hired to assist me had words I couldn’t even begin to pronounce for a system which offered not only opportunity for one-sided entry, but produced a balance sheet by downloading disparate ledgers and combining them in Excel.

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Fast forward 20 years, DDS rebranded as Media Ocean, rebuilt its database, and yet seems it still can’t handle supplier invoices with more than six characters, or allow a major network create a new field to hold the PO references of Google and Facebook, who quite rightly have their own booking systems. If a network with two billion pounds passing through its pay-as-you-go ledgers doesn’t get what it wants, what hope might a smaller agency have? Excel is a strong supplement.

Step back fifteen years and I’m on a team with other senior players from BMB&B, Leo Burnett and  BBH collectively giving up weeks of our lives to work with Maconomy, guiding them on the development of their agency solution on top of what was admittedly a complex, yet robust financial system.

Youthful and optimistic this was heralding a golden age where a Scandinavian vendor understood that agency complexity is a state of mind, we then waited for the release of a system that would look as good as the Power-Point slides suggested, give clear and instant visibility over the inner workings of our agencies, enhance our staff’s lives and make the coffee. Strange I have since felt a strong compulsion to apologise to the many Maconomy users who in those early days found themselves short of utopia. It was more like the Underworld.

Talking it through afterwards with Morton, the Danish Senior Developer, trying to understand what happened between stating our reasonable requirements and the end product, it seems back in Copenhagen they re-thought our needs, and built as only they knew how. Something got lost in translation.

Undaunted, this was the start of the new millennium and things would only get better.

The thing with Maconomy is you’re buying a big box of tricks, and you need to know what you’re doing, have a very detailed spec, patience and a frothy budget.

A range of separate and colourful workflow systems have been invented to fill the many gaps left by Maconomy, Deltek even brought one themselves, but the reality is Maconomy for many ends up an expensive and under-utilised general ledger and accounting system.  Excel reigns supreme.

In all this time, like a long-life battery powered toy soldier, Rebus, now Paprika has quietly and defiantly marched on to a steady beat. A Cobol-based solution developed almost 30 years ago, it was the go to system for smaller agencies and despite attempts by SAGE, QuickBooks and latterly, Xero, the NZ originated cloud system, in many ways it still is.

Paprika has never made a big show of itself, yet through the passage of time and the reluctance of agencies to change systems, it has built a tidy market share of around 1000 agencies, a handful who are global. Despite being clunky and not so easy to use, it’s seen as a safe bet.   

A major drawback though is it is a one currency database system. What this means is as soon as you open your first offshore office, you need two databases. Imagine you have 20 offices in 14 countries. That’s a lot of databases, and even more Excel.  

Today the large networks still angst over systems, systems like Maconomy were seen as a great leveller. Mid-tier platforms for standardising multiple agencies, before moving upwards onto something that allowed greater flexibility in global client billing and reporting hierarchies, and migration to some form of shared service. Indeed this was my own strategy in deploying it into WCRS, now The Engine Group, following our MBO in 2004.

The problem is upwards moves to say Microsoft Dynamics AX or SAP come with their own monumental challenges, and matching price tags. A litany of issues prevail in the network attempts with these systems.

For SME’s, the great hope is the cloud.  

New agile systems, built from the ground up overcome many of the limitations sitting in systems made in the past. Agencies can implement without major cash outlay, retain flexibility and enjoy inbuilt scalability. Cloud usually means seamless and automatic upgrades, allowing users to benefit from continuous system improvements. Never again be threatened with an unsupported version.  

The better cloud solutions have open API’s, allowing true connectivity with other business tools, CRM, CPM, and BI, fully embracing the notion that whilst they may do more, they also do it better. The really good ones integrate all the features of job management, accounting and resourcing – the benefits of which are staggering.

There is still no single panacea for the world of marcoms business management and reporting intelligence, and in a tight margin and competitive digital world, agencies need to find their own differentiators.

Assessing what is important to agencies, the information needs at all levels, the degree of flexibility and autonomy management wants to allow, requires a matching to increased number of suitable systems of today which can offer exactly that. Even Excel now competes with Google Docs.

Which all means it is a really interesting time for agencies.

Overall in the past 20 years agencies have not demanded more, and have been fearful of change, even at risk of continuously adding overhead to get basic information circulated. Accepting compromise has unfortunately ingrained vendor complacency.

Yet for many of the new breed of agency, client demands, the general increase in the variety, scope and speed required of work, and the associated massive increase in the volume of data, compromise and complacency can no longer be tolerated.

The good news is there is now choice. The cloud has brought options that are fully featured, continuously improving, intuitive, easy to use, cost effective and quick to implement.

Agencies fear making decisions on systems, but change should be embraced. As a famous person once said, “Not to change, is to die.”  

So the future for agency systems is indeed bright and can be whatever colour you choose for your management dashboard.

 

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THE STATE OF PLAY:  AGENCY LIFE

Today’s agencies are experiencing a very real threat: the increased pressure from clients to do more for less. Add to this the emerging trend of some marketers to bypass agencies and go straight to the source of production and media, or bring the process in-house,  and you have genuine conflict in agency life.  These pressures have a number of consequences. 
It’s natural to respond by working faster, harder and  longer - which more often than not won’t deliver increased profitability or productivity (though it’ll probably get a client off your back for a week or so).

We work with dozens of agencies who are trying to keep pace with rapid changes in the value chain on top of new technology, while still delivering outstanding work for their clients. It’s far from easy and no agency is perfect. 

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Systems Are Go

The management of corporate workflow is increasingly becoming a concern.
Molly Pierce investigates the solutions

Systems pursue us throughout our lives. They can be productive or restrictive: but for corporate agencies and their clients, they're very necessary. The management of corporate workflow is highly important, as both a preventative measure and a solution to tangled situations.

It's tempting, particularly early on in an agency's life, to believe that corporate workflow management is better left up to the big guys. "Many agencies with the talent to conceive and execute outstanding creative work leave their financial systems upgrade to a later stage – typically when their first major clients start demanding greater analysis on the management of their accounts" says Chris Lever, MD of AgencyDNA.

However, this approach of waiting to react to demand for management software is misguided, Lever believes. "No matter what stage of a project, or how big or small, agencies should not compromise on their information systems. It's fundamental to being in control. It's not untypical that until this point [of upgrading] all client budgeting, report and analysis is done in Excel and, with financial data views not coming directly from the system, it is this disconnect which carries risk."

AgencyDNA is a consultancy which specialises in systems that improve planning and management at creative communications agencies. It recently announced an exclusive partnership in the UK and Europe to distribute AccountAbility, a new cloudbased management solution, which can integrate all of an agency's financial and management information – meaning fantastic accessibility and no need for costly, space-filling servers.

However, it isn't just in account management or budgeting where systems for managing projects are essential. Leif Skogstad, commercial director at the corporate communications agency Addison, told me that Addison has been offering remote access systems to its clients for 14 or 15 years.

Addison produces annual reports for many of its public company clients - a labour-intensive and timeconsuming process. It will never be an easy task: annual reports go to investors and analysts, and are full of crucial detail. Errors or even mis-steps can severely damage a company's reputation and therefore its bottom line.

"These reports are 250 pages, and they take three or four months to produce, with as many as 15 people needing to edit the document," says Skogstad.

"In fact, it's going up to 19 users with a client in the next few months. But we're working with people whose main occupation is not the efficient production of a document - nor should it be."

Recently, Addison has switched over to a new system for managing the editing process of its reports, a Swedish service called CtrlPrint. Addison assumes the cost of installing CtrlPrint and its InDesign and InCopy plug-ins on its clients' systems, because the benefits to the overall management of workflow far outweigh the expenditure.

"The main point for us is to be flexible," says Skogstad. "We would never tell clients how they ought to work, but using this system definitely makes the client's life easier." Of all the clients that have made the transition with Addison to using remote editing on their annual reports, not a single business has then reverted to tradtional methods. CtrlPrint has had some customers shy away from the system, but its feedback is for the most part extremely positive.

"It used to be the case that you would agree on a number of proof cycles, which was labour intensive. I've seen account managers on the phone to clients for four hours at a time going through a document section." Previously, reports were marked up, often by hand, then scanned or delivered back to Addison. Now, CtrlPrint allows team members access to edit the specific sections relatable to their function, then upload the edited versions back up to the system.

"The first benefit is that you're not tied to a cycle of proofs, so certain sections can go through 15 or 16 rounds of amendments if needed. The amendments can be made and approved within an hour, rather than waiting for the next proof cycle – so it consolidates the process." The second benefit, according to Leif, is in the time saved; the new system also allows for greater accountability.

"It's improved control over the document itself, because all changes are tracked and the version history shows who's made which changes when. This in itself helps to apply internal rigour," he says. "And you can control whose changes are accepted, and who has read-only access, and who has editing access for each section, as well as switch these security levels during the editing timeline."

Lever also brings up increased levels of control as a reason why such software is crucial for a business. "Without integration... the time spent on the job may not be known, the agency can lose sight of the third party cost spend, and very soon the expected profit and capital working positions are exposed. Integrated systems provide visibility over client jobs at any stage." The new control levels are also a tangible benefit to clients, as well as the contribution to a job's overall profitability.

A major plus with AccountAbility is its mobile capability. Lever says this is crucial: "Like most industries, agency people increasingly expect to be able to access their tools on their phone or tablet, to view or update details such as doing a timesheet, wherever they are. Accountability has iPad/ iPhone capability and is developing an HTML5 interface to be used across any browser." And the straightforward web delivery system of CtrlPrint is attractive to Addison.

Although these systems do two very different tasks – and in fact, there are probably as many systems for managing corporate workflow as there are processes which need managing – the benefits to companies are transparent: they provide ease of use, increased visibility and accountability, straightforward interfaces, and flexibility. It seems likely that before long, comms agencies won't know where they were without them.


Article Source:
Communications Magazine
Wednesday, 02 January 2013