2016 is the Year Business gets Intelligent

I sense 2016 will be a year where expectations are met. Not necessarily that things suddenly and substantially improve, but the way we think and go about things will.

Last year was one of achievement. Marcom and media agencies saw billings growth and moderate profits made; cautious new hirings and people confidently moving jobs; M&A deals were done with some new records set. Businesses have answered fundamental questions of themselves, they’ve survived and if not thrived, have changed or are changing for the better.

One question being answered relates to systems, and agencies are realising the importance and value of integrated data. At the CRM and ERP levels control and visibility over transactional data, job budgets, time, resource utilisation and accounting, has never been more important, especially as they continue to be retained as custodians of a wider cross section of their client’s budgets, and quite rightly aim to still keep a reasonable margin for themselves.

However I believe where expectation will be met most is beyond this transactional data layer in the stratospheric planning level where Excel still reigns. This is the kingdom of business intelligence, and is manifesting in smart, yet simple to use business planning systems (CPM's) fed from structured and better connected ERP systems, delivering real value across several areas.

Firstly, corporate performance and making the production of usable performance data much easier and quicker. Currently most reported data is downloaded from ERP system to Excel then Power Point to produce charts and commentary. Some systems are OK, essentially databases with lots of self-select fields, but most have exports that are heavily manual into Power Point. Think of the effort to produce your standard “killer” charts each month, and wish that could be automated, month after month. Smart BI systems have interfaces which make this process much easier, have impressive and easily distributable visual dashboards; the better ones allow projective analysis and 'what if' scenarios.

Next is scorecards. For senior managers or as a summary of the above, scorecards would be a revolutionary step within many agencies with all the key metrics collated and presented. These rarely exist in my experience, the lack usually a function of disorganised source data and the complexity of extracting and collating it. Smart new BI tools make this process much easier and the possibility a reality.

Pipeline or Demand Planning – some cloud ERP’s now nicely combine resourcing within their core job management functionality, but I still see lots of excel charts and "hand balling" of data as project delivery forecasters (traffic managers) attempt to match resource need to supply, and execute smart decisions such as when not to bring on a freelancer. Mostly these are exports from an ERP into Excel and then heavily manipulated, and are out of date the instant they are downloaded and are offline to any new projects being set up.

Client performance – an area where formal reporting is not a typical area of agency systems delivery with intelligence on this front again compiled from hand balled data in Excel. What we’re talking about here is not job or client profitability, but the specific data driving clients own decisions, against which agencies are increasingly needing to be proactive. Collating and getting decent data out of the multitude of TV and digital campaign responses, social media traffic, news and financial bulletins, PR, anything which is likely to drive a need for response is difficult, but the urgency and immediacy of need remains.

Having a business intelligence system delivers these with the additional advantages of automation and simplification, simply summarised as:

  • saving expensive time on non-added value analysis

  • giving more transparency to data and making it available to many

  • if it’s easier to produce, reports can be more frequent (weekly rather than monthly).

Ideally business units or departments would have their own scorecards with the ability to drill into the detail. Raw data would largely come from the ERP, dynamic links allowing the production of pipeline planning, for example, likely alone making for a positive business case. 

Beefing this up into a full commercial scorecard where pipeline demand plans, client performance and commercial performance are all rolled into one, accessible place, is the expectation that should be set, as can now be met, viz. bottom layer ERP control, top layer CPM accessibility and visibility. 

Summing this into a set of 2016 resolutions then might look like:

  1. Get to see your business performance graphically on a day to day, weekly and monthly basis.

  2. Develop non-Excel based business plans which are integrated with your ERP.

  3. Future proof your financial system - for example will it allow you to seamlessly migrate to IFRS15 reporting (by January 2018).

  4. Ensure you get value for the money you pay your system vendor for support and maintenance.

  5. Give consideration to a cloud system as a viable option to the system you have loaded on your servers, and is perhaps three versions out of date.

  6. Assess the extent to which Excel pervades your business for reporting, and make a conscious effort to reduce this dependency.

  7. Understand your processes and streamline them where you can. Only enter data once.

  8. Have your Finance team work less hours, but make them more productive (with better systems!) 

Expect more, get more.

I wish you a prosperous and enjoyable 2016.

A version of this post first appeared in Red Hat Recruitment’s “The Club” – 15 January 2016 (see http://www.redhatrecruitment.co.uk/login/)

Chris Lever, Founder

20+ years experience in professional services.  Former Finance Director of WCRS (now The Engine Group) and BLM (now Arena Media), two of the UK's most successful independent advertising and media agencies, assisting WCRS through its 2004 MBO and BLM through a trade sale in 2008.  Whilst the transactions featured heavily in these roles, a key personal driver was a determination to promote finance functions with people and systems capable of handling the change and growth these groups faced under their new ownership structures.  An Australian CPA, Chris is an all-sports enthusiast, although participation is generally now limited to pedaling a road bike.