Agencies, like all businesses, require organization and structure. Yet agency executives often resist when project management experts offer advice or tools to improve efficiency, in part because they view such practices as administrative burdens that rob them of time and creative energy. It is natural for an agency to want to focus on creativity and spend less time thinking about project management.
The problem is that the creative process suffers—as does the business—when projects get off track, which happens all too frequently as client teams agree to unrealistic budgets or schedules and talent is stretched too far. Half of agencies today say they lose 11 percent profit or more due to over-servicing clients, according to the SoDA Report on agency project management. Conversely, more than half of agencies (51 percent) using technology to help them better run operations reported net profit increases, and more than one-third of those saw profits rise 11 percent or more.
In the current environment, how projects are managed can make the difference between a highly profitable agency and one that barely breaks even. Client demands are changing. Project work is increasingly replacing retainers, adding more layers of time and cost accounting. Budgets are shrinking as more activity is being moved in-house and efforts are stretched across ever-expanding marketing channels. Faster and cheaper is the new normal. So much of digital advertising today is automated—so why can’t agency processes be too?
Change Comes From the Top
Agency leaders must set the tone for a major change in business practices. Once senior executives embrace the idea that increased efficiency and profitability are just as sexy as winning new business or crafting the perfect creative pitch (and are, in fact, prerequisites for doing so), department heads can begin to work together on a plan to capture and automate agency processes using the best available tools.
Getting every agency employee on board with a new system then becomes a matter of strategic change management. The key principle is to provide specific examples of how new tracking systems and reporting tools that increase transparency and enhance interagency collaboration benefit individual employees. Clearly illustrating how a specific change will remove manual steps from their day-to-day process and free them up for other tasks is an effective way to mitigate employees’ natural resistance to change.
Managers also need to be realistic about the time required for employees to learn a new system and how long it will take to reap the benefits. Agency leaders as well as creatives must understand that these systems become increasingly valuable and their benefits will become apparent as soon as six months into the transformation process. In fact, with a spot-on implementation, you will see immediate changes.
However, it is imperative that the system is used properly from the start, so that the chain of information is robust and complete.
Avoid the Snowball Effect
Anyone who has worked at an agency understands the snowball effect. A work order to design eight banners suddenly becomes one for 11 when the client says they have a channel that they use internally and asks for three more with the same artwork but in different sizes. Over the course of a typical project, that can happen a dozen times, resulting in several unbilled hours that never make it onto a change order. In fact, research shows that 75 percent of agencies report frequent scope creep, but fewer than 10 percent regularly charge for additional work. Yet most agencies still do not have a formal system in place to measure workloads. That must change.
Each agency needs to customize a system of tracking and reporting for its specific needs. But there are certain principles that all agencies should follow in adopting best practices of project management. These include:
- Get organized early. Be upfront with clients based on project data from similar jobs. Create a detailed Statement of Work (SoW) based on actual figures from previous jobs, and build internal SoW audits into workflow and schedule. Provide clients with credible, timely information on scope creep impacts.
- Actively track, manage and update SoWs regularly. Compare time/expense actuals to projections. Train clients to not parse out requirements piecemeal. Review completed SoWs for each client, calculate the actual workload and see how it measures up against fees and resources.
- Eliminate redundancies in workload and communication. Protect employees with technology that reduces manual, repetitive processes. Implement simple and easy time reporting to balance workloads. Increase visibility of reporting on all schedules across all projects and resources.
This is necessary work for every agency, and it should become an expectation for each employee.