The abrupt transition a few years ago to a work-from-home model, the challenge of offering more services, and in some cases, the burden of instituting salary freezes weren't easy waters to navigate. With inflation increasing and whispers of a potential recession on the horizon, your decision-making responsibilities aren't likely to get any easier anytime soon. No pressure, right?
We want to share three steps you can take right now to become more efficient as we head into 2023 to set your agency up for future success.
1. Clean Up Your Data
This may sound like a no-brainer, but if you're managing projects in spreadsheets – having multiple people from multiple departments manually enter estimates, budgets, and costs in Excel – how can you be confident that your reporting is accurate? Not to mention, it is inherent in manual processes that there's always a lag. So while your data may be an accurate snapshot of a moment in time, that moment is already in the past. The manager making important decisions on outdated data won't be a manager for long.
Similarly, if each department is managing project data in its own bubble, there are bound to be errors when it is time to bring it all together in a report. Every minute it takes to reconcile the data, track down and correct any errors, and create a report, is one more minute that makes that report out of date and less valuable.
The way to ensure that your data and reporting is accurate and up to date is to digitize and connect all the facets of your agency's operations into a single source of truth. A system where Project Managers, Resource Managers, and Finance can manage project data that feeds all the other departments automatically can help you get better reports, so you have what you need to make better decisions.
2. Customizable & Digestible Reporting
Once you've got accurate operational data in real-time, the next step is to customize the output to give you precisely the information you need in the most digestible way. A spreadsheet showing late timesheets won't be as useful to you as a visual chart showing budgeted time yet to be incurred compared to time already incurred on a project that is dangerously close to going over budget. With the first report, you'd need to gather more information from other departments to really understand its impact on performance. With the other, you have the visual information you need in one place to make a better decision regarding how to reallocate resources to avoid over servicing. When operational data from multiple departments are shared in one system in real-time, and the output is more palatable and sharable with other decision-makers, you can connect the dots much easier and take corrective action much faster.
3. Add Business Intelligence
The next step beyond reporting is to introduce some form of business intelligence analytics. BI helps you dig deeper into the data, evaluate trends, and uncover actionable insights that might not have been so obvious with simple reporting.
By adding BI into your agency's operational ecosystem, you can take decision-making to the next level. By analyzing P&L across projects and clients for a period of time, you might see a trend in the type of projects that yield a higher profit margin. On the other hand, maybe the most profitable and impactful decision you can make for your agency's growth would be to specialize and pass on certain types of projects. Who knows? But after taking these three steps, you can be confident that you do.
Insights like these can have a direct impact on your bottom line. For example, Deltek’s 2022 Creative Agencies Report found that firms who were further ahead with their digital strategy initiatives, such as BI, had 12% higher profit margins than their immature peers. Unfortunately, not many agencies are currently focused on this area, with only 21% in our 2022 SoDA Survey on Talent, Culture & Operations saying they expect to invest in analytics & reporting next year.