Creative Agency Profitability e-book 10 steps to increased efficiency and profitability

Creative Agency Profitability10 steps to increased

efficiency and profitability

Deltek.com/TrafficLIVE

01 MANAGE CAPACITY

02 PLAN AHEAD

03 BALANCE WORKLOADS

04 DELIGHT CLIENTS

05 AVOID OVER-SERVICING

06 ESTIMATE ACCURATELY

07 CONTROL SCOPE-CREEP

08 EMPOWER YOUR GREATEST ASSETS

09 USE THE RIGHT TECHNOLOGY

10 DRIVE PROFITABILITY

It’s all about the art. Creative agencies are defined by their creative capabilities. But it’s not always easy to convert creative talent into profitability without the right culture, processes and systems in place.

This 10 step guide will show you how to increase your efficiency and drive profitability – keeping you one step ahead of your competition. With the right tools to manage business processes and resources, you can ensure that the hard work is taken care of so your team can focus on what they are best at – creativity.

The staff at your agency is your biggest asset and your largest single cost. They define your capacity to service clients. If you know how much capacity you have, you’ll know how many projects you can take on and how much you are spending on resources. Managing capacity effectively cuts down on freelance costs and makes you more profitable.

MANAGE CAPACITY

01

“67% of agencies’ business systems fail to provide visibility to resources and skills. -Deltek Clarity Agency Report

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PLAN AHEAD

Track your resources effectively. Your creative teams should be giving their best work to clients without over-running, or under-servicing clients. It affects the bottom line if they do, so you need to be able to see this in real-time to make adjustments accordingly.

02

Effective resource planning is perhaps one of the most significant

drivers behind key success factors, like utilization and profit. Inappropriate

resource assignment drives up costs. -Deltek Clarity Agency Report

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BALANCE WORKLOADS

If you have creative team members who are consistently under-utilized, you need to know about it. You can look for ways to up-sell the kind of creative talents they offer, or perhaps review whether that skill set is even needed by your agency.

Inappropriate resource assignment drives up costs, so matching cost appropriate resources to jobs is crucial. -Deltek Clarity Agency Report

03

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Let’s be honest, how often do you turn down work? Instead, you’re likely to take on freelancers to keep your clients happy but this often means increasing your costs dramatically and running the risk of missing deadlines if your team is unable to cope.

Having a view of your total capacity in real-time can help you spot these potential problems and solve them well before they occur.

DELIGHT CLIENTS

Projects using freelancers take longer to complete and a 20% lower ROI than

projects using agency staff.

-AgencyAgile Study for DigiDay

04

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AVOID OVER-SERVICING

05

Nearly 1 in 3 agree that over-servicing suggests that

their business model is not working correctly.

-Deltek Clarity Agency Report

Spending time on something that you are not being paid for erodes your profit margin; it’s the single biggest destroyer of value in your agency. You need to know in real-time what you’re doing as opposed to what you’re getting paid for.

You can then take the decision to re-negotiate with the client or offer extra time as a gesture of goodwill - but make sure the client has visibility of all the work you are doing.

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In order to estimate accurately, you need a lot of information. The more detail you can find out from the client, the better. An accurate history of past projects can help you to predict how long a similar project might take for

the same tasks, or similar type of client. Track your project history and use it effectively to estimate new projects.

ESTIMATE ACCURATELY

06

Despite the best laid plans, every project carries

uncertainty and risk that all too often lead to cost and

schedule overruns.-Deltek Clarity Agency Report

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More than half of projects are “challenged” - completed and operational but over-budget, over the time estimate, and offers fewer features and functions than originally specified. -The Standish Group Report Chaos

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07

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Once a project begins, it is almost inevitable that items will be changed or added to the overall scope of work. As well as a good account manager, you also need an early-warning mechanism for everyone within your agency to be able to see this occurring in real-time. Coupled with an audit trail to track scope-creep and determine what is billable, you’ll be able to pinpoint the change of the project immediately.

CONTROL SCOPE-CREEP

EMPOWER YOUR GREATEST ASSETS

By bringing information together, businesses enable collaboration

among shared processes, such as budgeting, delivery, resource management or invoicing. When

processes come together, the people involved soon follow.

-Deltek Clarity Agency Report

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08

Traffic/studio managers have been around for years with good reason - they make your studio work more effectively and contribute directly to increased profitability. Just make sure you give them the right tools to be able to do their job properly. Leaving all the knowledge to one person causes a bottleneck of communication.

USE THE RIGHT TECHNOLOGY

You need a comprehensive resource and time management tool that does the hard work and allows your team to do what they do best.

Ideally, your system should enable you to:

• Record time – simply and accurately• Manage resources and make scheduling easy • Notify staff with real-time alerts and tracking • View capacity for now and future weeks/months • Track client profitability

09

Nearly 65% of agencies’ business systems don’t integrate the resource plan with the revenue forecast; seemingly leaving agencies unable to easily assign resources based on likely future work.-Deltek Clarity Agency Report

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If you have the right business processes and the right agency management software in place, you are well on your way to increased efficiency and profitability. Your creative team wants to be free to be imaginative – free them up to do what they’re good at, which is keeping your clients happy and building your bottom line in the process. DRIVE PROFITABILITY

10

69% of advertising and marketing agencies believed that a lack of time

accountability was impacting negatively on profitability.

-Deltek Clarity Agency Report

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Deltek TrafficLIVE can help your agency stay connected, productive and profitable.

As the creative industry’s preferred cloud-based agency management platform, TrafficLIVE empowers agencies to simplify their processes from pitch to delivery, create more accurate estimates, schedule the right resources for the right job, record time - and monitor client profitability.

Used by small boutiques, large independent agencies and global networks, TrafficLIVE is a solution that creative teams love and finance teams trust. Let us show you how to cultivate productivity and profits. Deltek- Know more. Do more.

Learn more at deltek.com/trafficlive

On the capacity side, where before we were looking at a week’s work

planning. Now we are looking at the workflow for the entire job, so it could

be 6 months, so we can see what the capacity for that job is.

– Andrew Webster, Fitch & Brand Union, Implementation Manager

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