Advertising agencies are continually changing, and as we enter 2023 and beyond, the needs across the board are much greater. From embracing emerging technologies — like web3 and the metaverse — to common business challenges like talent crunch and employee burnout, value pricing, and complex media landscapes, the fabric of the industry itself is changing before our eyes.
With this evolution, we are seeing regular rebranding of advertising agencies and updated go-to-market plans and services. However, one thing that remains constant is the need for a capable, scalable, and flexible Enterprise Resource Planning (ERP) solution.
For an ERP to be effective, do agencies need to completely change the way they operate? Probably not. Agencies are full of great operational and commercial minds with some solid workflow processes and reporting, but a lot of these processes may be manual or split across a variety of different tools. Instead of trying to create entirely new processes to fit your tools, consultancies like Tangram can help support change through business process mapping, process improvement, and adaptation of tools to suit individual agency needs.
There are many benefits to a good ERP, especially ones that offer a full suite of modules from finance to asset management. Although this may sound like the holy grail, let’s look at some practical applications to help support some of the challenges agencies are currently facing.
Retaining talent by managing workloads
If employee retention is a concern for your agency, you need to make sure that the knowledge those employees possess is being transferred effectively. Knowledge like who has the experience to work on a project? How much time was scheduled and used? What is the current status of the project? Where are the briefing documents and project timelines? All of this information should live in one place for a simple handover.
If managing work-life balance is a priority for your agency, then having an ERP that shows each individual’s capacity should be a no-brainer. Having a function in your ERP that simply doesn’t allow you to book someone more than their contracted hours without a sign-off could start the right conversation and shift away from the mindset of overtime being the norm.
At the end of the day, having the ability to visibly consolidate tasks in a logical manner will save time, and every extra minute or hour will add up over time.
How confident are you that you can deliver the work?
Every agency relies on a steady stream of new business. However, how do you know where to balance the workload from existing clients versus who you need to pull into a pitch? This is where understanding your capacity in the agency is vital. You should be using capacity reports from your ERP to align key stakeholders on this plan before commencing any pitch.
After you’ve won the pitch — congratulations! — the question remains: are you confident you have the capacity to deliver the work? The first few months in a client’s life cycle are the most critical, and teams are not built overnight. But what if you could plan for the capacity you need — and then overlay that with your current agency capacity? You would have the data and, therefore, substantiation to put a business case in front of HR and finance stakeholders for the required skill sets and new hires.
Is value pricing a buzzword?
Nope! We believe agencies should be looking to create more value and profit. If you break it down, value pricing is simple. If you had an hourly rate for one resource that you normally charged at $200, and then you were able to charge $400 for that same resource, that’s value pricing. You have increased your price and made a massive margin uptake without changing your cost.
Introducing value pricing is hard if prices and margins are not regularly disclosed or accountability is not driven through your client management teams. However, in implementing an ERP, being able to view your pricing outcomes and scheduled data in the same place will help keep everyone accountable for value alongside individual KPIs. This will focus the conversation on price; if someone decides that adding an extra percentage to the estimate is reasonable, then this should be associated with their KPIs and supported by data from your ERP.
Whose responsibility is profitability?
We all want to make more revenue, but we shouldn’t forget about profitability. To know how profitable your agency is, we need to know a lot about input; in the case of agencies, this typically means time.
We come to the age-old tale of hating doing timesheets. But maybe the frustration actually lies with the usability of the timesheet application. Timesheets should be easy! At a bare minimum, it should be accessible on a smartphone, but why not explore smarter solutions that recommend where to allocate your time based on your schedule — or an app that turns timesheets into a fun team game?
Agency teams may not like timesheets, but it should be the contrary; time is what we should be looking to get back for teams. Coming up with great ideas that can change society or be played at the Super Bowl takes time, and time on your craft is what agencies should be looking to increase — not time spent dealing with bottlenecks, admin, and other non-value-added tasks.
The ease of business intelligence
When talking about reporting, scalability and flexibility are highly important. Things change, reporting requirements change, and how you need to present data changes. The saying “what gets measured gets done” holds true for most businesses, and with the right tools now able to coherently present data in a meaningful and timely way, driving employee KPIs and holding them accountable has become simpler.
Mapping out the flow of data across your agency is an important first step to getting consistent data. When configuring an ERP and finance system at your agency, you should always keep the end goal in mind. Using business intelligence tools to support data-driven decisions, improved client insights, and streamlined reporting is not as difficult and costly as we may think — the key is knowing how to get the data points you need into your agency tools. An ERP is normally at the centre of your tech ecosystem and should be able to integrate with all other applications used across the business.
Change must be led, but also enabled
While technology can be an instrumental factor in transformation, it is people who drive it. Implementing processes that deal with business issues often means that agencies are looking to change the way they deliver work. When we look at software-enabled change programmes, it invariably makes sense to improve and evolve agency processes at the same time to produce meaningful, lasting results.
Remember, change is a process in itself. There may be setbacks on the way, but keeping communication channels open and consistently referring back to your goals will enable you to refine this change management process as needed. In short, the success of your system change programme rests on having the right people finding the right way of working and designing your platform to meet business goals.
There are many more benefits to a good ERP solution, or an integrated suite of tools, which helps you manage your agency on more accurate and reliable data and helps management make conscious and educated decisions. So, with key priorities being built out for the year ahead, it’s hard to see how agencies can overlook implementing or updating their ERPs to create more alignment between all their tools. While agencies are looking at selling their clients the vision of emerging technology and trends, it would be prudent to look internally first and get their house in order.
Heshan Lorenz-Daniel, CPA, management consultant at Tangram
Tangram works with marketing and communications businesses of all sizes across the globe on optimisation projects focused on the end-to-end implementation of enterprise software, business transformation, and change management.