Steering your ship in times of trouble.

US Navy film footage May 11, 2017

The stunning image is of the 30-year old 104,000 ton USS Abraham Lincoln undergoing sea trials in the Atlantic Ocean after a major refit. For the short video from where I clipped the image, go here https://youtu.be/EtkpDV6Gq0c, and to see it in "real action", check out the the soon to be released sequel, Top Gun:Maverick!

Watching this and thinking of the systems that are operational onboard this ship, from its nuclear power plant, weapons and defence systems, launch and recovery systems for 90 odd aircraft and helicopters, aircraft refueling, storage and maintenance, welfare and management of almost 6,000 crew and aircrew, navigation and communication over thousands of miles, and much, much more. It is truly impressive.

That "Abe" is undertaking this extreme manoeuvre demonstrates what the commander expects he or she will have to undertake to avoid real danger. Considering the mass and speed of data merging to trigger the course decisions, and the multitude of other consequential actions required as a result, is a little mind blowing. Every response is a key decision, mostly made by people, albeit highly trained and well informed.

I could stop the military references here, but the coronavirus pandemic has thrown the world into an almost war-like crisis. We are all in this and, as people and businesses, we are responding in the best ways we can. Intense unforeseen and new lessons are being learned, in real time. This is not a drill.

Are you able to see clearly where your rapid turning manoeuvre puts you in respect of your intended navigable route?

With the three months of UK lockdown milestone now passed and the shocks to businesses still being absorbed, I’ve set out a few questions you may wish to contemplate for when the storm winds of COVID-19 are suitably calmed.

My questions are:

• Have you identified all the information you need to confidently steer your business, and do your current systems support or provide a requisite depth of analysis?

• How is your data gathered and communicated, and do your systems provide a consistent, unmanipulated and seamless flow of data?

• Is information being relayed fast enough to where it's needed for hard course changes and actions?

• Are the people in their various positions (whether temporarily WFH or not) actively assigned, and do they have the appropriate tools to do their jobs?

• Are you able to see clearly where your rapid turning manoeuvre puts you in respect of your intended navigable route?

Some indicative answers from past client audits are telling, but not unexpected:

1 Many clients identify their KPI's to include client revenue, utilisation, job (or project) profitability, and overall company profitability. Few respondents ever mention the balance sheet, e.g. current ratio or the similar AR/AP ratio, although in fairness all have developed some form of hand-crafted cashflow forecast. A lot of KPI's are calculated manually in Excel. In one example, job profitability is determined by downloading invoicing and cost data from a basic accounting system, which together with time from another separate online time app, is summary-line keyed into an Excel-based project tracker. This is a time-consuming exercise, prone to error and they've already been torpedoed by the time the hard evidence of over-servicing or under-estimating is revealed. What other data do you need?

2 Every business transmits data across multiple systems, and indeed there is no "one system". However, systems are not connected so data is entered manually in often more than once and people are trained on (and may only be concerned with) their part of the process. Simple things like job names are typed ever so slightly differently from one system to the next, a supplier can be set up twice. Time is entered haphazardly into “buckets”. These might not be major issues in isolation, but when you are tracking a brace of Exocet missiles coming at you, which one represents the most immediate danger? How fixated is your client that your invoice details match exactly up to their PO, or worse a billing rate or total is misquoted on your Excel estimate? A recent McKinsey article, "Digital strategy in a time of crisis" (see https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-strategy-in-a-time-of-crisis#) explores the bold steps a move to virtual operations entails and advises among other things, a quickening of data reviews and a focus on technology. The article pointedly asks:

"Where are the breaks and crashes happening as 100 percent of your interactions with customers, employees, and business partners go virtual?"

As our summary of audit results shows (see below), Excel is almost universal in being the front and back-end of systems "stacks" and, great as it is, it's rarely connected and so represents major clinks in their overall chains of data command.

3 We all have mission critical deadlines and that these are achieved in the current environment is testament to the skill and dedication of your crew. Yet companies still take two weeks, sometimes longer to close their hatches (sorry, books) at month-end. Waves have crashed over the bow, lower decks are flooding, energy and resources are spent pumping water out. In these scenarios, we’d say you need to map your existing systems layout, analyse the data structures and processes that support data flows from one system to another, and find solutions to speed production of key operational and financial information, for real-time and formal weekly review.

4 Virtual working has been brought on by necessity and it will play role in business life for the foreseeable future. Some business leaders, like Sir Martin Sorrel, are sceptical it will be engrained permanently. He does however firmly endorse the view the current crisis will “accelerate the digital revolution”. “If you have historic costs to write off, get it out of the way now and accelerate your digital transformation,” he said recently speaking on Sky News. Of course, this is easier said than done when companies are worried about cashflow and hesitant to invest, but vendors are businesses too who are also responding to the crisis. There are some good deals out there, and this is a good time to consider just what your requirements are and get the right combination of systems to steer your ship.

5 With eyes focused on the turbulent seas ahead, it is hard to contemplate what is over the horizon, especially as you are making the hard course changes this crisis demands. Yet this is exactly what you must do. The dilemma with tied down fiscal forecasts, is your world is flat and the edge is whatever your year-end date is. Short-term project-based businesses of course are doubly challenged in that their horizons can be a lot closer than year-end. When this is your perspective, it will be hard shifting forecasting method. Yet by joining up data from lead to cash within your core finance system and connecting forecast capability, you will be in a better place to start creating outlooks that incrementally roll (or zoom) forward. You can also develop and integrate zero-based budgets for those lines where it makes sense.

This is a good time to consider just what your requirements are and get the right combination of systems to steer your ship.

The UK creative industry is not innovating fast enough

The UK creative advertising and production industry is not a great innovator.

I am no way suggesting this in respect of the craft, the brilliant thought and creative execution for which it is a world leader and contributes a staggering £92bn a year to the UK economy, but specifically in respect to the business management systems which underpin many of our creative and production companies. The type of innovation that was the principle on which Agency DNA was founded to deliver.

The world is changing fast, again, and with GDPR, Brexit and a global pandemic for starters the business data guidelines that creative companies need to adhere to more than ever are:

1)      Security – the safe storage of well-structured system held data;

2)      Accessibility – the 24/7 ability to view and act on data, as needed and as authorised;  

3)      Velocity – the speed with which source data is made available to the highest level of reporting, and

4)      Integrity – the confidence end-users have with data presented, helped by an ability to drill-down seamlessly through connected system layers to the source.

Few companies have just one system where the primary functions of Customer Relationship Management (CRM), Operational Management (e.g. for Projects, Distribution, and/or Field Services) and Finance – the most important core system function for any business, are purpose built as integrated modules.

Most companies have multiple systems, a systems “stack” where specific systems are acquired or licensed for particular functions to sit on top or side by side, and which often fail through a lack of natural connectivity, accessibility and user controls between them. Excel is typically used as the glue, but as a “data adhesive” it’s not sticky and inevitably detaches. Offline pools of spreadsheet data are left high and dry, the contents vulnerable, their usefulness quickly evaporating.

Many system vendors through PowerPoint and hard-wired demonstrations show the brilliance of their systems, but how easy are they to configure and at what cost? Is the technology on which they're built the most advanced? Do they connect well to other systems, and are the primary functions natural extensions to the core system, or are they bolted on – suggesting they'll leak data, into spreadsheets? How well are they supported? 

For the UK creative industry in particular to remain a global leader it must stay profitable and be more productive. The ability to recruit and retain top talent, nurture the next generations, and continue investing and innovating has never been a given. It is now an even greater imperative.

GDPR is a policy requirement in respect of customer data, but it is actually wake-up call to the whole issue of data management. Companies need the systems that provide control and visibility, security and agility over the harnessing of their business data to see and seize opportunities.

The success by which this can be determined will be linked to the ease with which users can themselves adjust their systems, adapting them so they can react and grow – without having to wait for support or see more data spilling off into, yes spreadsheets. 

The advertising networks are a case in point.

Sure, there are a number of seismic forces compounding against them, but a lot of angst is of their own making, with convoluted structures and systems that just can't support them. They’ve never been truly agile, and it's staggering how much money they've spent on flawed systems and still have buckets of data sitting in spreadsheets, sensitive data, now exposed to GDPR risk.

Embracing innovation in their business systems will definitely help keep their creative cutting edge, but the same goes for any business out there, whether big or small, listed or independent.

Email me for more information, chris.lever@agencydna.com

Get a good system to improve your communications delivery.

Greatness is hard to achieve in advertising with 84% of ads not getting noticed or remembered, and with creative execution the second biggest driver of market share growth, highly creative ads are 16 times more efficient in achieving this[1]. There is a quintessentially huge difference between the best ads in terms of their ROI.

Whilst the "data" referred to in Tom Roach's article is market share and impact data, effective management of agency's own commercial data has an implicit bearing on these outcomes. Many agencies, small and large, simply don't have the integrated systems or data structures that allows them to fully harness their data and quickly adapt to the variable needs of their clients.

In the now 10th year of our existence, Agency DNA has constantly searched for technology and process solutions that are new, fresh, cloud-based, highly adaptable, able to be seamlessly integrated and are cost effective, with the principle aim of bringing more transparency and clarity to agency commercial operations and financial management.

During the course of this work, we’ve plugged into the prevailing industry dilemma of squaring the circle between fees based on time or percentage allocations of staff, to the pricing and management of work against specific deliverables.

The hurdles for delivering effective marketing communications are many, some technology related; in fairness, most are not. Through the experience of our team, now inclusive of a highly regarded strategic brand marketing director, we've listed some fundamental ones below:

• Briefs can be too general, and a common language for deliverables is lacking;

• Agency proposals lack transparency and contain poor links to deliverables;

• There are capability gaps in brief writing, which can lead to inefficient iterations;

• Knowledge and learnings are not codified sufficiently well and can be lost, especially with personnel changes;

• Agency resource plans are often not clear;

• There is too little cost benchmarking.

For the hurdles that are technology dependent, many agency solutions have been set up to handle one or two things well, yet don’t have the functionality or flexibility to adapt to a wider set of needs or worse, can’t talk to the other systems that are brought in to supplement.

In too many cases, the offline solution is to create and juggle a bunch of spreadsheets.

For deliverables specifically, many ERP’s have job type structures that are set in concrete and time is the primary means of determining revenue. On this basis, the effort to realign data so it can be worked on and analysed on a by-deliverable basis is immense.

With this in mind, we built an application that connects directly to the agency's ERP, and facilitates a job to deliverables data realignment, with composite pricing and resourcing as direct outputs. We can also deliver a full stack solution for those agencies who don’t have confidence in, or who have simply outgrown their current system.

The app is a kind of second-life view of the creative process, an alternative world where pricing of deliverables and effort is determined seamlessly and independently of agency timesheets.  

Combining our expertise with enabling technologies, we can deliver real outcomes for our agency clients, including:

• Standardised templates and workflows;

• Clear demonstrations of workloads and deliverables;

• Faster proposal approval and alignment;

• Defined deliverables, by type and complexity, with clear pricing;

• Clearer agency proposals, and visibility over resource allocation and costs;

• A determination of the appropriate fees for any given output, and a simple mechanism for variations.

Of course it is still up to the agency to deliver the great ads, but why not on a more profitable basis for both them, and their clients.

[1] Source: "Most Marketing is Bad because it Ignores the Most Basic Data", BBH Labs, December 2017 (http://bbh-labs.com/most-marketing-is-bad-because-it-ignores-the-most-basic-data/)

Valuing and Tracking the Deliverables

There is a ground swell movement within creative advertising looking to kill off time as a means of determining client fees – and there are many valid arguments and reasons in favour of this. Of course, for many notable agencies, timesheets were never in.

The buzzword is deliverables - however evaluating client requirements in the requisite detail, including the type, number and complexity of deliverables within scopes of work takes some effort, and in a time-based remuneration world, a complete rethink and overhaul of pricing strategy will be needed.

There are some fast-track ways to helping this process.

Michael Farmer, author and respected strategy consultant to the global advertising sector, has researched the concept for many years and has evolved the ScopeMetrics® Unit (SMU) [1], a proprietary measurement index for determining fees, staffing and productivity levels for any given set of client deliverables. 

It’s easy to take advantage of Michael’s research and adopt ScopeMetrics®, and we’ve been delighted to have worked with Michael on systemising his offering.

Yet, whether this particular measure is for you or not, how will you manage the deliverables within your current systems? Does your ERP[2] have the bandwidth to differentiate complexity within the same job type, or string together the multiple jobs that it may take to make up the one deliverable, that are outside set project or campaign groupings?

At Agency DNA, we’ve been implementing and supporting agency solutions, and promoting innovation for over eight years, and have solved the dilemma.

Our BizView[3] powered planning and reporting platform is already making light work of our agency clients’ reporting and forecasting processes.

Connecting to underlying ERP’s[4] and other systems, we’re joining up data, eliminating masses of spreadsheets, and reducing manual data entry points to a handful of key Excel-like templates. Data integrity and “one source of the truth” confidence is firmly entrenched.

With an accompanying SQL[5] database, we’re also holding historic data, pulled from defunct and switched-off systems, to tabulated data, such as the ScopeMetrics® database, allowing it to be easily combined and used in conjunction with live data from new or on-going ERP’s.

Scope of work detail can be compiled directly in the application through simple-to-use grid forms, or uploaded from dare I say, Excel templates we can provide. Alternatively, we can connect your ERP and pull in the relevant data, seamlessly and very fast.

Once in the application, it’s a simple process of mapping the data within what is an Excel-like environment, and in the many cases where the ERP data is deficient, supplementing this with relevant additional analysis.

The outcome is an instant calculation, including sets of deliverables extending to many thousands of rows, and presented in a neat summarised format. The reports can be filtered, by team, client down to deliverable, even shared online with clients – with access controls in place of course.

With the industry focus on finding and developing a new model for client engagement, our application allows you to test the hypothesis of deliverable-based remuneration, see from the perspective of what output your agency (or particular team) can be expected to deliver, the level of resource that should be applied to any or all accounts, and what commensurate fees you should enjoy.

We’ll happily demonstrate this for you.

If you would like to know more about us and how our application evaluates and presents deliverables, and much more, email info@agencydna.com or sign up to https://www.agencydna.com/contact-us/.

[1] Refer: http://farmerandco.com/proprietary-metrics/

[2] ERP, Enterprise Resource Management system, see http://www.webopedia.com/TERM/E/ERP.html

[3] BizView Systems AS.

[4] We’ve connected Maconomy, WorkBook and SAGE. Connections to MS Nav, AX and Xero also exist.

[5] SQL, structured query language, a globally standard language and database for programming and managing data.

What do clients want? Give them the reporting they need.

I’ve just read the article from The Drum (http://www.thedrum.com/news/2017/05/15/deloitte-could-move-acquire-engine-group-response-accentures-karmarama-buyout) suggesting that Engine Group could potentially be acquired by Deloitte. That’s some incredible journey for a group I played a bit part in at its inception 17 years ago. Equally, it makes sense in the continuing context of consultancies acquiring creative agencies.

There’s plenty of speculation on why this trend is happening, and what is means for clients and the long-term health of the creative industry.

My speculation focuses on client reporting, and why I believe these moves will be for the better.

Agencies are differentiated in many ways, people, culture, scale obviously, but operationally they are similar, and the systems and commercial data challenges mostly the same. Systems are generally in place to capture time, and agency staff grudgingly now accept the need to do timesheets.

In this context, it was also interesting to read Rance Crain’s article in the Advertising Age (http://adage.com/article/rance-crain/stan-richards-sell-path-mediocrity/309003/) on Stan Richards approach to timesheets and the case he makes for them in terms of “if they’re not filled out every day, they will not be accurate, and since time sheets drive every financial consideration, they have to be correct”.

He also brings in the inarguable concept of “respect”. Timesheets are what he requires to operate his business, and his people with respect to that need, comply.     

These exceptions aside, consultancies have always been masters of time capture – in strong competition with lawyers, with their ingrained cultures and disciplines demanding adherence, and reward (or firing) intricately tied to billable hours.

Stan is not selling – for many good reasons, but for those agencies that are selling and to consultancies, it’s likely there will at least initially be more billable hours enticed out of their pools of talent.

This might be better for short term agency profitability, particularly in earn-out years, except that many agencies are already overworked, and scopes of work largely misunderstood in terms of resources and fair pricing for work[1]. So attempts to squeeze more creative juice out of what is not a machine, doesn’t bode well for anyone longer term.  

This however wasn’t my point.

Go beyond the capture of time in agency land, and this is where their system worlds really start to collapse, and will be one of the biggest challenge for consultancies, but with upside for clients.

Clients of course want optimal results for their marketing spend, more bang for their buck and all the associated analytics that go with that.

However, they also want plain, straight forward reporting of what is being spent and where, and this is where agencies typically fail.

Many agency systems either on their own, or in the stacked combinations deployed, struggle to produce the information to satisfy agency’s own internal reporting needs, let alone for how their clients want or need their relevant information.

The networks, faced with the challenges of global client account management, thousands of discrete jobs with resourcing, production, media and material elements to keep track of, every client demanding a different set way of billing to suit their systems approval/payment processes, have spent millions in customising systems.

And yet sadly, they still simply can’t get the data out - or if they can, it’s typically jockeyed in and around multiple spreadsheets, losing data velocity and costing ever more money to compile.

I had a conversation this week with the head of brand at a major consultancy, saying how her large network agency couldn’t provide her with the basic information she needed to understand how her budget was being used. Knowing the agency, and the system they have in – this is no surprise.

Admittedly agencies are increasingly bolting on business intelligence tools, and are making brave attempts with dashboarding and distributed reports – except their challenges remain with data integration from multiple sources.

Consultancies on the other hand are filled with systems experts, with the Big 5 even now offering their own systems applications for specific sectors, such as retail and financial services, so it’s not beyond them to crack the nut of developing integrated system reports on client marketing spend.

In this competitive upward spiral, my take is agencies should take note of what consultancies are doing and mimic them, if not fully their cultures, at least their approach to their systems strategies and the importance of getting data in and out, and proactively to their clients.

Clients will be delighted, and everyone will be better off.

About Agency DNA

I established Agency DNA in 2009 as an agency-focused business systems consultancy. I have a Big 5 background, deep agency and systems experience, and we now have the people, the systems and the vision for delivering the integrated solutions that agencies need, not only for their own reporting, but also for their clients.  

[1] For an in-depth view on this, I suggest reading Michael Farmer’s aptly titled book, “Madison Avenue Manslaughter” (http://www.madisonavenuemanslaughterbook.com/).