Agency Controlling: From Theory to Practice

Do you often "follow your gut" when you make decisions? A good gut feeling is undoubtedly important and just what you need in many areas of the company. But when it comes down to controlling, hard figures are indispensable - whether in an agency, an IT company or a consultancy. We had already closely examined various typical questions in our blog post of 26 June 2015 and presented the controlling model of PROAD, our project management software, in a graph as an example.

Today, we'd like to bring this model to life with a more concrete agency example - let's call our fictional agency simply the "Smith Agency".

"Rule of thumb" planning? Not if you work with agency software.

The Smith Agency probably asks very similar questions that those that you do: which products from my portfolio are bestsellers – and are they also profitable? Has the acquisitions team backed the right lines of business? Is there a slump in the business divisions and which projects are the biggest time-wasters? The most pain-free way to obtain these figures is by using fully-developed project management software.

Industries: the sensible bundling of customers

Like many agencies, the Smith Agency has specialised in selected industries so it can stand out from its competitors by offering expert know-how. Since different industries are relevant for business from new customers, the Smith Agency's controller would naturally like to know just how profitable the various industries are. Among other things, the agency handles Wilson's Car Dealership and Compton's Car Repair Workshop as well as Fletcher's Pharmacy and Dr Sinclair, a specialist doctor.

In PROAD, the freely definable structural element "Holding" now comes to the fore: after a preliminary consideration regarding how best to bundle customers, the Smith Agency specifies the industries "Cars" and "Pharmaceuticals". Thus, the consolidated profitability of both industries can, in future, be evaluated by the controlling department (essentially the sum of the profitability of the "Customers" associated with the industry). With these figures at hand, the management can more easily decide which industries the Smith Agency should be concentrating on when it comes to acquiring new customers.

Projects and jobs: the centrepiece of an agency software programme

The Smith Agency has just been awarded the budget for the entire trade fair appearance of the Wilson's Car Dealership – a large project consisting of many small components: booth production, ad placement, invitation mailing, the website for the firm's attendance at the trade show, catering and hostesses, etc. The controller sets great store by the fact that profitability can be displayed selectively for individual tasks or consolidated for the entire "Trade Fair" project.

Once again, PROAD provides the appropriate structure: the trade fair is filed as a "Project", and the individual tasks are "Jobs" that have their own independent job numbers. Since jobs and not only projects but can also be assigned to products, business divisions and customer budgets at the same time, Smith Agency consultants can easily map the agency processes with a few clicks of the mouse, right down to the last detail.

Products: the Agency shop window in numbers

The public image of the Smith Agency, e.g. on its website or in its brochure, makes it clear what services are on offer: creation, public relations, online marketing, publications, promotions, advertisements, direct marketing etc. PROAD portrays this portfolio via "Products" to which every project or any job is assigned, e.g. the advert placed for the trade fair of Wilson's Car Dealership will be assigned to the product "Adverts". With consolidation, a report can be created for the Smith Agency at the push of a button about which products are profitable across the sum of jobs carried out – or where there are difficulties.

Business divisions: full service on the outside, nicely separated on the inside

The Smith Agency is flourishing and, as in larger agencies, introduces the usual internal units, e.g. "Print", "Social Media" and "Event". In PROAD, this agency structure is reflected in the level "Business Divisions", to which things are allocated on a project and job level – e.g. large parts of our trade fair project to the unit "Event". PROAD automatically consolidates the values, and the controller of the Smith Agency can see at a glance just how profitable the various business divisions have worked across the sum of all the jobs of the individual divisions.

Controlling vs control

We often hear from our customers that, when a controlling software programme is introduced to the company, the mood of the team ranges from scepticism and discomfort right through to open rejection. After all, agencies primarily define themselves by their creativity: this is the place where people who produce ideas and enthuse customers on a daily basis work. Far away from filthy figures. And besides, controlling sounds very much like "control" – and who likes being controlled and reduced to mere numbers?

Controlling, however, is more concerned with guidance rather than pure measurements. Controlling is geared towards goals and the future, like the navigation device in your car: the measurement of the travelling speed and the tracking of your current position alone don't offer you any added value – but it's only on the basis of these data can the satnav tell you that you will have to turn right at the next exit and drive 30 km/h faster to reach your defined destination in the scheduled time.

In order be able to actively plan the future of your agency, you need valid data. The demands made on the evaluation options of your figures are equally high – and your quality standards regarding agency software should also be correspondingly high. So that your controller is just as happy as the one at the Smith Agency.