How To Use Technology To Scale Your Agency
Regardless of what your agency focuses on – marketing, branding, advertising, media – growth is a crucial part of ensuring your business stays relevant and profitable.
Agencies that don’t grow can become stagnant, fall behind competitors, and lose touch with the desires of their clients. That doesn’t necessarily mean that every small firm should try to become a giant in the industry, but that successful organizations scale to meet increasing demands and greater competition. However, effective scaling is challenging because it calls for appropriate growth strategies on a department by department, and sometimes even person by person, basis. When done incorrectly, businesses can quickly become misshapen, with less effective processes, higher operating costs, and lower client satisfaction.
As demand from customers and demands from talent become more volatile than ever, it becomes that much harder to manage agency operations at scale using the tools many businesses have at their disposal – point solutions that focus on task collaboration, front and back office suites that fall short on client-facing project execution, and of course, spreadsheets. Thankfully, the status quo is changing – your business can now tap into purpose-built SaaS technology that has been specifically designed for the unique needs of agencies, ensuring teams are equipped to overcome key operational challenges and build a clear path to scalability and sustainable growth. .
In this blog, we’ll consider what the biggest scaling challenges facing agencies are, and how the right technology can help keep those challenges at bay and keep your agency ahead of the curve.
5 Major Scaling Challenges and Technology’s Answers
Challenge #1: Poor Cash Flow
If you think of your business as a body and each department as an essential body part, then cash is the blood that pumps through each area to keep everything healthy and operating optimally. Scaling requires financial investment that should, when done right, create a strong return on investment. This means it is essential to be able to consistently bill for the work you do and reduce disruptions to cash flow like billing errors that might limit or waste your investments. This can be a challenge in an agency setting, where creatives often bristle against the processes that prevent revenue leakage and margin erosion like time capture.
In the worst case scenario, lack of compliance and governance can hinder cash flow enough that a business may struggle to meet their payroll obligations. It is important for agencies to ensure that creatives have the context they need to make decisions that preserve profitability and ensure that the business is in a position to scale in line with client demand.
Solution: Using a purpose-built solution that integrates project and resource management with financial management will help you better understand the cost and revenue implications of decisions, reduce revenue leakage, and accelerate cash flow. With these insights, your agency will be better able to hit revenue targets and ensure a strong enough cash flow to make impactful investments in the future of the business.
Click here to see how Boncom, a full-service advertising agency, reduced billing rate errors by 100% after adopting a solution that enabled them to consolidate time tracking and project management within one holistic platform.
Challenge #2: Scaling At The Wrong Time
Your business does not exist in a vacuum. While it may be tempting to scale aggressively as soon as it seems your company needs to expand, there’s a right and a wrong time for growth. Is profitability stable in your business or is this a temporary increase in demand you’re experiencing? Have you created a strong business model and created a set of offerings that are the right fit for the market? This is important context to understand in order to ensure your business has a stable foundation for growth.
In addition, it’s important to know whether the market conditions around you are favorable and compatible for growth, as well as what forecasts indicate about new opportunities or if a potential recession is up ahead. Scaling should be done in lock step with true market demand over the long term so that your expansion and its associated increased costs will be met in turn by greater profits. This is where dependable forecasting based on market trends and sales pipeline comes into play so that you can make the right decisions.
Solution: Having a reliable forecasting solution will help you understand the long-term demands experienced by the business instead of just short-term needs. These solutions should integrate with the data generated throughout your business for a trustworthy prediction of company performance for well-timed scaling.
Click here to see how customer experience-focused agency Hero Digital achieved 90-day financial forecasting accuracy with a modern technology solution that aligned core EAC and revenue metrics with business processes.
Challenge #3: Misaligned Business Processes
Your business processes, inclusive of everything from the sales pipeline to payroll, needs to be managed in a manner that takes into account the current size and shape of your company. As departments grow, new offerings and working practices are added, and daily work needs shift during scaling, your business processes can become misaligned and outdated if they aren’t updated to shift with the changes you’re making.
These now-misaligned processes can lead to project delays, lost productivity, mistakes in billing, errors in task assignments, and poor communication with clients. As you scale and add new roles, processes must change alongside the people who use them.
Solution: By having your processes managed in a project management solution that can drive the entire project lifecycle – from scoping to staffing to delivery to billing – rather than relying on disconnected systems or even just the minds and manual labor of project managers, you can make detailed adjustments to workflows that are quickly adopted across the company. This ensures that new ways of doing business in accordance with scaling best practice are adopted and maintained.
Click here to learn about Huge, a digital agency that was able to streamline their business processes across a global workforce and increase visibility and coordination across teams by moving their data out of siloed spreadsheets and legacy solutions and into an integrated solution that connected Salesforce with a project management solution purpose-built for agencies.
Challenge #4: Trimming Down While Scaling Up
Scaling doesn’t necessarily always mean headcount growth. Instead, scaling can mean adapting to shifting needs by restructuring, adding where needed, and deprioritizing efforts that are not as important anymore. Shifting client demands may mean that certain offerings and services are no longer in demand, and your business needs to be agile and responsive enough to see that and make changes accordingly. Bigger is not always better.
Of course, reshaping teams and eliminating service offerings should be done with as much care and consideration as expanding and adding roles. When done right, your company will emphasize its most profitable areas and trim down on what’s wasting money.
Solution: A strong resource management system will show you the correlation between billable utilization rates and profitability, and how that relationship is changing as you scale your business. Don’t just look at the average utilization for your business – analyze utilization by team and by resource to understand where team members might be burning out or languishing on the bench. This will help you make changes that balance utilization and ensure that every billable resource on staff is contributing to the profitability of your agency. .
Click here to see how web design and digital marketing agency Proclaim Interactive drove a 20% improvement in utilization while increasing average revenue per client by 255% by adopting a resource management solution with detailed utilization reporting and time tracking capabilities that gave business leaders the insights they needed to make company-wide strategic improvements.
Challenge #5: Scaling At The Right Speed Across the Business
Since getting bigger isn’t always the solution to increased demand for your services, it is important to know whether agency expansion should take the form of hiring and onboarding more full-time or part-time employees, or increasing usage of contractors.
Also, consider the effect that bigger teams and changes in business processes will have on the rest of your organization. It’s likely that at a certain point in scaling client-facing teams, internal departments like human resources and finance will need to scale as well to appropriately serve the needs of larger teams and a larger portfolio of services. All of these factors need to be considered during the scaling process.
Solution: Modern technology built for agencies can help identify bottlenecks and communication issues within your organization by providing capabilities surrounding Gantt charts, burn rates, and other project measurements that are directly connected to tasks and their assigned resources. Use these insights to pinpoint where scaling is truly needed for both internal and client-facing teams for a measured response to the call to scale. The result is informed, profitable decisions.
Click here to see how adopting new technology gave business leaders at ORM, a DCX Agency, “eye-opening” clarity that enabled them to solve problems they didn’t even know they had, all while reducing administrative task time across the company by 30%.
Kantata Can Help Your Business Sustainably Scale
The Kantata Cloud™ for Professional Services is designed to give agencies in-depth insights into every aspect of their operations, as well as the complete control needed to make meaningful adjustments that set teams and clients up for success. Learn more about how Kantata can help you manage agency operations at scale, ensuring that as your business grows, your teams have the tools they need to do what they do best – even better.