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fp. eBook How Creative Agencies Can Accurately Manage Resources & Time

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Start learning how to make your agency more profitable!

Start learning how to make your agency more profitable!

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  • 1. CreativeAgenciesHow to accuratelymanage your time &resources
  • 2. AUTHORSIsabelle Almeida Isabelle Almeida is responsible for Marketing and Social Media at Function Point, focused on blogging and creating a community around the creative industry. Before Function Point, Isabelle developed branding and web content planning projects.Tate Lillies Tate Lillies is the VP of Marketing and Business Operations at Function Point. Tate is responsible for Marketing, Customer Retention, Product Development and Strategic Planning at fp.
  • 3. SUMMARYIntroduction………………………………...…5 Allocating resources & Being accurate.……………………………10Top 3 reasons to trackyour creative time.…………………………...16How to Get staff buy-in to time tracking………………………………19How to manage your time…………………..24Conclusion..………………………………….27
  • 4. Introduction Why should you care aboutaccurately measuring your time and resources? What is Function Point and how can a project management software help you? What you are doing wrong?
  • 5. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES Why Should I Care? There are approximately 32,000 advertisingagencies (both large and small) in the United States according toSecond Wind, an agency network. This represents approximately431,000 people working in an industry that brought in$171.7 billion1 in revenue in 2011." Given the economic importance of advertising and the creativeindustry in general, competition is intense. Each agency, especiallysmall and mid-size, has to continuously look for ways to improve oninternal workflow to keep the business going. To become more efficient and guarantee profitability, agenciesmust be able to accurately control time and other resources. For thisreason, we, at Function Point Productivity Software, have createdthis eBook to provide you with some tips on how to be precise inestimating and time-tracking, and how doing these things will result “in increased profitability. Agencies must accurately control time and other resources.” 1.  MagnaGlobal; May 2012 www.functionpoint.com
  • 6. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES What is Function Point? Function Point’s all-in-on web-based workflow software offers to your creative agency:" !  Customer Relationship !  Media Insertion Orders Management !  Invoices & Profit Analysis !  Creative Briefs, Estimates & !  Staff, Client & Vendor Proposals Collaboration !  Traffic & Task Management !  Client Extranet / Portal !  Job & Project Management !  Digital Asset Management !  Scheduling & Calendar !  Financial & Management on- !  Timesheets screen reports !  Resource allocation ! These features are integrated to help you to run a successful agency: ! Improve your Increase your Emphasize Maximize your workflow! productivity relationships profitability •  Define •  Easy to resource •  Save time & collaborate availability! •  Control focus on your with clients, deadlines and •  assign tasks to creative work vendors and expenses the right •  Manage briefs, staff people! •  Keep track of estimates, •  Provide time •  have easy jobs, tasks & valuable real- access to all resources all in time job & •  Create and information one place project send invoices you need! information www.functionpoint.com
  • 7. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES What am I doing wrong? !You and your team have spent way too much time over thepast couple of weeks working on a major project or initiative andyou dont even know whether it will be profitable at the end. Doesyour team feel overloaded? Did unexpected events make youover-run your budget? Were other projects delayed because ofthis? If you answered yes to any of these questions, understand that these are typical challenges within the agency world. You are not alone! Reviewing how your agency manages time is essential.Even if you don’t like to admit it, the product you are selling isyour time, so proper management of this resource is critical if youwant to run a profitable business. Determining what your pricingstrategy is, estimating accurately and assigning the appropriateresponsibilities across each department in your organization canmean the difference between a successful business and one thatis toiling on the verge of bankruptcy. www.functionpoint.com
  • 8. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES !The lifeblood of any advertising or creative agency is winningnew business from both existing clients and new clients. Toachieve this it is not only necessary to create fabulous campaignsand creative design or ads, but you have to ensure that the workyou do results in profit for your agency." The purpose of this eBook is to give insights on how youcan make your workflow faster and maximize your profitability.The tips presented in this whitepaper will help you: " 1. Create accurate estimates 2. Manage and track your main resource - time“ Ensure that the work you do results in profit for your creative agency.” www.functionpoint.com
  • 9. Allocating resources &Being accurate 3 tips to create estimates How to measure the actuals Type of costs and expenses
  • 10. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES In a competitive business environment, creative agencies of alltypes (new media, digital, advertising, branding, marketingstrategy, design etc.) need to ensure that they efficiently allocatetheir resources and accurately build estimates for new projects. Thiswill help you both increase your profitability and build a goodreputation at the same time. Being accurate means determining the right number of hoursthat will be spent and an appropriate rate to be billed. A precisebudget will help protect yourself against any unexpected events thatmay delay a project or cause budget overruns. How do you tackle the task of creating an estimate when thereare so many unknown variables? We all know that last minute clientchanges come up frequently, staff may not be available, you mayhave to outsource work you didn’t plan to or other additionalexpenses pop up. We do have some suggestions for you though.“ Being accurate means determining the right number of hours that will be spent and an appropriate rate to be billed.” www.functionpoint.com
  • 11. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES 3 tips to building accurate estimates!1. Start with your timeline or schedule:  Factoringin all of the time that you anticipate spending on internal to-do items/tasks for every step of the job will help you calculate the totalnumber of hours that will be spent on the job.  Often the itemsshown on the client facing estimate are the big picture buckets oftime or steps to complete the work.  So, putting together a timelineor schedule that shows all of the internal to-do items will help youcalculate the total number of hours at each step. If you haveinformation from previous similar jobs, it can be used as a start pointto create the new schedules/timelines, which makes the processeasier.2. Role rates:  Have different rates and estimate your workaccording to who will be doing the work. You might not know whichdesigner or developer you will have working on a component of ajob, but estimating whether it is a junior or senior person will have ahuge impact on the estimate total. A project management softwarecan help making all these calculations quickly.3. Terms:  Whether you invoice your client based on theestimated amount of time, the actual amount of time spent on thejob, or a combination of both, it is important to include appropriateterms and conditions that will protect you from inevitable over-runsand scope changes.  Include the time period the estimate is valid forand details about how variations or scope additions will bedetermined and priced.  Lastly, it is advisable to include the estimatetotal is "subject to change". www.functionpoint.com
  • 12. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES To have a good estimate you have to understand the rhythm ofyour business. For this reason you need to look at past jobs andprojects to analyze what your agency can do in a certain period oftime and what you can promise to your clients. You already knowthat not living up to your clients’ expectations will make themunhappy. Therefore, it is important to compare your estimates with youractuals to confirm that you will really succeed in achieving theexpected profit. This data will be required to help you build betterestimates in the future as well. For example: if you assume that atask takes 2 hours, when it really takes 4, that could meanthousands of dollars each year never being realized, making apotentially profitable account into a money losing relationship. “ You need to look at past jobs and projects to analyze what your agency can do in a certain period of time and what you can promise to your clients.” www.functionpoint.com
  • 13. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES So, how do I measure actuals? The first step is understanding your agency’s true costs and expenses. You can make this much easier on yourself by keeping them all organized in one place. At Function Point, we classify expenses and costs in three ways: " 1. Internal Services: These are fees that you typically charge an hourly rate for or at least track time against. Even if you do not bill your clients based on time, each internal service should have a billing rate to match the value of your time and effort. Keep in mind that you should always be justifying the rates you charge (even on flat rate jobs) based on the amount of time that the work takes. Otherwise, you might end up spending many more hours than you are charging for, resulting in very low overall profitability. 2. Internal Expenses: These are items that you purchase as inventory and sell back to your customer, generally at a fixed price per item. This can be with a flat rate mark-up or at cost. Internal expenses usually apply to a physical item, but can also be used for things like mileage that get charged at a flat rate to a client. 3. External Expenses: These are expenses that you incur and charge back to your client, such as printing or courier services which have been outsourced to an external vendor or supplier. You can charge your client a percentage mark-up on the amount you have to pay your vendor. www.functionpoint.com
  • 14. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES So far you will notice that the main expenses that you have inyour firm are employee salaries (since intellectual capital – thecreative work - is your biggest asset). Herein lies the importance oftime tracking – you need to know which jobs or projects makemoney (and alternatively, which one’s don’t), and which clients arethe most profitable to you. The analytical data that a workflowmanagement tool can provide (if the information is being enteredproperly) about different elements of your work will be invaluable inincreasing your agency profitability. You will be building betterestimates and charging your clients much more accurately. There’s nothing like time sheet data to better scope out yourfuture work. Youll see rapid improvement in accurate milestonesetting, and put yourself in a position to meet and even exceedclient expectations. www.functionpoint.com
  • 15. The Top 3 reasons to track your creative time Reasons to track time according to different perspectives
  • 16. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES We see plenty of agencies and creative businesses who do not see the benefit of gathering, storing and using the data from time sheets and how precious this information is, even though it is extremely easy to record your hours using a time management software. " " " Timesheet window on the dashboard of Function Point Productivity Software, an easy and accessible way to enter the time spent while working on tasks Next we will present the top 3 reasons to push yourself andyour team to use a system to track time.! www.functionpoint.com
  • 17. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES Finance • Even if your creative agency charges a flat fee for jobs, it is essential to know for sure if you’re charging enough, and consequently, how profitable you are.  Your business makes money by selling creative time. Tracking how much time is spent and how much you actually charge per hour of work will ensure that you know exactly how close your price- point is to your break-even. This will give you the proper insight into developing better pricing strategies and a competitive edge when positioning your agency in the market. Remember going above and beyond client expectations is part of your survival, but money is king.  Tracking time is the most informative indicator of how to better operate your business.! Management • Do you need more staff? As a department head, or traffic manager, how will you show that you are overloaded, without a pile of time sheets to back you up?  You need to have a clear understanding of your teams availability for the next few weeks in case a new job comes on board and make more precise decision about hiring. Resource management is crucial in answering a simple question "Who is available next week to create the artwork for our new client?". Knowing that, we will have the right information to know how many projects you can handle without compromising your quality standards and budget.! People Management • Enable your staff to shine. The data you can glean from time sheet reports will enable you to see who excels where, and who might be your best choice to assign certain tasks to. Get your team working smarter, not harder. Moreover, if your team becomes better manager of its time, it will also be more focused. Knowing that at the end of the day you need to account for what you’ve been up, you’re much less likely to get off track with legitimate tasks like research, or with other distractions..." ! www.functionpoint.com
  • 18. How to Get staff to track time The ultimate guide for time-tracking buy-in What you should know about timesheets What makes the process of getting timesheets from the team easier What constitutes a good timesheet
  • 19. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES Working with creative agencies, fp. staff often come across thefear that proper planning and time-tracking will kill a culture of creativity(or at least make it seem like that’s what management is trying todo). “We sell our expertise and the final product, not the amount of timethat it takes us to produce it” is a standard argument that we have beenhearing. Nobody wants to feel like “big-brother” is watching. Getting into the habit of tracking time and using this information toplan future projects should be about teamwork and building youragency to focus on your core competencies (i.e. what are you best at,what do you enjoy doing, and what types of work are most profitable foryour agency). www.functionpoint.com
  • 20. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES Be clear when communicating with your staff about time sheetsand ensure it does not become a harsh task. Take some time explainthat:1.  Tracking time allows you to focus on client work and does not necessarily equal payroll hours. It gives you the opportunity to analyze each job you are spending time on, who your profitable clients are or what type of work you are best at – these are the keys to long-term success.2.  Planning and tasking does not have to mean micro-management. Make it clear to your staff that tasks are meant to ensure that each individual has the time to be creative. Creating project or job schedules and tasking work out means giving your agency resources (i.e. staff) enough time to focus on their deliverables and do their job well. 3.  Focus on the quality of work that your staff does and not on the amount of time it took. Time tracking does not mean judging staff performance by time spent on task. Your goal as an agency is to get better at estimating how much time quality work will take and bill “ accordingly. Tracking time allows you to focus on client work and does not have to equal payroll hours.” www.functionpoint.com
  • 21. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCESWhat makes the process of gettingtimesheets from the team easier? The most important thing is for the CEO and/or uppermanagement of the organization to do timesheets and to believe inthe importance of tracking time. If this is not the case, the battle isalready lost. Once the CEO and management start doing theirtimesheets on a consistent basis, the rest will follow. There has to bean easy mechanism to do timesheets and also for management toeasily audit timesheets by date / employee / project / company etc.Having this will allow the management team to “remind” employeesabout missing timesheets. It is all about having proper data.!Timesheet Find mechanism in Function Point Software. Function Point is a company where the owner of the company believes intimesheets and understands their importance. We have been doing timesheetssince day one (February 17th, 1997).! www.functionpoint.com
  • 22. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCESWhat constitutes a good time sheet?! A time-sheet should include the description of the workdone and the duration. Start times and end times are optional. It is not just important to enter work time, but vacation time aswell since when someone is out of the office, your team’s capabilitieswill be reduced. Most agencies have a process in place for thesubmission of vacation requests. We recommend creating a budgetof paid time off that represents the number of vacation hours.   Forexample: if a person has 2 weeks of vacation time available in theyear and they work 40 hours per week, the task should have abudget of 80 hours. When the staff person goes on vacation, theyenter 8 hours against the budget for each day that they are gone.This helps both administration and the staff person to know howmuch vacation time has been used and how much is still available.Days off should also be entered in the agency’s calendar, since youdont want a traffic manager accidentally assigning tasks to adesigner whos going to be away, particularly at a key time in aproject.! TIP Having a vague timesheet description such as “Made changes in sample” does not help anyone. A better example would be “Made changes in sample A for logo 1, client X”. Although having the description of those tasks may be considered going overboard by some, it is important information when someone wants to further investigate how time is spent and get more precise metrics about the work. www.functionpoint.com
  • 23. How to manage your time 3 time saving tips for the busy advertising or creative agency
  • 24. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES Tracking time is not enough, you also have to manage the hours you have. Professionally and personally, time management is an issue, especially these days with so much going on that can distract you and make you lose your focus. As hard as we collectively wish for more of it, there will only ever be 24 hours in a day.  The good news is that there are a few simple changes that any agency can make to free up valuable time and, more importantly, cut down on frustration. Next: 3 time saving tips for the busy advertising or creative agency www.functionpoint.com
  • 25. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES Have priorities and set goals •  Tasks have different degrees of urgency and importance. We usually do not have enough time to complete them all, so prioritizing them according to your established goals is essential. Get your essential admin tasks (required but unbillable) out of the way quickly to give yourself more time for billable creative work. Ensure that you have the tools available to make these admin chores as efficient and useful as possible. Remember, billable time is where you want to be! Have a single source to capture all job information. •  If your desktop is a mess, it is time to look for a more efficient way to manage projects.  One of the biggest time wasters is chasing and waiting for information.  Add having to go through multiple sources for simple job information, and you are probably two clicks away from a nervous breakdown, plus you haven’t even “checked-off” any items in your to-do list!   Not having access to current account information can negatively impact every decision you and your colleagues make.  So, what is the solution? Have one system in place that the entire agency uses to capture job information from proposal to invoice.  Workflow management software will allow you to cut down on time wasters and have all the account information when you need it. Minimize the gaps between one phase and other •  Some tasks or jobs need to get approval before going any further. Waiting for permissions can delay your work, particularly if you need to set a live meeting. Each person has his/her own schedule to adhere to, and waiting for a meeting to (possibly) get an approval disrupts the workflow. We strongly recommend using available online tools to promote collaboration amongst both clients and staff. www.functionpoint.com
  • 26. ConclusionThe importance of what you learned reading this eBook
  • 27. HOW TO ACCURATELY MANAGE YOUR TIME & RESOURCES Efficiently allocating and managing your resources is keyto running a successful agency. Monitoring these resources (i.e.planning and tracking time) will help you ensure that you are workingon billable items and creating more accurate estimates in the future.This will allow you to build consistent price models and, ultimately,improve your profitability. Poorly managed agencies are generally far from beingproductive. Surprisingly enough, we still find many types of creativeagencies managing their projects manually, which contributes to alack of control and project visibility. Timesheets, often regarded as anannoyance that disrupts the creative process, are a valuable (wewould say essential) source of information. Don’t worry though, thedreaded time-sheet can be completed quickly if you have a user-friendly way to do so (such as an integrated project and timesheetmanagement software system). Finally, remember to keep your focus in the creative process,but never forget how the bills are paid and where paychecks comefrom. Planning activities may not be the fun side of thebusiness, but you need to have control of your estimates andtime to ensure you are able to focus on your corecompetency of creative work." www.functionpoint.com
  • 28. Looking for a tool?If you’re interested in learning more about howfp. can help you improve your workflowprocess please request a demo and one of ourknowledgeable account executives will be intouch. www.functionpoint.com

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