Agency Management, Operational Excellence

Why Agency Holding Companies Need to Standardize Their Software

by Esther Cohen, February 14, 2019

Software standardization can help agency holding companies improve their operational efficiency and productivity. Learn why it's important and how to go about it.

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In early 2015, Publicis disbanded its programmatic agency trading desk, VivaKi. The 100 or so VivaKi employees were soon spread across Publicis' agencies where they joined client-facing teams.

The reason? As former ZenithOptimedia CIO John Nitti said, "Clients like having the programmatic folks as part of the same team".

The keyword here is ‘same team’. It underscores the broad changes taking place at agency holding companies. Where once holding companies would collect agencies and pit them against each other, the modern market demands collaboration, not competition.

And to succeed in this collaboration-first world, you need software that is standardized across all your agencies.

Software standardization isn’t just a competitive advantage in 2019; it’s a necessity for agency holding companies. I’ll discuss the whys and the hows below.

 

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The New Agency Holding Company Playbook

It's no secret to you that the way agency holding companies operate is changing.

The first instigator of this change is the nature of the agency business itself. Digital has fundamentally transformed how clients interact with their agency partners. Speed and cross-domain knowledge are crucial, not just localized expertise.

It's not enough to be good at creative or data; you have to have both tempered with a good deal of operational excellence.

The second instigator of this change is competition. The question for clients used to be "in-house or agency?" Today, it's "in-house, agency, or consultancy?" Deloitte and Accenture already have an in at your top clients. And unlike you, they're not encumbered by the organizational chaos that usually goes with agency holding companies.

 

 Consulting companies are eating into the agency revenue pie, as this table shows

The final instigator is the other competitor - tech companies. Facebook and Google might not be chasing the same clients as you (though they both have growing in-house agencies), but they sure are pursuing your creative talent. Not only are they beating you on salaries and perks, but they also offer something millennials employees particularly crave: collaboration.

 

 (Image source)

At Facebook, a designer doesn't have to wonder what best practice secrets are locked away in another department; she can share and collaborate freely.

At agency holding companies?

Not so much.

 

New Models, New Priorities

Traditionally, agencies would win clients. Holding companies would support them with resources and clout.

But in this new competitive landscape, clout doesn’t count for much. Clients don’t want to hear how many agencies you own; they want solutions to their problems. They can’t waste their time dealing with the complexities of your own business.

These new market realities require a new approach to the holding company model. Since your clients demand cross-discipline solutions, you can’t let expertise be locked away in agency silos.

As WPP’s Martin Sorrell writes in Harvard Business Review:

“We recognized that our largest clients don’t necessarily want to choose a single agency; they want access to the best talent and ideas from across the group. So for each of our top 45 clients, we have one executive who manages the relationship and taps resources from a variety of agencies.”

In this new model, agencies still compete for accounts and retain their unique cultural identities - clients like that local touch. But they also act as collaborators, sharing knowledge, best practices, and resources.

If a client needs a resource one agency doesn’t have, an account manager should be able to procure it from another agency in the holding company.

Consider this a prerequisite for thriving in the post-digital world.

At the same time, you have to eliminate inefficiencies and bureaucratic bottlenecks. When your competition is moving fast and breaking things, you can’t let poorly integrated infrastructure stop you from responding quickly.

 

 

Thus, your priorities moving forward should be:

  • Collaboration and knowledge sharing
  • Removing operational inefficiencies
  • Smoothening bureaucratic speedbumps
  • Integrating operations across all your agencies

The key ingredient to all of the above is the same: standardized software. When all your agencies have the same software spine, they’ll be able to work better and faster.

 

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How Software Standardization Changes the Game

As Marc Andreessen once famously said, “Software is eating the world”.

You, of course, know this intimately. You’ve already seen the incredible value good software can unlock in any agency. From billing to task management, there is little that software can’t improve in an agency’s operations.

But as a holding company, you have a unique challenge: disparate systems.

Agencies in any holding company’s portfolio are all founded at different dates and with different underlying approaches.

Their systems, thus, rarely align. The 30-year-old agency might use an ancient legacy system. The 5-year-old might use the latest SaaS tools.

Unless all these systems talk to each other, cross-agency collaboration becomes incredibly hard.

This is precisely the problem software standardization seeks to solve.

By using the same software and management principles across all agencies in your portfolio, you can unlock knowledge and remove inefficiencies. Data doesn’t remain funneled away in silos; it can be used by everyone, everywhere.

Some of the biggest benefits of software standardization for agency holding companies are:

1. Offering global-ready solutions

Your clients don’t want to succeed only in their local markets; they want to win globally as well.

By adopting a uniform software system, you can help different agencies share local knowledge. Thus, an NYC-based social media marketing agency can show a Mumbai-based agency what it takes to succeed in NYC, and vice-versa.

This knowledge sharing makes it possible to offer global-ready solutions to clients - something consultancies are already doing.

 

2. Bring higher value talent closer to clients

In the traditional agency holding company model, high-value talent - data scientists, strategy consultants, etc. - would remain locked away in trading desks and “centers for excellence”.

However, clients today want such high-value talent closer - complex digital-first business demands it.

By using standardized software, you can integrate your agencies much better. This enables high-value talent to move across agencies and closer to clients.

As an added bonus, higher-value talent can open up new conversations about pricing. The FTE of a data scientist is much higher than a graphic designer, after all.

 

3. Share data and best practices

What’s the benchmark CTR for a social media campaign for a luxury goods brand? How does it compare to the same for a real-estate firm?

To answer questions like these, you need first-hand data. Moreover, this data needs to be accessible enough to be used by anyone across your agencies.

This isn’t always possible with disparate systems - at least not without significant wrangling. But with standardized software, you can make data (and related best practices) more shareable and thus, more actionable.

 

4. Offer an industry-standard work environment

It’s no secret that agency talent is catastrophically unhappy. More than a third of ad agency employees say that their morale is “low” or “dangerously low”.

 

 

While poor salaries are often to blame, you can improve morale greatly by offering your people a modern work environment.

One aspect of that is furniture, equipment and office space. Another is software. Employees at that hot Bay area startup get to use the latest SaaS tools. Your employees should too. It will ensure that not only are they more productive, but that their work environment is at least at par with modern companies.

 

 Better talent demands better tools, according to a Dell survey. (Image source)

 

5. Reduce inefficiencies

Does it take you hours to wrestle financial data from your PM suite and send it to your accounting department? Do your account managers waste hours hunting for templates? Do projects often suffer because no one has any clarity on client requirements?

All of these are features of disparate systems. When insight is locked up in multiple tools that vary from agency to agency, bureaucratic hurdles invariably crop up.

By standardizing software across all your agencies and departments, you can ensure that all your systems “speak” to each other. This will help you reduce inefficiencies and move faster.

 

6. Improve security

In 2019, you can’t take data security for granted. Software companies realize this as well - Adobe released 71 critical updates in a single month to make sure that its software is secure.

When you have a fragmented software system across all your agencies, IT has to work overtime to keep everything updated and secure.

Switch to a standardized software suite, however, and you have to worry about updating just a handful of tools, not a massively fragmented system.

 

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Implementing Software Standardization

Switching from a bunch of disparate systems to standardized software is neither easy nor quick. In fact, this topic is vast enough that it deserves a separate blog post.

For now, I’ll cover the primary challenges - and their solutions - in standardizing software across your agency portfolio.

1. The software-process fit dilemma

Every software enforces its own workflows, processes, and best practices. Some of these will inevitably clash with your current processes.

The question you have to ask is: should you change your processes to fit the software, or vice-versa?

The right answer is “both”.

You can’t really succeed at any software implementation if you don’t switch your processes to fit it. At the same time, you can’t change your processes too drastically - you’ll just end up losing productivity.

My recommendation is to choose software that is specifically designed for your industry. If you use software made for the IT or finance industry to run an agency, you’ll just end up with too many non-familiar processes.

On the other hand, if you use a tool like Workamajig, you’ll have a system that was built from the ground up to support industry best practices.

Not only does this ensure that everything is familiar, but it will also help your agencies bring up their processes to industry standards.

 

2. Document everything

In an earlier guide, we wrote about the four steps involved in business process standardization (BPM):

 

 

Switching from disparate systems to standardized software requires a similar focus on documentation. To know what you have to standardize, you first need to know every single system and process your agencies use.

This includes, but isn’t limited to documenting the following:

  • Software used by the entire agency or the agency holding company
  • Software used by specific departments and teams in specific agencies
  • Ad-hoc software deployment, within teams, departments, or entire organizations
  • Processes and tools for storing and retrieving data
  • Processes for sending data from one tool/system to another (such as PM tool to accounting)
  • Access controls for different systems
  • Organizational hierarchy and how each role is connected to different systems (say, accountants use Quickbooks and have read-only access to the PM system)
  • Onboarding processes for different systems

This can be an enormously challenging exercise, especially for large agency holding companies.

However, consider it a necessity. Not just for standardizing software, but also for understanding and improving your operations.

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3. Keep your organizational structure in mind

It’s rare for the constituent agencies of a holding company to share the exact same organizational structure. Even when the underlying structure is the same, there will be variances in roles and responsibilities.

As roles and responsibilities change, so do the tools and tactics they use to get their job done. A manager in a leadership role (such as a “Brand Leader”) will use software differently than someone in a more hands-on managerial role.

You have to keep these variations in mind when undertaking any software standardization exercise. Thus, for all your agencies:

  • Draw out their organizational structures
  • Map all their constituent roles and their responsibilities
  • Understand the tools, processes, and software they use to perform these responsibilities

Your goal is to standardize responsibilities in such a way that similar roles can use the same software. This transitioning process can be painful and can result in a loss of productivity. Make sure that you have sufficient training and support to smoothen the switch.

For instance, if you’ve decided to go with Adobe Creative Suite across all your agencies, you’ll want to draw up a transitioning plan for your Sketch-using designers.

 

Over to you

Software standardization is neither quick nor easy. There is substantial legwork involved in understanding how your organization uses software and how to standardize it. The larger your portfolio of agencies, the more variations you’ll have.

The key is to retain each agency’s uniqueness while bringing “sameness” to their operations. You want to give clients a local flavor, but at the same time, operate more efficiently.

If you’re looking for a management system, give Workamajig a try. Workamajig’s agency-focused system is perfect for holding companies that want to standardize operations across all their agencies.

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About The Author

Esther Cohen

Esther, Workamajig’s current Marketing Manager, joined the team back in ‘14. She's a Jersey girl at heart with plenty of NY grit from her time across the river. Like most credentialed marketing gals, she’s always got a good cup of coffee and would love to hear from you at estherc@workamajig.com.

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