An accurate scope of work is one of the toughest challenges for agencies to get right.
Enter new agency tool Scope. Could it be the answer agencies have been waiting for?
We talk about Scope, all the time on our social channels. But what is it? It is the first product by The Virtu Group and it’s a brand new genre in operational software for our industry.
It is still building momentum here in Australia. So, we are taking ten to ask our founder, Helen Johnson, why she’s so keen on the product, and why she has partnered with them here in Australia.
I have never really heard of software like this before, can you be more specific on what it is?
It is basically a huge stack of agency data with ongoing anonymized feeds from various cloud-based agency systems. On top of this data, is a revolutionary algorithm that crunches the numbers and shows an agency what the current market value of their job is, based upon the criteria they enter.
For example, I type in that I want to deliver a large website. It will show me the average sub-deliverables and components people are charging for, the hours they charge for, and the average costs of these. Of course, you can then edit the scope of work (SoW) to match your needs. You can then collaborate with stakeholders on the SoW, and the system then coaches you through the production of the SoW document for the client.
Why does it appeal to you so much as a concept?
First of all, it is worth noting that around a quarter of the current data (millions of jobs) is from agencies right here in Australia. Further to that though, I would like to take you on my journey with the product so that you understand why I am so passionate about it today.
I spent a couple of days with Tracey Shirtcliff, founder of The Virtu Group, back in late 2015 looking at the early stages of the system. When I first looked at the product, maybe because it was a brand new concept, but most of all because I love details and problems, I had to really get my head around the data it was showing me. If an odd role (i.e. Analyst) cropped up in Concepting, or if, for example, I saw a Junior Art Director on a similar charge out to a Mid-Weight I couldn’t quite resonate logic with this.
I kept using the system and asking questions, and whilst I understood it could save time and was a good estimate starter, I couldn’t quite visualise its use in practice. Then whilst on a couple of multi-national agency implementation projects, it all started to click into place.
I was spending a lot of time working with agencies who were using deliverable based rate cards as an approach to value pricing. The challenge was that these agencies were losing money on these rates because their value based prices were too polarized from both what it took to do the work and what the actual market value was for what they were delivering.
We couldn’t get to the bottom of why these prices had been set and what the scope of the deliverables was in relation to the price. From here everything began to make sense; anomalies are what we want to see – they validate the very real and very creative nature of an agency in tackling a brief. Not only this, but if these agencies were using Scope, they would be fully equipped to negotiate a better rate, or to deliver on a reduced scope of work.
So, nearly two years later, having dwelled on it through many more implementations, here are the things I really love about Scope…
1. Scope should give agencies cutting-edge insights of new, emerging agency roles materializing in agency quotes. It also gives a real insight into how often they are being charged and how much they are being charged out at. Over the last 15 years, the makeup of agency creative, strategy and tech departments has changed vastly and there is nothing to imply this shouldn’t continue to be the case. Scope gives agencies a lens on this in order to stay ahead of the curve.
2. Next is the hourly rates. I will get to the value based pricing shortly, but in the meantime, we cannot expect that we will lose all focus on hourly rates and costs; people will, of course, continue to cost agencies by the hour. There is no need to explain why benchmarking hourly rate cards against bona fide industry averages is an incredibly useful tool.
3. Components in Scope show you the type of deliverables people are including in their quotations for your type of job, and how much the deliverables cost. A Scope can only be made up of its deliverables. This means that your most junior person can see all of the steps that may go into delivering a certain type of job and it prompts them to think much harder about the scope of the work your agency will be delivering. It then creates a different, more confident conversation with the client.
4. Scope is a great way to execute against a value-based pricing model. It is showing you exactly what the current market value is for these types of jobs. I won’t do this as much justice as Matt Hyde from BMB and Cheil in London, so take 5 minutes to watch the video and hear first hand from an agency CFO.
3. How do you see it working day to day in an agency?
This is an interesting question, and one I talk about a lot. Of course, all SoWs can be created through the tool and then, depending on your PM or ERP tool, could even be pushed in to create a job once approved. Here in Australia, many agencies use both Accountability and Deltek TrafficLIVE, both of which have an integration.
I don’t see Scope as limited to this though. Ongoing benchmarking exercises for clients will be hugely simplified overnight and the creation of new rate cards or quoting for new services can be done with vastly increased confidence. Additionally, many Management reports would benefit from insights from Scope as a measure against the agency’s pricing performance data.
4. What is the nature of your partnership with Scope?
We are the distributor for Australia & New Zealand. This is the first relationship of this type that we have made, and we have felt enabled to do this by the unique nature of the Scope product and The Virtu Group’s approach to the market. The Virtu Group, like Tangram, are committed to being agnostic where it comes to project management and ERP solutions and plan to integrate with as many of these tools as possible to be the instigator of proposal data.
In summary, because of their agnostic approach, our belief in their founder and our passion for the product – this was a no-brainer partnership.
Helen Johnson is a Business Systems & Workflow Consultant and the Founder of Tangram.