Has Your Agency Tried Scenario Planning?
As a manager at a digital agency, you’ve probably done resource planning, project planning, financial planning, and forecasting. To do that, you mostly rely on past data, but that doesn’t always guarantee you’ll plan the best outcomes.
The nature of an agency’s work often consists of a complex web of factors. Project management is a challenge for almost every agency out there. You constantly need to balance expenses, budget usage, and your team’s availability.
Even if you’re an expert at creating financial projections, spreadsheets quickly become an inconvenience. Then there’s the fact that your data is all spread out: you have a tool for time tracking, a task management platform, resource management in another place, an invoicing software.
Wouldn’t it be ideal to know—with a high degree of certainty—that a project will end up successful? And wouldn’t it be great to have that information available at your fingertips?
Let’s Walk Through a Typical Agency Scene
What are all the things that come to mind when trying to figure out the best possible outcome of a new project? Surely timelines and deadlines, expectations around profitability, factoring in unpredictable hurdles with technology, teammate utilization, vacations, use of pre-defined budgets…and the list goes on.
Using resource planning and forecasting tools, you can set up a good stage:
- You’ll predict when your team will work and for which rates.
- You’ll know how much of your budget should be spent on a weekly basis
- You’ll probably be able to plan other projects at the same time too, because you’ll need that same team to simultaneously be creative and operational on other client work.
- You can even factor in a 20% buffer in that timeline, just for sake of scope creep.
- You’ll know how much profit you’ll see from this project.
Still, all those predictions won’t give you a clear, overall answer to the simple question: which scenario would really be the best for this project, for our agency?
Introducing Scenario Planning
Scenario planning can help you prepare for different possible futures instead of trying to guess what will end up happening.
Planning different potential outcomes or “scenarios” is beneficial in rapidly changing environments. It opposes uncertainty with clarity, ensuring more profitable projects, happier clients, and greater overall success. But let’s take a dive deeper.
Initially developed for military strategies, scenario planning is a concept that offers alternative views of how the future can unfold.
Let’s say you can look into recent project data to understand the impact of the decisions that were made before its start. You can use that insight to help you replicate a similar project in an even better way, but that’s about what you can do.
Scenario planning helps you explore various outcomes and prepare a number of strategies. You look into different potential futures and consider varied combinations of assumptions and events.
Examples of Scenario Planning at Your Agency
Imagine you’re leading a development and design project.
You’re at the very beginning, you’ve kicked off the project by understanding your clients needs and wishes. Now you need to prepare a proposal, but to get that out, you need to figure out what your team can do, when, and for what cost.
The “Old” Way: Without Scenario Planning
Before applying scenario planning, you would probably look at the budget you have at your disposal, look into your team’s availability, and start planning who can work on what and when.
You’d make an estimate that would ensure some profit, and take into account past projects that were of similar scope.
Of course, that’s all speaking ideally, because we all know that no one project is the same.
The “New” Way: With Scenario Planning
Now imagine that you’ve started building a few scenarios to figure out what would work best for your agency. Let’s say you’ve chosen to explore three different scenarios.
In Scenario A, you’ve estimate the hours and costs, which lead to a certain projected revenue and profit.
However, if your team is maxed out, you might need to bring on additional support. In Scenario B, you can adjust Scenario A by adjusting the price to offset the cost of hiring a contractor.
Then there’s Scenario C, where an experienced team member can take on the extra work at a higher rate.
Scenario planning makes it easier to explore each of your options, so you can weigh the pros and cons. Each scenario should offer you a clear insight into how well your team can handle the workload and whether additional hires might be necessary.
Once you’re done creating a few potential scenarios, you can compare them all side by side and have a discussion with others. Whether you’re looking at a best-case, worst-case, or somewhere in between, this type of planning allows you to make an even better-informed decision, with even more confidence than before.
Interested in Scenario Planning?
What if you could know the best project outcome for any project, in advance? Soon, you’ll be able to do just that in Productive. Stay tuned for more.
