Dwindling client budgets vs. improving internal efficiencies

Like most industries today, marketing research companies are swimming in their own internal data. But of course, that means it’s easy to drown. For research vendors, failure to effectively use all of the information available to them can lead to operational inefficiencies. And at a time when your customers are demanding that you deliver lower prices, faster project turnarounds and cutting-edge tools, inefficient is one thing you can’t afford to be. This article from Deltek outlines the challenges facing research firms and explores how better data and project management can position them for growth and greater profitability.

— Joseph Rydholm, Quirk’s editor

It’s no surprise that the environment market research firms have to navigate has changed dramatically in less than a decade. Between dwindling client budgets for market research, big data and new technologies, along with increasing competition, market researchers are facing big challenges.

 
In a world where clients have access and have become accustomed to such broad capabilities and virtually on-demand results, they are also expecting more from market research firms. The GreenBook 2015 Industry Trends Report found that 29 percent of market research respondents “feel one of their biggest challenges is dealing with clients who want researchers to replicate the expensive, high tech solutions in a low-cost, scalable way.”

DIY explosion – SurveyMonkey now has 25 million customers, is used by 99 percent of the Fortune 500 and completes 90 million surveys every month. (Forbes)

But better, faster and cheaper is just the beginning. The availability of new tools and the ability to tap into seemingly limitless volumes of data have also raised the bar for other customer demands.

• More sophisticated approaches: Clients now require more creative means for identifying highly targeted sources and specific trends.
• More actionable insights and stories: Customers can mine their own data, so what they need is more value and expert insight added to their raw findings.

Some market research firms have been able to take advantage of tremendous new opportunities and have reaped great benefits from this industry-wide realignment. But many others are experiencing business challenges that were unimaginable just a few years ago.

Why is responding to the new marketplace so challenging?

Many project-based organizations, like market research firms, are still structured to serve the old marketplace, which may have been more forgiving of operational inefficiencies. It was acceptable to take several weeks or even months to garner results as long as the end product provided real value. But that kind of turnaround doesn’t cut it in today’s fast-pace digital environment.

Other challenges for market researchers include forecasting resource utilization, visibility across the entire project and disconnected data.

Forecasting resource utilization

One of the key findings in Forrester’s Fragmented Processes Jeopardize Project Firm Buoyancy study is that even as organizations anticipate high margins and utilization rates, they actually struggle to match analysts’ expertise and availability to specific assignments.

• More than 40 percent of respondents were highly concerned with planning tasks and resources to execute engagements.
• More than half of respondents ranked talent hiring and retention as their first, second or third most pressing concern.

Visibility across the entire project

As today’s complex market research projects are executed, firms find they don’t have equally sophisticated internal tools for project tracking and monitoring. Imagine trying to make informed decisions when proposals are in one location, project status is in another, resource plans are on separate spreadsheets and financial results are locked in the back office. This all too realistic scenario makes it impossible to track real-time progress or determine which project components are meeting projected margins.

“The hard part is tracking soft costs. You often forget that someone is spending a lot of time on one particular piece of the puzzle and that ends up costing you a lot,” Jim Bryson, CEO, 20/20 Research.

Disconnected data

It is certainly possible to compile the necessary data from multiple sources to make accurate and effective operational decisions but it is highly inefficient. It requires extensive time and effort to identify and locate appropriate information, which then needs to be reconciled to eliminate duplication and ensure accuracy. The process is so costly and cumbersome that many firms simply avoid it.

However, there is a price to pay for avoidance. For example, when it comes to sales proposals, the Forrester study revealed that 61 percent of respondents win less than half of their sales efforts and nearly as many highlighted an “inability to target the most potentially profitable engagement, based on past project profitability and ability to deliver.”

Most firms are well aware of these issues. The GreenBook Report found that three-quarters of respondents feel they need to transform their businesses to stay competitive. Only 13 percent judged their strategic planning skills as strong and approximately only one-third have specific mechanisms or processes in place to help them change as needed.

Eliminate data silos for a single version of the truth

As a market researcher, you already know that data is king. So, the first step to responding successfully to today’s trends, challenges and staying competitive is taking full advantage of the internal information and expertise you already have.

What’s preventing most firms from doing that? As stated earlier, many lack the tools to accurately track and monitor projects and gain full visibility into profitability. Their important data is in silos spread across multiple systems, such as customer relationship management (CRM) applications, stand-alone project management tools, various departmental timekeeping spreadsheets and separate financial packages. Gathering the information, you need to make critical business decisions is time consuming and often incomplete, leaving your decisions uninformed and shortsighted.

Aggregating information from all sources into one reliable application provides a more accurate and comprehensive overview. It places everything you need to balance project scope with available resources; track time and expenses against revenue; and compare projections to actual project results in one location. In other words, there needs to be one version of the truth.
 
The good news is that the same disruptions that have made the industry so challenging have also introduced integrated tools to better manage people, projects and profitability (such as those Deltek offers). With better tools and solutions to identify, compile and track operational data, you can improve decision-making to help win new business and optimize project management from proposal to final invoice.

Thrive with a path to better planning

Today’s advanced project management solutions help make practical use of your internal data and have the ability to more accurately determine the time left on open jobs. The solutions also assist in anticipating requirements of engagements still in the pipeline. The entire project life cycle is improved by having a stronger foundation to support decision-making when it comes to elements that are critical to your success. These include:

• being able to determine the most suitable and profitable projects to pursue;
• balancing engagement requirements with available resources;
• matching internal capacity to customer demands;
• real-time updates of task status and key project milestones’ critical tasks and budget; and
• improving cash flow with easy timesheets, simple expense reports and streamlined billing and invoicing.

Forrester found that 52 percent of respondents ranked promptly capturing time and materials or expenses associated with projects as one of their top project challenges. Being able to access this kind of information means you also have analytics capabilities to help identify and address the causes of issues that may negatively impact efficiency, margins and client service on a regular basis before it’s too late.

You’ll also have tools at your fingertips to:

• Provide a more consultative approach: Gaining insights into past engagements enables you to offer better service right now. If a client asks for a more targeted sampling, you will know whether their budget can support it. Are they asking for more customized analysis of the data? At a glance you can advise them on whether appropriate resources are available during their preferred timeframe.
• Deliver faster results more efficiently: While shorter deadlines have become a constant challenge, the right project management solution can optimize operations to serve the most demanding schedules. Application automation allows you to spend less time gathering information for budgeting. Less effort is required to identify talent and availability across multiple projects. All engagement activities, from new businesses to tracking cash flow, are better coordinated, resulting in fewer administrative hours, greater accuracy, higher margins and happier customers.

“We keep searching for what we can do that’s extra and unexpected that will really make the difference between good and great, and really drive loyalty,” Scott Young, president, Perception Research Services.

Moving forward

Even as market research firms cope with unprecedented technological shifts and realigning client expectations, there are opportunities that come with such challenges that can be used to your benefit. When you up your game with new tools that enhance insight into project planning, offer more control over costs and provide information for better decision-making, you deliver more valuable services to clients than they can get with DIY solutions.

By leveraging your own internal data, you create a foundation for becoming more agile and competitive. You can position your firm for growth and set yourself apart with superior client service, added value, high client satisfaction and greater profitability.

For more information, visit www.deltek.com/research.