Legal Technology Journal

A new way of working

Answering some common questions about business intelligence systems.

One of the latest technologies to arrive in the UK legal market is business intelligence (BI), with solutions being offered by numerous suppliers of finance and enterprise-reporting  systems. However, despite the plethora of available systems, there is still confusion in the market about the proper use of BI and its capabilities.

Here we answer some common questions about BI, and explain some of the key differences between the various BI tools and approaches that are available.

What is BI and why do law firms need BI solutions?
Complete BI solutions combine software applications and business analysis content, drawing on best practices, enabling firms to better manage their performance and improve their bottom line. In simple terms, BI is an enabler for better strategic decision-making.

What is the difference between BI and reporting tools?
Good BI products have the ability to combine both reporting and performance analysis capabilities. There are many sophisticated reporting tools that enable organisations to generate a vast number of reports on all business activities and transactions, and to distribute that information to employees. However, whilst providing interesting statistics, reports do not automatically help firms to understand the real business issues.

Both aspects are critical: analysis without reporting fails to drive behavioural change in the firm, and reporting without analysis fails to drive understanding of what’s happening in it.

Take, for example, a firm that knows it has a realisation problem. To fix the problem, the firm has to explore the data, derive an understanding of what’s causing the problem, and then generate a report on the issue so it can monitor it.

With report-centric solutions, there is no way of identifying the causes behind the realisation problem. Reporting solutions – without analysis capabilities – allow managers to answer the question of whether there is a problem; they don’t help managers identify its cause.

What else should organisations look for when selecting a BI application?
BI solution suppliers can be separated into two camps: those that deliver content and those that don’t. Solutions provided by BI vendors typically have no content, the definition of content therefore becoming part of the implementation service. This type of solution still has its attractions, not least of which is the fact that the firm is contracting with a BI specialist, which is independent of the existing finance system supplier.

BI solutions that include content, on the other hand, are generally provided by the leading practice management system (PMS) vendors.

Redwood Analytics, a recent entrant into the UK market, is able to deliver a unique offering. The company has experts in BI, independent of PMS suppliers, and is able to deliver a solution containing standardised (but configurable) best practice law firm content. Firms can operate using the content included in the product from day one, and then can build on this, to deliver a solution that is more particular to their specific business needs.

When you refer to ‘content’ what exactly are you talking about?
To effectively manage a firm, you need more than raw data. Most often, it is in distilling this data that useful information is provided. To use a simplistic example, firms keep time records, but those time records alone tell you nothing about a firm’s performance. To calculate realisations, speeds of collection and margins, firms need models that can take work, bill and collection dates and amounts, and calculate the measures of interest.

As a starting point, BI solutions should include standard content, based upon law firm management best practices, so that firms can then adjust them to suit their business needs rather than having to build complete models from scratch.

When the initial models are developed by staff with backgrounds in business and technology, and when R&D resources focus on software as well as content development, the benefits to users are significant.

How long is the typical implementation process?
Many BI vendors begin the implementation process with the installation of the software, which is followed with a needs assessment, prototype development, a feedback loop, and full development with as many iterations as necessary to drive the ultimate production-quality solution. A typical timeframe can be 6 to 12 months.

Having in-built content from day one can shorten the implementation cycle to a more acceptable 60-90 days.