Basics Revisited: Attributes of Intelligent Decision Support

With a multiplicity of advanced decision support tools now available to law firm managers, it's important not to lose sight of key criteria for appraising all such systems. To facilitate effective decision-making, the designers and implementers of any reporting or BI system should aspire to these attributes: decision usefulness, relevance, reliability, timeliness and understandability.

Decision Usefulness

With automation, it became easier to generate volumes of financial data. In our zeal to produce more reports, a tendency to manage what is easier to measure evolved ' taking management's focus away from more strategic issues. To really improve management reporting in law firms, we need to align our reporting to the types of decisions we have to make.

For effective decision making, managers need not only data with feedback value but also information with predictive value. Making decisions solely based on historical financial results is like driving using only the rear-view mirror.

Relevance

Many firms find that partners make better decisions, and act in better alignment with firm strategic objectives, when they are provided with a few key metrics. It further helps when these metrics focus on exception notifications for internal or external benchmarks. To ensure relevance, the measures displayed for specific partners should vary with their particular areas of responsibility.

Timeliness

For relevant information to enable prompt effective intervention, reporting must be timely; and in today's accelerated business environment, timely often means real-time or virtual real-time. Rapid access to current data is most essential for operational management; but even for tactical and strategic planning, current data can be vital for accurate trend analysis.

Reliability

In information reporting, reliability means there is only one version of the truth ' over time, across reports and between systems. Consistency, verifiability and comparability are absolute expectations. A less obvious requirement is the neutrality of reported measures. Neutrality implies that a measure reflects underlying facts without bias to specific groups or users.

Ideally for all levels of decision-making, BI systems should help managers perceive the interrelationships between measures, so they can better understand the impact of potential actions. For example, in comparing the profitability of clients or practice areas, factors such as higher leverage may more than offset lower realization and turnover.

Understandability

Management reports should quickly inform partners where they should focus their attention, rather than making them wade through haystacks of data looking for the salient needle. Partners need clear, concise information that quickly reveals how the firm or practice group:

• Got to where it is now (trend analysis);
• Compares against internal and external peers (benchmarks); and
• Can take action to ensure its goals will be met in the future.

When reports are delivered electronically with a dynamic Web interface, the display should feature summary-level tables and trend charts, with the ability to drill-down to investigate details where exceptions warrant. Within detail data, exceptions should be highlighted to focus attention on areas with the greatest opportunity for improvement.

With a multiplicity of advanced decision support tools now available to law firm managers, it's important not to lose sight of key criteria for appraising all such systems. To facilitate effective decision-making, the designers and implementers of any reporting or BI system should aspire to these attributes: decision usefulness, relevance, reliability, timeliness and understandability.

Decision Usefulness

With automation, it became easier to generate volumes of financial data. In our zeal to produce more reports, a tendency to manage what is easier to measure evolved ' taking management's focus away from more strategic issues. To really improve management reporting in law firms, we need to align our reporting to the types of decisions we have to make.

For effective decision making, managers need not only data with feedback value but also information with predictive value. Making decisions solely based on historical financial results is like driving using only the rear-view mirror.

Relevance

Many firms find that partners make better decisions, and act in better alignment with firm strategic objectives, when they are provided with a few key metrics. It further helps when these metrics focus on exception notifications for internal or external benchmarks. To ensure relevance, the measures displayed for specific partners should vary with their particular areas of responsibility.

Timeliness

For relevant information to enable prompt effective intervention, reporting must be timely; and in today's accelerated business environment, timely often means real-time or virtual real-time. Rapid access to current data is most essential for operational management; but even for tactical and strategic planning, current data can be vital for accurate trend analysis.

Reliability

In information reporting, reliability means there is only one version of the truth ' over time, across reports and between systems. Consistency, verifiability and comparability are absolute expectations. A less obvious requirement is the neutrality of reported measures. Neutrality implies that a measure reflects underlying facts without bias to specific groups or users.

Ideally for all levels of decision-making, BI systems should help managers perceive the interrelationships between measures, so they can better understand the impact of potential actions. For example, in comparing the profitability of clients or practice areas, factors such as higher leverage may more than offset lower realization and turnover.

Understandability

Management reports should quickly inform partners where they should focus their attention, rather than making them wade through haystacks of data looking for the salient needle. Partners need clear, concise information that quickly reveals how the firm or practice group:

• Got to where it is now (trend analysis);
• Compares against internal and external peers (benchmarks); and
• Can take action to ensure its goals will be met in the future.

When reports are delivered electronically with a dynamic Web interface, the display should feature summary-level tables and trend charts, with the ability to drill-down to investigate details where exceptions warrant. Within detail data, exceptions should be highlighted to focus attention on areas with the greatest opportunity for improvement.