Improved Budgeting: One BI Product's Approach

[Editor's Note: I've appreciated the cooperation and restraint of all authors in not dwelling on the sales points for their particular Business Intelligence products. To avoid excessive abstraction, however, I felt that one article in this special edition should help us ground our considerations by providing a little more product detail.]

Case Study:
Improving the Bottom Line Down Under

An example of a law firm currently aligning its budgeting process with its BI strategy is Clayton Utz, an early adopter of the recently introduced version 7.0 of ADERANT Budgeting. Australia's third largest law firm, Clayton Utz has 207 partners and more than 1,700 employees located in six offices. The firm provides a comprehensive portfolio of legal services to commercial and government clients.

Like many other law firms, Clayton Utz historically developed its budget with spreadsheets. The firm's finance department was comfortable with spreadsheets, which they used to consolidate financial, staff, billing rate and other departmental information. However, spreadsheet-based budgeting had serious limitations. The finance department had to juggle dozens of spreadsheets concurrently to gather budget information from offices, departments and practice group leaders. Large amounts of budgeting data had to be entered manually, with all the attendant risks (duplicate information, keyboarding errors, accidentally overwriting previous changes, or even mistakenly altering a template). It was difficult to develop accurate budgets and reports, track changes between budget versions, and audit individual data inputs. As a result, it took the partners and finance department 8 to 9 weeks to develop the firm's annual budget ' the presentation of which to the firm's board of directors was often embarrassingly late.

In searching for a new solution to improve their budgeting process, Clayton Utz first set a primary business objective: To reduce the excessive ' and non-billable ' time it took the firm's partners and finance team to develop their budget. To further focus the search, firm management mandated that any new system have the following attributes:

• Open. The budgeting solution had to integrate easily with the firm's existing IT infrastructure, including PeopleSoft's human resources ap-plication and ADERANT's practice management solution, CMS.Net.
• Functional. The solution had to have strong legal resource planning capabilities, as well as robust version control and budget variance reporting functionality.
• Intuitive. The solution had to be easy to use, as most end-users would be busy partners and non-technical finance professionals.
• Flexible. Finally, the solution had to be easily customized to fit the firm's unique business processes and reporting needs.

In addition to the attributes described above, ADERANT recommends that law firms wishing to improve their business planning process should look for the following capabilities in a budgeting solution:

• Centralized Control. The solution should help finance departments consolidate control over the budgeting process, workflows, and data.
• Distributed Input. The solution should support online, distributed input from various budget stakeholders, including office managers, department heads and practice group leaders.
• Automation. The solution should pre-populate data from existing financial and departmental applications, saving time and increasing data accuracy.
• Collaboration. The solution should help budget stakeholders communicate changes easily as well as enable users to provide supporting detail.
• Reporting. The solution should provide a robust set of “boardroom ready” reports for executives and budget stakeholders.

After examining several legal budgeting solutions, Clayton Utz selected ADERANT Budgeting and implemented it in time for the March 2005 start of the firm's annual budgeting cycle. In its first use, the solution reduced the firm's budget cycle from 8 to 5 weeks. Management cited as particular timesavers the product's support for collaborative budgeting, version comparisons, and rapid consolidation of revisions.

Like other firms that have used the Budgeting module most effectively, Clayton Utz plans to leverage the enhanced analysis and reporting capabilities of BI to routinely update budget plans and forecasts based on actuals, all with a view to meeting established profitability goals.

Using Budgeting to Drive BI Strategies

ADERANT has found that the most successful firms treat their budget as a living, evolving entity rather than a static document. Business conditions change throughout a year, so firms need to adjust their business plans continually to ensure they'll hit the profitability goals they've set.

Once an overall profitability goal is set, role-based baseline metrics are formulated as Key Performance Indicators (KPIs) for each office manager, practice group leader and attorney, providing them with the information they need to monitor and improve their performance. Budgets are then continually updated based on actuals and variances, with each forecast being revised to project the “Latest Expected Outcome” (LEO). Leading law firms have thus made profitability-based budgeting a cornerstone of their overall Business Intelligence strategy.

Product Brief

ADERANT's Business Intelligence software suite, ADERANT Executive Office, contains solutions for:

• Budgeting and forecasting (ADERANT Budgeting);
• Profitability analysis (ADERANT Profitability);
• New matter pricing (ADERANT Opportunity Calculator); and
• Reporting, analytics, and Key Performance Indicators (ADERANT Analytics).

ADERANT Budgeting enables firms to quickly develop accurate budgets for their people, revenue, expenses and capital requirements in a collaborative, real-time environment. The product was developed with Microsoft Visual Studio and uses Microsoft SQL Server as its database. First released in 1997, ADERANT Budgeting functions either as an integrated module of Executive Office or in standalone mode.

Typically bolted onto a firm's Practice Management System, the Budgeting module can be tightly integrated with ADERANT's own CMS.Net, but it's also designed to work with Elite or any other PMS; indeed 40% of Budgeting clients use a PMS other than CMS.Net.

For initial population of the Budgeting module's database, clients typically perform comprehensive data transfers from their disparate accounting-financial and other systems. Subsequently, however, the firm no longer has to manually input data from those systems to the Budgeting module. Instead, Execu-tive Office provides components called Extraction-Transformation-Loading (ETL) connectors for that purpose.

Each ETL connector is dedicated to a specific PMS system (CMS.Net, Elite, TMC, etc.) or payroll or HR system (ADP, Ceridian, PeopleSoft, etc.). With help from ADERANT'S professional services team, a client law firm simply maps data from each accounting-financial application to ADERANT Budgeting. The Budgeting module then uses each dedicated ETL connector to: a) pull data required from the associated system; b) use that data to update the Budgeting database; and c) quickly create a baseline budget. To update a forecast, for example, the client simply does a monthly data refresh to load actuals for the current period. After the budgeting process is complete, the ETL connectors can also be used to load budget data back into the PMS system.

[Editor's Note: I've appreciated the cooperation and restraint of all authors in not dwelling on the sales points for their particular Business Intelligence products. To avoid excessive abstraction, however, I felt that one article in this special edition should help us ground our considerations by providing a little more product detail.]

Case Study:
Improving the Bottom Line Down Under

An example of a law firm currently aligning its budgeting process with its BI strategy is Clayton Utz, an early adopter of the recently introduced version 7.0 of ADERANT Budgeting. Australia's third largest law firm, Clayton Utz has 207 partners and more than 1,700 employees located in six offices. The firm provides a comprehensive portfolio of legal services to commercial and government clients.

Like many other law firms, Clayton Utz historically developed its budget with spreadsheets. The firm's finance department was comfortable with spreadsheets, which they used to consolidate financial, staff, billing rate and other departmental information. However, spreadsheet-based budgeting had serious limitations. The finance department had to juggle dozens of spreadsheets concurrently to gather budget information from offices, departments and practice group leaders. Large amounts of budgeting data had to be entered manually, with all the attendant risks (duplicate information, keyboarding errors, accidentally overwriting previous changes, or even mistakenly altering a template). It was difficult to develop accurate budgets and reports, track changes between budget versions, and audit individual data inputs. As a result, it took the partners and finance department 8 to 9 weeks to develop the firm's annual budget ' the presentation of which to the firm's board of directors was often embarrassingly late.

In searching for a new solution to improve their budgeting process, Clayton Utz first set a primary business objective: To reduce the excessive ' and non-billable ' time it took the firm's partners and finance team to develop their budget. To further focus the search, firm management mandated that any new system have the following attributes:

• Open. The budgeting solution had to integrate easily with the firm's existing IT infrastructure, including PeopleSoft's human resources ap-plication and ADERANT's practice management solution, CMS.Net.
• Functional. The solution had to have strong legal resource planning capabilities, as well as robust version control and budget variance reporting functionality.
• Intuitive. The solution had to be easy to use, as most end-users would be busy partners and non-technical finance professionals.
• Flexible. Finally, the solution had to be easily customized to fit the firm's unique business processes and reporting needs.

In addition to the attributes described above, ADERANT recommends that law firms wishing to improve their business planning process should look for the following capabilities in a budgeting solution:

• Centralized Control. The solution should help finance departments consolidate control over the budgeting process, workflows, and data.
• Distributed Input. The solution should support online, distributed input from various budget stakeholders, including office managers, department heads and practice group leaders.
• Automation. The solution should pre-populate data from existing financial and departmental applications, saving time and increasing data accuracy.
• Collaboration. The solution should help budget stakeholders communicate changes easily as well as enable users to provide supporting detail.
• Reporting. The solution should provide a robust set of “boardroom ready” reports for executives and budget stakeholders.

After examining several legal budgeting solutions, Clayton Utz selected ADERANT Budgeting and implemented it in time for the March 2005 start of the firm's annual budgeting cycle. In its first use, the solution reduced the firm's budget cycle from 8 to 5 weeks. Management cited as particular timesavers the product's support for collaborative budgeting, version comparisons, and rapid consolidation of revisions.

Like other firms that have used the Budgeting module most effectively, Clayton Utz plans to leverage the enhanced analysis and reporting capabilities of BI to routinely update budget plans and forecasts based on actuals, all with a view to meeting established profitability goals.

Using Budgeting to Drive BI Strategies

ADERANT has found that the most successful firms treat their budget as a living, evolving entity rather than a static document. Business conditions change throughout a year, so firms need to adjust their business plans continually to ensure they'll hit the profitability goals they've set.

Once an overall profitability goal is set, role-based baseline metrics are formulated as Key Performance Indicators (KPIs) for each office manager, practice group leader and attorney, providing them with the information they need to monitor and improve their performance. Budgets are then continually updated based on actuals and variances, with each forecast being revised to project the “Latest Expected Outcome” (LEO). Leading law firms have thus made profitability-based budgeting a cornerstone of their overall Business Intelligence strategy.

Product Brief

ADERANT's Business Intelligence software suite, ADERANT Executive Office, contains solutions for:

• Budgeting and forecasting (ADERANT Budgeting);
• Profitability analysis (ADERANT Profitability);
• New matter pricing (ADERANT Opportunity Calculator); and
• Reporting, analytics, and Key Performance Indicators (ADERANT Analytics).

ADERANT Budgeting enables firms to quickly develop accurate budgets for their people, revenue, expenses and capital requirements in a collaborative, real-time environment. The product was developed with Microsoft Visual Studio and uses Microsoft SQL Server as its database. First released in 1997, ADERANT Budgeting functions either as an integrated module of Executive Office or in standalone mode.

Typically bolted onto a firm's Practice Management System, the Budgeting module can be tightly integrated with ADERANT's own CMS.Net, but it's also designed to work with Elite or any other PMS; indeed 40% of Budgeting clients use a PMS other than CMS.Net.

For initial population of the Budgeting module's database, clients typically perform comprehensive data transfers from their disparate accounting-financial and other systems. Subsequently, however, the firm no longer has to manually input data from those systems to the Budgeting module. Instead, Execu-tive Office provides components called Extraction-Transformation-Loading (ETL) connectors for that purpose.

Each ETL connector is dedicated to a specific PMS system (CMS.Net, Elite, TMC, etc.) or payroll or HR system (ADP, Ceridian, PeopleSoft, etc.). With help from ADERANT'S professional services team, a client law firm simply maps data from each accounting-financial application to ADERANT Budgeting. The Budgeting module then uses each dedicated ETL connector to: a) pull data required from the associated system; b) use that data to update the Budgeting database; and c) quickly create a baseline budget. To update a forecast, for example, the client simply does a monthly data refresh to load actuals for the current period. After the budgeting process is complete, the ETL connectors can also be used to load budget data back into the PMS system.