Up From Report Writers: How BI Excels

So what's all this excitement about Business Intelligence? You already have a pretty good report writer built right into your time-and-billing system. Your vendor provides over 50 pre-designed reports, each with selection options. Moreover, you have someone on staff that knows Crystal Report Writer. Isn't this all you need?

No, it's not. Today's law firm managers need more powerful and flexible access to financial information than canned or even custom-programmed report writers can deliver.

Put another way: how many times have you wanted to create an important report from your system, only to stop because it would take too long or the information wasn't readily available? This is a common problem for users because even powerful modern time-and-billing systems are mainly transactional database software, not analysis tools. These T&B systems execute complex transactions well, but getting information out in a meaningful report format can be time consuming, challenging and costly. Consider that many reports in even a midsize firm are based on millions of transactions.

To support decisions and strategy, law firm managers need multi-dimensional analysis capabilities, not just the “flat-sheet” reporting to which they've grown accustomed. And they need it on demand. Business Intelligence provides this multi-dimensional capability and more. Below are the key differences that make BI superior to standard financial management reports.

Structured v. Ad hoc Reporting

Financial management systems come with numerous pre-programmed canned reports. The initial launch screen may provide the ability to select from such common items as date range, specific clients, matters or attorneys. Otherwise, however, the design and nature of each report is hard-coded into the system. Outright changes to the report require expensive custom programming, so users are largely limited to the vendor's design choices.

BI supports true ad hoc reporting: You can easily select exactly the data you want, in the exact format you want to see it. Since BI reports are not canned, almost every data element in your system is searchable; you just click on the column and row of the information you want. In seconds, the system automatically builds a Structured Query Language (SQL) query. These ad hoc reports can be saved in a library or continually modified as you wish.

While BI reports are not canned, the BI system does come standard with many pre-defined calculated running totals ' including each month's starting and ending balances for WIP, AR and hundreds of other financial elements. Each running total is indexed by client, matter, attorney, costs, fees, writeoffs and so forth. BI thus provides a great degree of flexibility; you get what you want when you need it.

Database Tables v. Warehouse with Cubes

Being designed primarily to handle transactions, time-and-billing systems are based on relational databases. The tabular structure of such databases is ideal for the storage and processing of transactions, but very poor for the analysis of information. Each time a simple canned report is run, the report must search for the correct tables, build the “data joins,” scan through each table looking for criteria that match each and every requirement, and then retrieve the detail. The detailed data must then be summarized by the canned selection, for example, by client, by attorney, by department and so forth. Getting a monthly write-off total might mean looping through this process many times. It is very time consuming even for today's most powerful computers.

In the BI methodology, the vendor provides a well-designed data warehouse, commonly referred to as a data cube. The data cube is built specifically for precise, high-speed data analysis. At regular intervals, detailed transactions from the financial system are pumped into the data cube with time and date stamps. A process called “transformation” occurs whereby detailed transactions are combined into a large selection of summaries. Each piece of information may be referenced by dozens of summaries. For example, the billing realization variance between attorney standard rate and effective billed rate are already summarized daily and monthly at the client level, matter level, attorney level, area of law and so forth. Therefore, when you need such a piece of information, the BI software doesn't have to calculate all the components from individual detailed transaction tables; it just retrieves the answer from a single location. With a properly optimized data cube, the daily update of information from the time-and-billing system takes just a few minutes for even a very large firm.

Report Formats v. BI Options

Canned reports are always hard-coded to fit on a piece of paper. Some vendors have provided workarounds to get a standard report downloaded into an Excel spreadsheet. Most times it's not very pretty. So what do most firms do? For each of dozens of desired analyses, they re-key the canned report information into a separate spreadsheet.

Canned reports are also, well, so canned. Lacking flexibility, they are acceptable only for routine list-type reports such as AR and WIP. List-type reports do allow you to dig deeper to analyze information. But what happens in your current system when you attempt to get a true snapshot of your AR from the 4th quarter 2002, and then add to that report the billing attorney name and Q4 AR writeoffs? In your time-and-billing system this is probably impossible without custom programming. In BI, by contrast, this report would take less than 30 seconds to design and then only a minute to produce as an Excel report.

With Business Intelligence, a user can easily select the report output design for any analysis; most commonly an Excel Spreadsheet is the native format. The report is then built into the spreadsheet, nicely parsed out into the correct-size columns with all the subtotals and totals requested. Certain BI reports are best shown in a Pivotable, where a user can easily drag around report items to change the view of the information without rebuilding the report.

Sometimes a vendor will also provide Digital Scorecards with a pre-configured view of information specifically designed for an attorney or partner in the firm. These Scorecards can provide hard-hitting information such as daily cash flow analysis, billing, payment and writeoff information specifically for that attorney.

Table 1 summarizes and illustrates how BI remedies shortcomings of standard accounting reports.

[IMGCAP(1)]

Summary

Since law firms today need to manage their businesses much like their corporate counterparts, firm managers need the ability to quickly analyze financial information. Business Intelligence software meets this need by serving as the firm's core repository of information and by allowing a firm to quickly, intuitively and precisely analyze financial performance and trends ' for clients, matters, professionals, offices, departments and areas of law.

So what's all this excitement about Business Intelligence? You already have a pretty good report writer built right into your time-and-billing system. Your vendor provides over 50 pre-designed reports, each with selection options. Moreover, you have someone on staff that knows Crystal Report Writer. Isn't this all you need?

No, it's not. Today's law firm managers need more powerful and flexible access to financial information than canned or even custom-programmed report writers can deliver.

Put another way: how many times have you wanted to create an important report from your system, only to stop because it would take too long or the information wasn't readily available? This is a common problem for users because even powerful modern time-and-billing systems are mainly transactional database software, not analysis tools. These T&B systems execute complex transactions well, but getting information out in a meaningful report format can be time consuming, challenging and costly. Consider that many reports in even a midsize firm are based on millions of transactions.

To support decisions and strategy, law firm managers need multi-dimensional analysis capabilities, not just the “flat-sheet” reporting to which they've grown accustomed. And they need it on demand. Business Intelligence provides this multi-dimensional capability and more. Below are the key differences that make BI superior to standard financial management reports.

Structured v. Ad hoc Reporting

Financial management systems come with numerous pre-programmed canned reports. The initial launch screen may provide the ability to select from such common items as date range, specific clients, matters or attorneys. Otherwise, however, the design and nature of each report is hard-coded into the system. Outright changes to the report require expensive custom programming, so users are largely limited to the vendor's design choices.

BI supports true ad hoc reporting: You can easily select exactly the data you want, in the exact format you want to see it. Since BI reports are not canned, almost every data element in your system is searchable; you just click on the column and row of the information you want. In seconds, the system automatically builds a Structured Query Language (SQL) query. These ad hoc reports can be saved in a library or continually modified as you wish.

While BI reports are not canned, the BI system does come standard with many pre-defined calculated running totals ' including each month's starting and ending balances for WIP, AR and hundreds of other financial elements. Each running total is indexed by client, matter, attorney, costs, fees, writeoffs and so forth. BI thus provides a great degree of flexibility; you get what you want when you need it.

Database Tables v. Warehouse with Cubes

Being designed primarily to handle transactions, time-and-billing systems are based on relational databases. The tabular structure of such databases is ideal for the storage and processing of transactions, but very poor for the analysis of information. Each time a simple canned report is run, the report must search for the correct tables, build the “data joins,” scan through each table looking for criteria that match each and every requirement, and then retrieve the detail. The detailed data must then be summarized by the canned selection, for example, by client, by attorney, by department and so forth. Getting a monthly write-off total might mean looping through this process many times. It is very time consuming even for today's most powerful computers.

In the BI methodology, the vendor provides a well-designed data warehouse, commonly referred to as a data cube. The data cube is built specifically for precise, high-speed data analysis. At regular intervals, detailed transactions from the financial system are pumped into the data cube with time and date stamps. A process called “transformation” occurs whereby detailed transactions are combined into a large selection of summaries. Each piece of information may be referenced by dozens of summaries. For example, the billing realization variance between attorney standard rate and effective billed rate are already summarized daily and monthly at the client level, matter level, attorney level, area of law and so forth. Therefore, when you need such a piece of information, the BI software doesn't have to calculate all the components from individual detailed transaction tables; it just retrieves the answer from a single location. With a properly optimized data cube, the daily update of information from the time-and-billing system takes just a few minutes for even a very large firm.

Report Formats v. BI Options

Canned reports are always hard-coded to fit on a piece of paper. Some vendors have provided workarounds to get a standard report downloaded into an Excel spreadsheet. Most times it's not very pretty. So what do most firms do? For each of dozens of desired analyses, they re-key the canned report information into a separate spreadsheet.

Canned reports are also, well, so canned. Lacking flexibility, they are acceptable only for routine list-type reports such as AR and WIP. List-type reports do allow you to dig deeper to analyze information. But what happens in your current system when you attempt to get a true snapshot of your AR from the 4th quarter 2002, and then add to that report the billing attorney name and Q4 AR writeoffs? In your time-and-billing system this is probably impossible without custom programming. In BI, by contrast, this report would take less than 30 seconds to design and then only a minute to produce as an Excel report.

With Business Intelligence, a user can easily select the report output design for any analysis; most commonly an Excel Spreadsheet is the native format. The report is then built into the spreadsheet, nicely parsed out into the correct-size columns with all the subtotals and totals requested. Certain BI reports are best shown in a Pivotable, where a user can easily drag around report items to change the view of the information without rebuilding the report.

Sometimes a vendor will also provide Digital Scorecards with a pre-configured view of information specifically designed for an attorney or partner in the firm. These Scorecards can provide hard-hitting information such as daily cash flow analysis, billing, payment and writeoff information specifically for that attorney.

Table 1 summarizes and illustrates how BI remedies shortcomings of standard accounting reports.

[IMGCAP(1)]

Summary

Since law firms today need to manage their businesses much like their corporate counterparts, firm managers need the ability to quickly analyze financial information. Business Intelligence software meets this need by serving as the firm's core repository of information and by allowing a firm to quickly, intuitively and precisely analyze financial performance and trends ' for clients, matters, professionals, offices, departments and areas of law.