How Can Law Firms Drive Informed Decision-Making?
Allowing businesses to optimise their use of resources and enhance their service offering, mergers and acquisitions (M&As) can provide law firms with a number of commercial benefits. However, they can sometimes result in internal data being spread across multiple platforms, reducing visibility for decision-makers and making it more difficult to spot potential risks and opportunities. Below, Matt Evans, a senior business analyst at business change consultancy Entec Si, explains for Lawyer Monthly.
In order to gain valuable insights into key areas of the business and drive informed decision-making, it is essential that firms establish a central location for all internal data, otherwise known as a ‘Data Warehouse’.
With a significant number of business benefits, it is no wonder that the trend towards consolidation in the legal industry shows no signs of slowing. As well as allowing firms to enjoy the cost efficiencies that result from economies of scale and access to a larger pool of talent, mergers and acquisitions can also boost businesses’ competitive advantage, allowing them to move into new areas of expertise or improve the range of skills on offer within the organisation.
However, it is important to bear in mind that M&A activity can introduce significant challenges for firms when it comes to analysing and drawing valuable insights from internal data. Businesses which have undergone such changes may well find themselves with data segregated across the organisation. This can make it more difficult for business leaders to see where the firm is heading and to make intelligent decisions about its commercial direction. As a result, a lack of attention to data categorisation and management could actually undermine the original objectives of the M&A activity.
For firms to drive maximum value from business data, it is essential that they implement a central data hub, or ‘Data Warehouse’. Having multiple silos of off-system data, such as Excel spreadsheets, not only increases the need for manual working but also reduces the accuracy of information, which quickly becomes inconsistent and outdated. Without access to an accurate, comprehensive and central source of data, firms increase their chances of missing important risks and opportunities. Moreover, with the recent implementation of GDPR legislation, firms with inconsistent and disorganised systems are more likely to make mistakes handling clients’ personal data, which could have severe implications for their reputation.
Implementing a data warehouse removes the need for manual processes, providing law firms with an accurate, accessible and timely central location for business data and a ‘single source of truth’. Incorporating automated feeds from a number of different business systems, for example, CRM platforms, HR systems and financial feeds, their frequency can also be adjusted according to the particular needs of the business, ensuring the right information is always available. The ability to build dashboards and reports also allows decision-makers to drill down into the detail of a particular area, supporting strategic planning across key sectors and practices.
When establishing a data warehouse, it is essential that business leaders give careful thought to their individual requirements and adopt a “current and target” approach, considering their current data architecture as well as their future objectives. For example, who requires access to data? Which area of the business do they work in and what systems does data need to be pulled from? Asking these key questions at the beginning of a project will ensure that the warehouse is built on the most appropriate IT platform, preventing any potential issues further down the line. There may be a requirement to transfer off-system data onto new applications or remove old systems that have become redundant, so it is worth developing a thorough understanding of all platforms being used, across all areas of the business.
Before beginning a data centralisation project, it is also important to consider whether any data cleansing or classification activity is required, which will give business leaders the best chance of making the right decisions regarding commercial strategy. Producing mock designs of the outputs from the warehouse before they are developed can also help to speed up project delivery and improve accuracy of the outputs. This can help firms in ironing out any potential flaws which could prevent business improvements from being realised. Furthermore, assigning a dedicated and knowledgeable member of internal staff, who can work closely with those building the data warehouse and be responsible for signing the platform off, can also help to boost the chances of project success.
Before law firms commence a data warehouse project, it is vital that they seek out the right professional advice. As well as looking for specialists with extensive experience of delivering data warehouses in a similar sector, making use of ‘blended teams’ can help businesses to increase the efficiency of the project by getting support from a variety of advisors at different times.
For law firms placing consolidation at the heart of their 2019 commercial strategy, a focus on developing a ‘single source of truth’ is essential to maximising the benefits of M&A activity. By implementing a data warehouse and securing the right specialist advice, businesses in the legal sector can drive intelligent decision-making and gain a competitive edge, whatever market conditions throw at them.
