The writing is on the wall. It’s time to change practice management systems. How can you trim cost from your software implementation and still get the greatest value? Here are some tips on getting your budget just right, based on our experiences implementing practice management software for professional services firms worldwide.
1. Review and define project scope and objectives
The first step in controlling cost requires strategic thinking from firm management. It calls for identifying desired areas of improvement, documenting them, and then setting goals to achieve them. Surprisingly, many professional services firms overlook this critical early-planning step. If you don’t have a clear picture of what you want to accomplish, then you run the risk of scope creep and having a system that doesn’t live up to its potential, which in turn will not deliver improved financial results. You can mitigate these risks by aligning your firm’s objectives with the full scope of your project.
2. Focus on four key objectives
Regardless of who leads the software implementation – your internal resources or a third-party service provider – every implementation team needs to understand the objectives of the project. Time is money. Doing some advance homework streamlines the effort for all involved. If you’re going into meetings with absolutely no idea what the software can do and what business processes you want to improve, it will take the team that much longer to reach consensus on what should be accomplished.
It’s important to document what you hope to improve with the implementation of new software related to four key areas: managing risk, managing assets, increasing revenue, and decreasing costs. These are the areas of operations that keep firm management up at night. Aligning your project with the business strategy of the firm makes good business sense and helps to ensure the greatest ROI.
3. Identify business processes to improve
Your implementation team needs to know what changes to make, what the firm wants to achieve, and how the firm measures success. Focus on identifying in advance which business processes to target for improvement based on what you hope to achieve. Look at your most complex business processes such as work to cash, new business intake, and payment requests. For example, if cash flow is important, then set some goals to shorten days to bill and days to collect. Typically we find WIP and A/R leakage in the work-to-cash area and firm management often only realizes this after the fact when the firm has lost inventory. Simple workflows around approval levels based on dollar thresholds can help firm management deal with these situations and help ensure that the firm is doing everything it can to collect its fees and improve performance. A small percentage improvement in any of these metrics has a positive effect on the firm’s business results.
4. Identify opportunities for consolidation
There are other areas of improvement that can drastically affect performance. Many global firms have disparate business processes across their international regions of operations. Others have developed management information reports and invoice formats based on regional requirements. Having all business processes and information management reports integrated into one software system typically improves business results across the firm and may therefore be prioritized as a goal of the project.
Operating one system also addresses common challenges associated with trying to integrate a host of best-of-breed or third-party solutions into the core software environment. Many of the firms we’ve worked with have successfully consolidated software and systems in addition to developing a cohesive master data management strategy. Implementing a strategic data management integration strategy improves implementation time, reduces vendor lock-in and costs, and ultimately improves data quality and service to your firm.
In summary, identifying all of your software customizations in advance based on the objectives of the project will allow you to accurately budget for these project streams, and properly allocate resources to deliver your solutions.
5. Get expert guidance
Unsure of where to begin? Wilson Allen has led planning workshops to help many professional services firms review and define implementation project objectives. The outcome? Once you have your project objectives and scope defined you can accurately set realistic budgets, implementation timeframes, and allocate staff to deliver upon your strategic objectives and business strategy. Contact us if you would like to learn more.