Sonnenschein Improves Financial Analysis and Decision-Making

Sonnenschein Nath & Rosenthal LLP is a global firm with nearly 800 lawyers and other professionals in 14 offices in the U.S. and Europe. Like every law firm, the firm needs to charge rates that will enable it to maintain a worldwide client base as well as profitability. Yet, with clients' requirements and resources evolving every day, we needed to streamline and enhance the financial analysis processes to ensure that we have the right attorneys in the right offices and practice areas. We also needed to confirm that the annual budget supported the firm's business goals.

Having outgrown the labor-intensive ways of creating budgets and monitoring the firm's performance, we decided in early 2008 to update the financial planning and analysis processes with new technology solutions.

The Challenge: Need to
Update Financial Processes

The firm had used the budgeting tool Hyperion for 10 years. To develop budget submissions, each manager had to have a copy of the Hyperion software on his or her computer. Budget submissions from each practice area, department, or office were stored as stand-alone files. Because the software lacked an automated tracking capability, the senior managers responsible for the overall budget had to track the submissions from each practice or office manager on their own, and create their own follow-up messages in e-mail to keep the process moving.

The budget process would start each summer, and the back-and-forth volley of submissions and revisions would continue until a final budget was confirmed the following January. All budget submissions had to be consolidated into the overall budget by hand. The software allowed for 20 budget submissions, but we had 30 budget areas, so some users were required to share their budget files.

In addition to the annual budget, management continually reviews key performance indicators (“KPIs”) such as net income, profits per capital partner, exports (bringing in additional practice areas to support a client), and billings. These KPIs were generated monthly from a Thomson Elite system. The process was time consuming ' involving about 20 personnel hours per month to enter data and generate reports ' and was subject to error because it required the re-keying of data.

The monthly KPI reports were printed and distributed to the firm's management. Beyond the time-consuming nature of distributing paper reports ' and redistributing misplaced copies ' the finance department also had to field questions from managers: Why were income numbers up? What was contributing to a decline in a particular office or practice? Finance department members then had to go back and dig through the data to provide these answers.

The Solution:
New Budget-Planning and KPI Analysis Systems

Needing to shift efforts from administering the solution to interpreting and acting on the data from the solution, we developed a list of business goals for a new finance and analysis solution:

• Provide the information that we needed to plan and manage the business efficiently and effectively, on demand and in an easily understood format.
• Relieve the finance department of the burden of responding to requests for additional data, while ensuring that everyone received the data they needed, whenever they needed it.

We considered a range of solutions, including off-the-shelf packages from Oracle and others, as well as a custom solution. The off-the-shelf solutions failed to meet all of our needs, while a custom solution would cost too much and take too long to develop to warrant the investment.

We turned to The Glenture Group to help determine the technology platform for the new solution and to develop the key elements, including a data warehouse, analysis and reporting tools, and an intranet portal through which managers could access and work with financial and business KPI information.

Together, we created two systems: a new budget-planning system and a KPI display and analysis system based on Microsoft Business Intelligence technologies, including Microsoft SQL Server 2005 data management software, Microsoft Office SharePoint Server 2007, and the Microsoft Office Excel 2003 spreadsheet program.

A Closer Look: The New Budget-Planning System

The budget-planning system is an office business application that is accessed and used through Microsoft Office programs. Managers who are responsible for submitting budget requests, or for reviewing and evaluating those requests, use the solution by opening Excel from the Sonnenschein intranet. The Excel menu bar includes a SharePoint menu item. Clicking that menu item gives the user access to the range of budget-planning functions associated with the system, such as launching a budget assignment, accessing templates to complete a budget assignment, or viewing budget reports by month, office or practice group.

Managers, for example, can enter proposed expense budgets into an Excel worksheet, and then senior management can tap SharePoint Server to analyze the various budget submissions based on custom algorithms and create an overall proposed budget for our firm, which can be viewed in detailed reports. When revisions are requested, managers can revise and resubmit their budget proposals in Excel to be reprocessed by SharePoint Server. When the budget is approved, it is integrated into our firm's broader financial database.

A Closer Look: The New KPI Display and Analysis System

The KPI display and analysis system uses the same SharePoint Server technology, but is accessed through our intranet portal, rather than through Excel. Available KPIs include data on net profit, profit per capital partner, billings by originating attorney, and exports. The KPI data is displayed through online dashboards and scorecards, and users can click them to reveal libraries of reports containing the data from which the dashboards and scorecards are derived.

Firm leadership determines which portions of the data each attorney is able to access, based on an attorney's role in the firm as defined by the attorney's active directory services profile. The chairman, Policy and Planning Committee members, and Practice Group Leaders have full access to the KPIs and the drill-down data behind them, while managing partners may have access only to data on their own offices.

The Results: Increased ROI, Streamlined Maintenance

Since implementing the new systems, we have increased return on investment (“ROI”) in existing technology. We developed our business intelligence solution based on the technology that was already the foundation for our firm's infrastructure such as SQL Server and SharePoint Server. As a result, our systems were easier and more cost effective to deploy and manage. We didn't have to train developers or users on the technologies because they were already familiar with them.

Our attorneys and managers, for example, already use Excel every day, so it was an ideal interface for our business intelligence solution, and only minimal training was needed on complementing technologies such as SharePoint Server. We also gained the financial and operational benefits of having only one solution to maintain, rather than having to staff for and maintain multiple platforms.

Other benefits include:

' Budget reports created 10 times faster, for better decision-making. Having just completed our first budget development cycle using our new systems and processes, we have estimated the following improvements:

• Created budget reports in just 10% of the time that it took a year before, shaving days off the time it takes to run each proposed budget revision.
• Produced 20% more budget reports and revisions, enabling decision makers to consider a broader range of budget options, and do so in less time than the previous process took.
• Able to view budget details and “what if” scenarios previously not available for better decision-making.
• Reduced time on the administration of the budget system and provided more time analyzing and optimizing the proposed budget.
• Increased client satisfaction by proposing and setting billable rates with clients months earlier than we could before, giving them more time for their own planning.

' KPI information delivered in real time, saving 20 personnel-hours per month. The new KPI reporting and analysis system similarly delivers more information, more quickly than the old, manual, paper-based system. Some improvements:

• Transitioned from a system that delivered monthly information too late in the decision making process to a new solution that provides real-time information.
• Enabled management to respond to changing conditions as they occur. For example, if a given practice area is running over its projected budget or under projected revenues, management now can address the situation weeks earlier than it could before.
• Improved efficiency for the finance department ' saving up to 20 personnel hours per month that were previously devoted to creating KPI reports ' by providing direct access to needed information through our dashboards.

Empowered users to drill down on their performance and other critical data to understand the numbers immediately, rather than asking us to run a custom report, which might take a day or more to reach them.

Sonnenschein Nath & Rosenthal LLP is a global firm with nearly 800 lawyers and other professionals in 14 offices in the U.S. and Europe. Like every law firm, the firm needs to charge rates that will enable it to maintain a worldwide client base as well as profitability. Yet, with clients' requirements and resources evolving every day, we needed to streamline and enhance the financial analysis processes to ensure that we have the right attorneys in the right offices and practice areas. We also needed to confirm that the annual budget supported the firm's business goals.

Having outgrown the labor-intensive ways of creating budgets and monitoring the firm's performance, we decided in early 2008 to update the financial planning and analysis processes with new technology solutions.

The Challenge: Need to
Update Financial Processes

The firm had used the budgeting tool Hyperion for 10 years. To develop budget submissions, each manager had to have a copy of the Hyperion software on his or her computer. Budget submissions from each practice area, department, or office were stored as stand-alone files. Because the software lacked an automated tracking capability, the senior managers responsible for the overall budget had to track the submissions from each practice or office manager on their own, and create their own follow-up messages in e-mail to keep the process moving.

The budget process would start each summer, and the back-and-forth volley of submissions and revisions would continue until a final budget was confirmed the following January. All budget submissions had to be consolidated into the overall budget by hand. The software allowed for 20 budget submissions, but we had 30 budget areas, so some users were required to share their budget files.

In addition to the annual budget, management continually reviews key performance indicators (“KPIs”) such as net income, profits per capital partner, exports (bringing in additional practice areas to support a client), and billings. These KPIs were generated monthly from a Thomson Elite system. The process was time consuming ' involving about 20 personnel hours per month to enter data and generate reports ' and was subject to error because it required the re-keying of data.

The monthly KPI reports were printed and distributed to the firm's management. Beyond the time-consuming nature of distributing paper reports ' and redistributing misplaced copies ' the finance department also had to field questions from managers: Why were income numbers up? What was contributing to a decline in a particular office or practice? Finance department members then had to go back and dig through the data to provide these answers.

The Solution:
New Budget-Planning and KPI Analysis Systems

Needing to shift efforts from administering the solution to interpreting and acting on the data from the solution, we developed a list of business goals for a new finance and analysis solution:

• Provide the information that we needed to plan and manage the business efficiently and effectively, on demand and in an easily understood format.
• Relieve the finance department of the burden of responding to requests for additional data, while ensuring that everyone received the data they needed, whenever they needed it.

We considered a range of solutions, including off-the-shelf packages from Oracle and others, as well as a custom solution. The off-the-shelf solutions failed to meet all of our needs, while a custom solution would cost too much and take too long to develop to warrant the investment.

We turned to The Glenture Group to help determine the technology platform for the new solution and to develop the key elements, including a data warehouse, analysis and reporting tools, and an intranet portal through which managers could access and work with financial and business KPI information.

Together, we created two systems: a new budget-planning system and a KPI display and analysis system based on Microsoft Business Intelligence technologies, including Microsoft SQL Server 2005 data management software, Microsoft Office SharePoint Server 2007, and the Microsoft Office Excel 2003 spreadsheet program.

A Closer Look: The New Budget-Planning System

The budget-planning system is an office business application that is accessed and used through Microsoft Office programs. Managers who are responsible for submitting budget requests, or for reviewing and evaluating those requests, use the solution by opening Excel from the Sonnenschein intranet. The Excel menu bar includes a SharePoint menu item. Clicking that menu item gives the user access to the range of budget-planning functions associated with the system, such as launching a budget assignment, accessing templates to complete a budget assignment, or viewing budget reports by month, office or practice group.

Managers, for example, can enter proposed expense budgets into an Excel worksheet, and then senior management can tap SharePoint Server to analyze the various budget submissions based on custom algorithms and create an overall proposed budget for our firm, which can be viewed in detailed reports. When revisions are requested, managers can revise and resubmit their budget proposals in Excel to be reprocessed by SharePoint Server. When the budget is approved, it is integrated into our firm's broader financial database.

A Closer Look: The New KPI Display and Analysis System

The KPI display and analysis system uses the same SharePoint Server technology, but is accessed through our intranet portal, rather than through Excel. Available KPIs include data on net profit, profit per capital partner, billings by originating attorney, and exports. The KPI data is displayed through online dashboards and scorecards, and users can click them to reveal libraries of reports containing the data from which the dashboards and scorecards are derived.

Firm leadership determines which portions of the data each attorney is able to access, based on an attorney's role in the firm as defined by the attorney's active directory services profile. The chairman, Policy and Planning Committee members, and Practice Group Leaders have full access to the KPIs and the drill-down data behind them, while managing partners may have access only to data on their own offices.

The Results: Increased ROI, Streamlined Maintenance

Since implementing the new systems, we have increased return on investment (“ROI”) in existing technology. We developed our business intelligence solution based on the technology that was already the foundation for our firm's infrastructure such as SQL Server and SharePoint Server. As a result, our systems were easier and more cost effective to deploy and manage. We didn't have to train developers or users on the technologies because they were already familiar with them.

Our attorneys and managers, for example, already use Excel every day, so it was an ideal interface for our business intelligence solution, and only minimal training was needed on complementing technologies such as SharePoint Server. We also gained the financial and operational benefits of having only one solution to maintain, rather than having to staff for and maintain multiple platforms.

Other benefits include:

' Budget reports created 10 times faster, for better decision-making. Having just completed our first budget development cycle using our new systems and processes, we have estimated the following improvements:

• Created budget reports in just 10% of the time that it took a year before, shaving days off the time it takes to run each proposed budget revision.
• Produced 20% more budget reports and revisions, enabling decision makers to consider a broader range of budget options, and do so in less time than the previous process took.
• Able to view budget details and “what if” scenarios previously not available for better decision-making.
• Reduced time on the administration of the budget system and provided more time analyzing and optimizing the proposed budget.
• Increased client satisfaction by proposing and setting billable rates with clients months earlier than we could before, giving them more time for their own planning.

' KPI information delivered in real time, saving 20 personnel-hours per month. The new KPI reporting and analysis system similarly delivers more information, more quickly than the old, manual, paper-based system. Some improvements:

• Transitioned from a system that delivered monthly information too late in the decision making process to a new solution that provides real-time information.
• Enabled management to respond to changing conditions as they occur. For example, if a given practice area is running over its projected budget or under projected revenues, management now can address the situation weeks earlier than it could before.
• Improved efficiency for the finance department ' saving up to 20 personnel hours per month that were previously devoted to creating KPI reports ' by providing direct access to needed information through our dashboards.

Empowered users to drill down on their performance and other critical data to understand the numbers immediately, rather than asking us to run a custom report, which might take a day or more to reach them.