Data dominance — the importance of integrated practice managementMay 15th, 2020
As ever, data is top of the docket for your business best. In this guest blog our awesome advisor and ally, Mark Hughes, over at S2RANALYTICS, dishes up some tech advice for your architecture, engineering, or construction design (AEC) practice that is both timeless, and timely. No small feat.
We’re proud to host Mark and the S2R crew here, and to share this savvy understanding with you. Especially now, when bottom line is centre stage. Thumbs up and thanks to all of you, from all of us. Take it away, Mark …
Integrated practice management — without the pain of ERP
Faced with a choice between multiple technology solutions to help manage your business, what is the best option for small to medium-sized firms?
Challenges in professional services
Many professional services organizations are finding it increasingly difficult to achieve profit and growth targets. As global competition intensifies, revenue growth is slowing, and bid-to-win ratios are declining1. Some sectors of the market — including architecture, engineering and construction design (AEC) industries — are facing external price pressures resulting in tighter margins. Clients are demanding faster delivery, higher quality, and improved return on investment. They’re also expecting greater transparency and accountability at each stage of delivery.
The critical issues remain:
- Optimizing billable resource utilization
- Minimizing non-billable costs
- Retaining your best talent
Meanwhile, the difficulties continue:
- Securing new clients
- Retaining existing business
- Improving sales pipeline visibility
- Avoiding write-offs
Making the most effective use of existing business information is key to tackling these challenges. Most firms have adopted technology to improve the availability of real-time data, improve collaboration between teams, and to automate manual tasks. Despite these improvements, managers often struggle to join-the-dots to understand the complete picture of performance, billable staff lose productivity juggling between multiple technology solutions, and support staff lose up to a third of their work time to administrative tasks2. A third!
To ERP, or not to ERP?
Only the largest organizations are able to justify the cost and effort required to implement and maintain an enterprise resource planning (ERP) solution. The majority of small to medium-sized firms have adopted individual best-in-breed applications as needed — to solve specific requirements such as billing, project management, and time and expenses. Meanwhile, spreadsheets continue to be widely used for resource management and to calculate project margins. This has resulted in a patchwork of applications and databases each with different user-interfaces, data standards, and logins. When it comes time to do budgeting, benchmark performance, or generate KPI reports, data must be laboriously consolidated and reconciled from multiple sources.
The time and effort required to do this task manually accounts in part for:
- Lost productivity of both billable and non-billable staff
- Delays in reporting
- Avoidable errors and mistakes
- Slowed decision-making processes
Moreover, opportunities to improve the quality of decision-making are missed, for example, aligning staffing decisions in the resourcing system with training and development needs from the skills matrix.
What is needed is a way of delivering on the promise of an integrated practice management system without the disruption of abandoning existing technologies or the huge overhead and frustration associated with complex ERP systems.
Unlocking the potential of your existing data
The good news is that a new class of business intelligence (BI) platforms are able to integrate data across multiple applications including ERP, cloud-based applications, and even desktop spreadsheets.
It is now possible to automatically transform and integrate data on-the-fly into a single relational data model from which performance measures and KPIs can be visualized and reported in near real-time. Advanced visualization and drill-down analytics bring data to life and enable self-service reporting, eliminating the bottlenecks and delays that arise from relying on support staff to generate reports for you.
Meanwhile, machine-learning algorithms work in the background to generate insights and perform analysis that is simply not possible using a standard spreadsheet set-up.
A practical way forward
Given these new developments, what is the best-practice approach to capitalize on these opportunities? First of all, only the largest organizations need an ERP solution — for smaller businesses they are the proverbial ‘sledgehammer to crack a nut’.
At the other end of the spectrum, integrating a large number of smaller, niche applications can be time-consuming and requires constant maintenance to retain critical functionality.
In our experience, the most practical solution is to select a primary application that provides the core functionality required for your industry — for example, Synergy if you are an architectural, engineering, or construction design firm — and using this as a hub to then integrate other applications using a BI platform to create a virtual integrated practice management system.
This approach combines the stability, reliability and support of a proven system with the flexibility, customization, and advanced capabilities from an integrated BI and analytics solution. In practice, a working prototype can be up and running in a few weeks and we have developed and deployed full end-to-end solutions from scratch in less than six months.