kpi - whats behind the numbers (final)...
TRANSCRIPT
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KPI: What's Behind the NumbersPresented by:
Andrew Dawson: Senior Director, Product Marketing, ADERANTAndrew Dawson: Senior Director, Product Marketing, ADERANTTom Jones: Director, Product Marketing, ADERANT
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Key Performance Indicators
CategoriesLag MetricsImports/ExportsTrending
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Key Performance Indicators
Come Away WithHow the Numbers are DerivedWhat the Metric MeansHow to Best Use the MetricEnvironment best suited the provision this capability
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Key Performance Indicators
Distinction Between Raw Numbers and MetricsGood Purposes for BothMetrics turn raw numbers into performance indicatorsMetrics change concrete reports into KPIs
In Executive Inquiry System, put side by side
Metrics are RelativeRaw numbers are exact
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Lag Metrics
Concept is to take a weighted average of the delay or lag (in days) between two points in the billing cycleSome choose to be positive and call it “speed”Weighted average is important to be fair
Also makes it easy to aggregateAlso makes it easy to aggregate
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Lag Metrics
Time LagWIP Lag (Avg Days in WIP)g ( g y )AR Lag (Avg Days in AR)Billing Lag (Billing Speed)Billing Lag (Billing Speed)Collection Lag (Collection Speed)
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Time Lag
Weighted Avg from Time Worked to Time PostedHow long does it take someone to enter their timeg
SUM(Hrs * # Days) / SUM(Hrs)Some use worked date to released dateSome use worked date to post dateMust use Hours because time doesn’t have a value Must use Hours because time doesn t have a value before it is posted
This turns Missing Time into a MetricThis turns Missing Time into a Metric
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Time LagTime Date Entry Date Hours #Days Weighted Avg Weighted Avg/HrsTime Date Entry Date Hours #Days Weighted Avg Weighted Avg/Hrs1/10/2008 1/10/2008 2.5 7 2.5 * 7 = 17.51/25/2008 1/25/2008 1 10 1 * 10 = 101/15/2008 1/15/2008 .2 5 0.2 * 5 = 2.52/28/2008 2/28/2008 .5 4 0.5 * 4 = 2
4.2 32 32/4.2 = 7.62 Days
Time Lag - Business Case:Missing Days Report vs Time Lag
4.2 32 32/4.2 7.62 Days
Missing Days Report vs. Time LagMissing Days is concrete – what’s missingTime Lag evaluates performanceProvides a target to improveThe sooner time is entered, the less time is lost
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WIP Lag
Weighted Avg from Worked Date to TodaySum(WIP Amt * # Days) / SUM(WIP Amt)
Only for billable timeThis turns Aged WIP into a MetricThis turns Aged WIP into a MetricAlso popular is the % of WIP over 60 Days
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WIP LagWIP Date Today WIP Amt # Days Weighted Avg Weighted Avg/WIP1/3/2008 8/15/2008 400 225 400 * 225 = 90,000
6/15/2008 8/15/2008 1,800 61 1,800 * 61 = 109,8007/10/2008 8/15/2008 1,500 36 1,500 * 36 = 54,0007/24/2008 8/15/2008 600 22 600 * 22 = 13,200
Total 4 300 00 267 000 267 000 / 4 300 = 62
WIP LAG – Business CaseAged WIP vs. WIP Lag
Total 4,300.00 267,000 267,000 / 4,300 = 62
Aged WIP tells which clients haven’t been billedLag evaluates attorney on billing practices in generalWIP that is billed sooner will have a higher realization
Percent over 60 DaysPercent over 60 DaysEvaluates attorney on what should have been billedBoth skew for contingent matters, bankruptcy, etc.
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AR Lag
Weighted Avg from Bill Date to TodaySum(AR Amt * # Days) / Sum(AR Amt)Typically includes Fees and Disb
This turns Aged AR into a MetricgAlso popular is % of AR over 60 or 90 Days
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AR LagBill Date Today AR Amt # Days Weighted Avg Weighted Avg/ARBill Date Today AR Amt # Days Weighted Avg Weighted Avg/AR1/3/2008 8/15/2008 400 225 400 * 225 = 90,000
1/15/2008 8/15/2008 800 213 800 * 213 = 170,4002/10/2008 8/15/2008 500 187 500 * 187 = 93,5007/24/2008 8/15/2008 600 22 600 * 22 = 13,200
Total 2,300.00 367,100 367,100 / 2,300 = 159
AR Lag – Business CaseAged AR Report vs AR LagAged AR Report vs. AR Lag
Aged AR tells which clients haven’t paidLag evaluates attorney on collection history
How well does the attorney follow-upQuicker collection means higher realization
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Billing Lag
Weighted Average Days From Time Entry to BillHow long does it take someone to billg
SUM(Billed Amt * # Days) / SUM(Billed Amt)
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Billing LagTime Date Bill Date Billed Amt # Days Weighted Avg Weighted Avg/BilledTime Date Bill Date Billed Amt # Days Weighted Avg Weighted Avg/Billed
1/3/2008 3/15/2008 400 72 72 * 400 = 28,8001/15/2008 3/15/2008 800 60 60 * 800 = 48,0002/10/2008 3/15/2008 500 34 34 * 500 = 17,0002/24/2008 3/15/2008 600 20 20 * 600 = 12,000
Total 2,300.00 105,800.00 105,800 / 2,300 = 46
Billing Lag – Business CaseBilling Realization Report vs Billing LagBilling Realization Report vs. Billing Lag
Realization shows how much was billed/written downLag evaluates how quickly it was billedTimely billings will be paid more fully
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Collection Lag
Weighted Average Days from Bill to CollectionHow long does it take someone to collectg
Sum(Collection Amt * # Days) / Sum(Collection Amt)
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Collection LagBill Date Collect Date Cash Amt # Days Weighted Avg Weighted Avg/CashBill Date Collect Date Cash Amt # Days Weighted Avg Weighted Avg/Cash
1/25/2008 3/15/2008 1,000.00 50 1000 * 50 = 50,0002/25/2008 5/15/2008 1,800.00 80 1800 * 80 = 144,0005/20/2008 6/15/2008 500 26 500 * 26 = 13,0006/24/2008 7/15/2008 600 21 600 * 21 = 12,600
Total 3,900.00 219,600 219,600 / 3,900 = 56
Collection Lag – Business CaseCash Realization vs Collection SpeedCash Realization vs. Collection Speed
Realization shows how much was collected/written downLag shows how quickly it was collectedS ti fi d li t i kSatisfied clients pay quickerSatisfied clients pay more fully
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Imports/Exports
How much work is one dept/practice group doing for another dept/practice group within the firmExports –
How much work my dept is doing for another depty p g pExporting my work product
Imports –Imports How much work other depts are doing for my deptImporting work productImporting work product
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Imports/Exports
Matter Dept compared with Working Atty DeptDept, Office or Practice Group interchangeable
Shows how much you depend on others for workShows how much others depend on you for workShows how much others depend on you for workIf done correctly, this is not cross-selling
This is multi disciplinary workThis is multi-disciplinary work
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Imports/ExportsMatter Dept WA Dept Time Worked
Tax Tax 300,000.00Tax Corp 60,000.00Tax Corp 60,000.00
Corp Corp 500,000.00Corp Tax 200,000.00
Imports/Exports – Business CaseEvaluates Interaction between DepartmentsEvaluates Interaction between Departments
Reveals strengths and weaknesses within the firmReveals dependenciesp
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Trends
Comparing one period to previous periodsTypically current and two prior periods
Apples to ApplesSame Period rangeg
YTD to Prior YTDRolling 12 months to Prior Rolling 12 monthsMonth to same month last year
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Trends
BillingsCollectionsTime WorkedAR (requires restating)AR (requires restating)WIP (requires restating)
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Trends
Purpose is to evaluate future of firmReveal problems early onyTypically need to look at 2 or more trends at a time
Billings are down (is Time down?)Billings are down (is Time down?)Collections are down (are Billings down?)EtcEtc.
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Trends – Business Case
Need to tell where firm is headedIs it a business problem
Losing clients/market shareIs it an execution problemIs it an execution problem
Attorneys aren’t billing
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Conclusions - KPIsU M t i t I P fUse Metrics to Improve PerformanceFair Comparison between Attorneys
Consistency is more important than accuracyConsistency is more important than accuracyTargets can be Established Improvement can be MeasuredImprovement can be MeasuredMetrics can be Rolled UpNumbers can be Given Concrete MeaninggSome can be applied to clients as well
How quickly do clients payTrends for individual clients
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KPI Delivery / BI Solution
Improving organizations by providing business insightsbusiness insights
to ALL employees, leadingto better, faster, more
l t d i irelevant decisions
Complete and integrated BI and PersonalTeamOrganizationalComplete and integrated BI and performance-management offering Widespread delivery of intelligence
through Microsoft Office
PersonalBI
TeamBI
OrganizationalBI
© 2008 ADERANT
Enterprise-grade and affordable
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Role-based Content
ExecutivePractice Group LeaderOffice ManagerPartnerPartnerTimekeeperMarketing
Reports, dashboards, scorecards, etc.© 2006 ADERANT
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KPIs
KPI containsValueTargetPerformance ThresholdsIndicator (graphical representation)
KPIs can be built in the cube or defined outside the KPIs can be built in the cube or defined outside the cube
If built in the cube the KPI is available to other If built in the cube, the KPI is available to other applications (such as Excel)
© 2006 ADERANT
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Dimensions / Component AnalysisDimensions
Part of cube definitionE bl th t “ li d di ” th t i f i t Enable the user to “slice and dice” the metrics for appropriate business components
HierarchicalHierarchical• Firm
• Office• Practice Group
• Responsible Partner• Timekeeperp
• Etc.
© 2006 ADERANT
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Dashboards / Scorecards
Multiple KPIsKPIs can be weighted to give overall scoreg gInteractive – allow filtering along dimensions
© 2006 ADERANT
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OLAP Solution Architecture
Analytics FoundationBusinessUsers
PMS ETLData
Warehouse
OLAPCubes Packaged
Content
SSRSReports
OLAPVi
Financial Analyst /Power User
SSRS
© 2008 ADERANT
ViewerOf
Choice
SSRSReports
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Timeliness / Delivery
Quarterly / MonthlyReports
DailyDashboard / Intranet deliveryy
Near Real-TimeDashboard / Intranet deliveryDashboard / Intranet deliveryExcel (interactive analysis versus packaged analytics)
© 2006 ADERANT
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SharePoint / Intranet Delivery of MetricsM i b d li d id b id i h h fi i Metrics can be delivered side-by-side with other firm intranet contentDriver can be to extend existing intranet content
© 2006 ADERANT
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CustomizationFirms have different requirements for
Metrics deliveredP t ti lPresentation layerKPI calculationsKPI graphical representationKPI graphical representationPerformance thresholds Languageg gTerminology (etc.)
Your solution should enable and encourage customization© 2006 ADERANT
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Conclusions – KPI Delivery
Improve firm performanceRole-based contentAwareness / accountabilityProactive (actionable metrics)Proactive (actionable metrics)
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Questions and Discussion