27 November 2009
- A technology strategy to help
your law firm survive the recession and build competitive advantage
by Martin Leuw.
During downturns, ‘big ideas’ may
be in short supply as thoughts turn to security and risk. People
can sometimes become ‘busy fools’, so embroiled in ‘fire-fighting’
and task focused they cannot find the time to plan. It is no
surprise then that during periods of growth; we often see
businesses fail because the ‘big idea’, however good it was, failed
due to poor planning and execution.
Think of business planning like this; if you were going on a
journey, you’d have a destination in mind and would plan how you
were going to get there. Likewise, if you were undertaking a
building project, you’d have detailed architectural designs and
plans before you started building. So why should your business be
any different?
To many people, the words ‘strategy’ and ‘business plan’ are too
theoretical and overly complex, suited to the world of management
consultants. However, that does not need to be the case – a good
plan need only be about 5-10 pages long and is far better being a
practical working document that you can share with your employees
rather than a weighty tome that gathers dust on a shelf.
It needs 4 main sections:
1. Where are we now? – an understanding of your current
position
2. Where do we want to be in 3 years time? – your vision of
tomorrow
3. How are we going to get there? – a strategy to deliver your
vision
4. Who is going to do what by when to ensure we get there? –
your plan to execute your strategy
The third question is often the toughest to answer, and actually
needs a plan for each functional area of the practice; sales,
marketing, operations, customer service, HR, finance and of course
technology.
Technology strategy must be owned and driven by the commercial
decision makers in your organisation, not just delegated to IT.
At IRIS, we service, amongst others, the accounting, legal,
healthcare professions and the NFP sector. It is a virtual
certainty that these sectors will emerge from the current recession
looking radically different from the way they went in, partly
driven by the economy and partly by legislative and regulatory
change. There will be winners and the losers probably will not be
around for long.
To win, it will be essential to differentiate on service and
efficiency. Technology can be a terrific enabler to provide your
business with real sustainable competitive advantage in these
areas. So, once you have reached this stage in your business plan,
how can you back it up with an integrated IT strategy that will
differentiate you from your competition?
In our experience, those organisations that place their emphasis
on the business and competitive benefits that technology can bring
them transform their organisations with far more effective IT
strategies than those who get wrapped up in the technology for
technology’s sake.
However, often these same commercial people within the
organisation are unfamiliar with technology, quite understandably
confused by the technical terminology and are not sure of the right
questions to ask. The end result is that the focus of the decision
can become restricted to cost, rather than return on investment and
strategic advantage.
In a professional practice, as in any commercial business, the
managing/commercial partner(s) almost certainly wants to know how
their IT investment can:
• Drive efficiency, automate routine tasks and
reduce admin
• Increase partner profits through increasing chargeable
time
• Improve cash-flow by reducing ‘lock-up’
• Free up partner time to develop new business
• Cross-sell services to existing clients and improve new
client win rates
• Increase competitive advantage by improving client
service
A few years ago, we completed our first ‘position paper’ on how
information technology can be used and applied in an accountancy
practice to achieve these business objectives. We have now
done the same for the legal profession in conjunction with Steve
Williams of Ashton Morton Slack and Chairman of the IRIS Legal
Users Association. We hope it will assist partners in making
informed decisions about all aspects of strategic deployment of
technology so that their firm can derive a greater return on their
IT investment.
The paper outlines 20 questions (principally commercially
oriented) that should be asked of the IT Partner to determine
whether the practice is getting the benefits it is looking
for. It examines three areas of efficiency: process, client
and system efficiency and looks at how various processes in a
practice can be automated or semi-automated from initial client
sign up to service delivery, through to billing.
Obtaining the answers to these questions is the first
step.
An effective IT strategy is as reliant on establishing good
working practices and processes, driven by the leader of the
organization as it is on tools and technology. Let’s face it, your
people are probably both your greatest asset and largest overhead,
so efficient use of their time is paramount.
Perhaps it is a good time to dust off that practice business
plan after all?
Martin Leuw is Group Chief Executive
of IRIS Software Group. In July 2006, he was named Entrepreneur of
the Year in the Technology & Communication category in the
Southern regional final of Ernst & Young’s Entrepreneur of the
Year programme. In October 2009, Martin was awarded the new ICAEW
Faculty prize at the Software Satisfaction Awards for the
contribution he has made to the accountancy profession.