Do Your CFO and KM Leader Talk?

"Business intelligence" software?   Who could argue with that?  Actually, it would help to be able to define it first, so particularly if this is a new jargon-bite to you, the always-insightful and articulate Monica Bay is a must-read. 

It's easier to describe what BI software seeks to achieve than it is to tie it up with a pretty definitional ribbon:  Properly implemented (a huge caveat), BI software can bring together data from every important system in the firm (from time and billing to matter management to your knowledge management and HR systems) to enable the CFO and the managing committee to see the profitability of actual or proposed:

• matters
• client relationships
• practice groups
• offices
• associates, and
• partners.

Moreover, BI can tell you how going about things differently might work—for example, if a client has requested alternative billing, you can create a scenario that both meets that request and maintains your profit margins.   If you're already saying this is more than you want to know (in particular, that last nasty bullet point above), you have just realized the primary cultural impediment to installing BI.

[A note on technical impediments, which are, by and large, beyond the scope of this blog and best left in the capable hands of others such as Dennis Kennedy or Ron Friedmann:  Because a BI installation, a fortiori, requires different systems and databases to connect and talk with each other, it is not for the faint of heart, and indeed one AmLaw 100 CIO is quoted as saying flatly that it's a "wonderful idea that doesn't work in the legal world."  You have been warned.]

Technical and cultural impediments to one side, the economist in me will venture a prediction:  As more firms adopt and really use BI analytics, they will gain a competitive advantage over those who resist.  Small example:  BI enabled one firm to assess and approve or deny client credit-limit increases in a matter of minutes rather than days or weeks. 

In other words, BI is not just for the benefit of the firm; it's for the benefit of the clients.  We've observed before that firms change when clients demand it.  Clients who've come to appreciate a BI-enabled firm are unlikely to settle for less.  In other words, the BI handwriting is on the wall.  "First-mover advantage" may yet be obtained, but the window is closing.