Written by: Tammy Salvo
Peter Zeughauser recently wrote an article, which emphasized the importance for law firms (Big Law) to start taking their business, the business of law, more seriously. How? By jumping head first into a Big Data initiative to not only understand the key metrics impacting their firm, but more importantly to understand their clients!
As we conclude our four-part series to gaining operational foresight, it’s time to have fun with the intelligence we’ve aggregated, visualized, and analyzed while we play a few rounds of “What-If?” I personally enjoy this part of Big Data analytics and business intelligence. It’s the point where hypotheses are tested by layering, modeling, adjusting, and twisting actual data to determine the best possible outcome for future strategies.
The first phase of creating “What If” scenarios is often called “modeling” – the ability to evaluate business performance at both the historic and projected levels simultaneously. Through modeling, not only can you assess real-time information across all systems such as financial, billing, and payroll in a singular view, but also conduct on-the-fly analysis against other key performance metrics such as profit margin, collections, and partner equity.
A Note of Caution
Although modeling provides substantial insight into future performance, the results predicted through modeling alone should not be stamped FINAL, as countless assumptions based solely on current trends have fallen short.
What-If analysis is the next step to test the viability of the modeling exercise. Think of What-If’s as the stress test. Here you examine the strength of your modeling exercises under different circumstances by layering in variable data – those data points with levels of uncertainty.
Let’s elaborate. Some data elements remain 100% fixed. Other data elements such as expenses, profits per partner, and employee head count can fluctuate. The question becomes, “If these variables deviate from our model predictions, what operational impact will we experience?” What-If analysis enables to you instantaneously see the impact of let’s say a 3% increase in partner equity across the firm.
Work Smarter, Not Harder
Most “What-If” scenarios are performed via a function in Excel, however, there are more advanced analytic tools such as Helm360’s Terminus that take the “Guess Work” out of modeling and What-If-ing. Business users at any level (firm, partner, associate, practice group, etc.) can quickly assess, twist, turn, evaluate, roll-up, drill-down, layer, and save the most optimum outcome for distribution and/or assessment.
To reach the best possible future, it is crucial to look beyond the past. Basing future strategies on past performance alone can lead to deceptive outcomes. Don’t be caught off guard. Take the time to perform modeling and What-If exercises to learn the important answers to, “What happens if?”
Helm360 takes the “guess work” out of business analytics while significantly reducing costs and processing times of advanced reporting initiatives. Leveraging the most state-of-the-art technological advancements, Helm360 allows businesses to view data in real time. Our team of highly innovative, passionate, and intelligent people that thrive on ingenuity are committed to delivering exceptional solutions and services that exceed expectations.