Dealing with data diversity

By Michael Warren

The success of a professional-service firm is largely dependent on its ability to harness its knowledge, skills and experience and match these to the needs of clients and prospective clients. As most firms have found, achieving this is easier said than done.
Part of the difficulty is that addressing the need has been completed over time. For example, practice management and time recording was computerised in the 1980s; marketing (or at least mailings and list management) in the 1990s; and in the ‘naughties’, document and knowledge management (KM) followed.
This article explores one particular aspect of this conundrum, namely the role of an effective data-management strategy and the tactics that you might need to deploy to achieve data and possibly system integration.
In particular, it will explore the business drivers for system integration: why firms are integrating their client-relationship-management (CRM), practice-management and KM systems, and what benefits you can expect to achieve if you tackle this complex problem. Second, it will examine the implications of system integration for the effective management of data, as well as the likely challenges.

A phased approach
As with all system projects a phased approach is always recommended so that objectives can be set, theories tested, effort and cost identified, and deliverables defined at each stage. This is particularly true when undertaking an exercise in data integration as not only does business have to continue as usual, but there could also be serious implications when making changes to systems that might have pre-existing links or feeds to others.
The reason a phased approach is so important is that at each phase it is necessary to test theories and assess whether objectives have been achieved with an acceptable return on investment in a controlled manner. Consider that each department or practice area of most firms has developed its own approach to key business processes such as client acceptance/inception, business development and client partner allocation. Often these don’t bear much resemblance to the firm-wide strategy, but undertaking any project in a phased manner enables it to be evaluated carefully.
This silo approach to managing data has led to a plethora of systems and databases springing up across most firms, all of which contain various amounts of information, good and bad. The challenge firms now face is to provide the Holy Grail of CRM – a 360-degree view of a client.
The phases to be considered when undertaking a systems or data integration project might be:

Consolidation. Extracting data from the systems under consideration and initially bringing them together in one consolidated format for analysis. The purpose is to attempt to create an initial data map from the legacy systems to one consistent format and identify consistency and completeness issues that may need to be addressed at a later date;
Taxonomy. Taking a more intelligent look at the way in which data from each system is managed and segmented and identifying where there are correlations or gaps. For example, industry sector or work type might use different tables in KM and CRM, which might need to be brought in line to provide a more consistent basis for segmenting clients and matters;
Auditing. Taking a more detailed look at the data within the consolidated data set and starting to evaluate the clients and prospective clients in terms of importance and value-related criteria. The reason an audit based on importance is so vital to the firm is that it is almost certainly true there is not an unlimited amount of time and money, so attention needs to be focused on the clients that are of most value to the firm. If this works, and a strong business case is created, then it is always possible to consider rolling the integration out to other segments;
Integration. Starting with a small pilot, then expanding based on success to a wider data set, the actual physical integration of the data – either between systems, or into one single data warehouse or repository – for analysis. A fairly common business driver for integration is the implementation of portals for key clients. To support this it is necessary to ensure the data presented to those clients is accurate. The focused approach proves the concept clearly makes sense;

Post-integration. Implementing and encouraging business process change so that data quality and integrity is maintained in source systems. This must always be business benefit-driven, as extra effort will not be put into input if the outputs are not worth it.

A financial example
A good example of how data and business process can often hinder integration is the way in which practice management and marketing systems hold and manage data. Increasingly those that are using CRM systems want to be able to extract summary financial information from their PMS and identify ‘key clients’ using real financial information – not just static lists produced by the accounts department once a month.
The process of matching billing data with marketing data immediately identifies some problems. Practice management is typically driven from the perspective of the job in hand, namely the matter (or matters over time, which adds a further dimension of complexity), but marketing data usually takes a wider, more outward-looking approach. That’s not to say that compliance and finance partners don’t wish to reflect the legal entities as they are truly registered, but it’s not always within their control to do so. It is also fair to say that most firms have a ‘one step removed’ approach to client matter inception – for example, that the fee earner fills in a form, which the secretary will then enter onto the PMS. Marketing systems, on the other hand, now tend to promote direct entry, or at least extraction of data from the point of direct entry – for example, Outlook.
The following example demonstrates that the way in which data is captured on PMS doesn’t easily promote a true evaluation of the value of a particular client to the business. This means the consolidation phase will need to carefully consider how to ‘de-duplicate’ client information and where it is logical and safe to do so.
Figure 1 is a more detailed illustration of the challenges that might be faced when trying to consolidate data between these two systems. And those who depend heavily on referral networks and intermediaries know only too well how to identify and measure the value of the referring client against the end client.

A focused approach
So how might you go about meeting this complex but increasingly necessary challenge? The watchword is focus. Returning to the earlier point about auditing data based on importance criteria, it’s possible to identify the clients that are most valuable, such as:

Clients that have at least one open matter;
Clients where activity (time or work in progress) has been recorded in the past two complete financial years;
Clients that have relationships with key firm partners;
Clients that have activity recorded from more than one department (identifying firm-wide cross-selling clients);
Clients that have been actively marketed to – or have responded to events;
Key clients or those in a strategic industry sector;
Clients for whom pitches have been submitted or converted;
Reciprocity and intermediaries’ contacts.

Once the data has been consolidated it starts to become possible to create a cumulative scoring model where the presence of each of the criteria above is rated. Adopting this approach and creating a more statistically-robust analysis model – rather than simply relying on a list of top clients – enables the firm to get a more in-depth understanding of key clients and those with real potential. The data can then be tiered based on the final score, which might look something like Figure 2.

Encouraging change
Finally, it is essential for the project to be focused on clear business benefits. This means managing and senior partners must be involved. While much of the delivery might be done by a project team, often consisting of marketing, finance and IT, the board must also be clear what the project is aiming to achieve and over what period of time. Disappointment occurs when there is a mismatch between the expectations of the team managing the project and those paying for it.
For instance, a recent client information project undertaken for Lewis Silkin LLP focused on business benefit. The project started with a series of brief presentations to the board so they could get a clear understanding of the expected deliverables and time frame. Once this was achieved, the emphasis switched to simple, phased objectives that could be clearly explained and clearly understood.
Mark King, business development director of Lewis Silkin, explained: “The business driver behind the project was to harness the firm’s culture of effective, innovative use of technology to improve customer service and build team work. A specific aim of phase one on our journey has been to provide everyone in the firm with an integrated, comprehensive view of everyone’s clients and business contacts.
“The approach pre-implementation was very much to ‘build the pain’ that fuels the demand; to generate enthusiasm; and to build an internal conviction that the CRM system could minimise pain associated with marketing implementation as it then stood. Simply put, in phase one it was important to tackle the burning day-to-day issues of contact data and mailings.”
What this shows us is that the issues described earlier, which can be quite complex and difficult to address, can be broken down into manageable chunks so that benefits can be identified and the project team don’t over-promise or raise expectations that can’t then be delivered. It also demonstrates that having a clear goal – brought into at the highest level of the firm – is vital.
If embarking on a project to consolidate client information, or integrate systems, it is worth remembering the children’s riddle ‘How do you eat an elephant?’ The answer: one bite at a time.

Michael Warren is client services director at Shamrock Marketing. He can be contacted at michaelw@shamrock-marketing.co.uk