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World Headquarters:      Case Study: Bonestroo                                                          Though Bonestroo f...
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Decision Making At The Best Run AE Firms

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Decision Making At The Best Run AE Firms

  1. 1. White Paper Decision Making at the Best Run AE FirmsContents1 Executive Summary2 Smarter Decisions, Better Results Creating a Culture of Fact Versus Gut2 Setting Expectations: Three Considerations Executive Summary achieving a competitive advantage by creating3 BI Best Practices Historically, architecture and engineering (AE) cultures where BI sits at the core. In this new AE5 Conclusion firms have been able to rely on the merits of business dynamic, the premium is on decisions their work for success, growth and profitability. informed by data and data analysis.6 Case Study: Bonestroo Accordingly, decision making used to be relatively Because of its many merits, BI has been widely informal, and was largely guided by gut instinct discussed and adopted in other industries— and/or considering past performance as a especially in financial services and retail. Little barometer for future performance. While that is attention has been paid, however, to how AE still true in many organizations, the opportunity firms can harness the power of BI in their own for AE businesses is changing based on the organizations. Given an AE firm’s singular focus emergence of Business Intelligence (BI) as one of on projects, this factor becomes increasingly today’s most popular business disciplines. significant: what works for a credit card BI, also known as fact-based decision making, company will not have the intended effect for an performance management or analytics, is architecture or engineering firm. significant because of its ability to significantly To fill this void, Deltek’s experts worked with impact growth and profitability. Equally important, leading consultants and Deltek Vision customers Business Intelligence gives firms the ability to to create this best practices whitepaper. By foresee and proactively avoid problems that providing an inside look at how the best run AE could negatively impact performance. firms are using business intelligence to improve BI flips the historical decision making process company-wide performance, we are offering on its head: in the past, decisions were based specific, proven lessons that peer firms can learn on intuition, without the benefit of a concrete, from. data-driven foundation. Today, firms are instead1 deltek.com
  2. 2. White Paper Decision Making at the Best Run AE Firms Smarter Decisions, Better Results Setting Expectations: Three Considerations Is your firm spending a lot of time and effort AE firms have their own distinct processes managing problems after negative effects have and cultures. In considering how to apply BI within already taken their toll? Are you struggling with their organizations, it’s important to start with data accuracy? Spending more time finding data three factors: A firm’s maturity level, defining and than analyzing it? Or worse, basing business measuring as specifically as possible and creating decisions on sheer guess work? These are the a clear bias towards action. hallmarks of firms running their businesses on gut versus fact, and the prime candidates that could 1. Consider Your Firm’s Maturity Level benefit from a BI solution. Christine Brack, principal, business planning for On the other hand, firms that already have ZweigWhite, stresses the importance of assessing formal BI strategies in place are taking a different a firm’s “maturity level” first and foremost.It’s clear that approach to decision making that is both How committed are you to changing? Thisfirms that deliberate and methodical, resulting in a more accurate perspective of their business. Consider factor is key, Brack says, noting “A firm using business information to make decisions aboutsystemize having a historical, current and future view of firm growth and using metrics to improve, has to havetheir BI or performance with which you can: a culture that is prepared for these initiatives and expect change.”fact-based • Spend more time analyzing data and making At the same time, strong communicationdecision- decisions than running reports • Share performance data across the firm in role- practices are an absolute must for BI to delivermaking appropriate ways value. A firm that is run based on numbers and metrics (all of which are shared across theprocesses • Use goals to drive the decision-making process organization) is vastly different from one thathave a strong And perhaps most important: simply collects reports that management doesn’t use (and certainly doesn’t share). Accordingly,competitive • Predict the impact of decisions on firm consider the cultural implications of information-advantage performance based business strategies, and how they can be impacted by a lack of structured communication.over those These are the distinct, and sometimes critical,that don’t. advantages that BI provides. When looking at 2. Be As Specific As Possible what BI offers, it’s clear that firms that systemize their BI or fact-based decision making processes Once you’ve decided that BI has a role within your have a strong competitive advantage over those firm, it is time to create specific initiatives. After that don’t. The challenge then becomes where to identifying what you’ll measure and improve, it’s begin and/or how to best manage the existing BI imperative to be laser focused on ensuring the programs in place. data is easy to access, easy to read and relevant to the appropriate decision makers. Additionally, it is essential that firms identify goals for all of the data that is being measured so that it’s clear what success looks like. Without goals, measurement2 deltek.com
  3. 3. White Paper Decision Making at the Best Run AE Firms becomes irrelevant. Brack emphasizes this, transparency. Not only in sharing the numbers, stating, “Leaders and managers need to but in talking about how decisions were made concentrate on data that is actionable, rather than based on that information. informational. In other words, get the right data Christine Brack adds that communicating theBonestroo and do something with it.” firm’s business drivers to all levels of the staff ishas made By being as specific as possible, firms will have equally important. While not everyone needs to a clear sense of the numbers it wants to change be fluent in finance, a baseline understandinga strategic and what its benchmarks are. With acceptable and common vocabulary facilitates thatchoice to move ranges developed and decisions made as to communication. which direction the numbers need to go, AEaway from companies are putting themselves in a position to Leverage BI softwarebasing project, be successful. To be as effective as possible, Morton stresses the importance of leveraging purpose-built BIpersonnel or 3.Take Action tools (like Vision Performance Management).other decisions Finally, once a firm has quantifiable data it needs Though these are relatively simple to implement,on gut instinct. to be able to apply it accurately. This means that Morton reiterates their significance, explaining someone has to look at the numbers and be able that these systems, “Were designed specificallyInstead, the to decide if they can be changed in a favorable to do the heavy lifting for you. Firms that attemptpremium is manner. If it has been determined that proactive to use multiple spreadsheets that require action can be taken, the firm also has to decide manual calculations run the risk of negating theplaced on how much change it wants and be willing to make very purpose of a BI strategy.” Firms employingdecisions the necessary changes to produce results. As a spreadsheet strategy, she adds, can end- the last step, a feedback loop must be in place so up creating silos of information within theinformed by that the effect of a change can later be evaluated organization and/or generating data that isn’tdata and data (measurement is, after all, BI’s fundamental reliable or consistent across the company.analysis. principle). For successful optimization of BI, action is Set realistic goals critical. The business has to be ready to make With the changing business atmosphere, it operational or strategic changes– not an easy has become much more important to focus feat, and one that doesn’t happen by accident. on the future rather than looking at past firm Change, therefore, requires many willing performance. While this means setting immediate participants across the firm, and must be led from goals to make improvements, it also reaffirms the top-level of the organization down. that these goals should be realistic. Likewise, it is crucial that firms are careful to not try to tackle BI Best Practices too much at once. Once AE firms have committed to pursuing For this, Brack recommends to, “Choose a BI strategy, Deltek suggests the following best metrics you want to focus on, and start small. practices: As time goes on, you might be ready for more advanced metrics. But start by getting managers Communicate openly and often and leaders together to decide what’s important Vicki Morton, Information Systems Manager for the future of your firm.” at Bonestroo, says that firms with the best BI In conjunction with setting your goals, programs are those that champion openness and establish what data you have and whittle it down3 deltek.com
  4. 4. White Paper Decision Making at the Best Run AE Firms to a more manageable size. Choose benchmarks rest of the firm. Because the reports generated by that are good indicators of the health of a project/ a business intelligence system can seem daunting firm (such as utilization, WIP, backlog, effective at first, anyone who looks at the data needs to multiplier). And remember, each firm needs have at least an understanding of accounting to determine what is right for them, as these fundamentals. Similarly, throughout the company benchmarks are individually dependent on the there needs to be a common language of terms firm’s culture, size, location and strategic plans. and metrics to keep everyone on the same page. In its case, Bonestroo looks at two primary Training is absolutely key! metrics: direct hours and revenue forecasting Morton adds that, ideally, project managers (backlog and opportunities). should update a system continuously, however that can certainly be a struggle. To overcome Show the value across the firm this challenge, it’s good to start with a monthly“The ability Firms must also have a focus on proving the revenue forecast. Once people start to see theto compare value of its BI program. Driving adoption, understanding and buy-in is a critical part of information they could get from putting more into the system, they realize that updating frequentlyhistorical managing expectations – so don’t underestimate is a beneficial idea. Subsequently, when thoseinformation the need for some internal PR. Without actively same users understand that their performance demonstrating to the entire firm why a business will be measured from that information, theirand predict intelligence system is being utilized – in addition engagement with the system will continue tofuture to the the success it’s generating - the tools used increase. can quickly become seen as another piece of Though BI’s benefits are undeniable, firmsrevenues gives extraneous technology for technology’s sake. To shouldn’t expect every person to participate rightBonestroo catalyze adoption of BI throughout all levels of away. However, even the “hold-outs” (those whoan advantage your organization, be sure to openly share credit where it’s due: when there are improvements remain attached to old processes due to their familiarity, rather than their effectiveness) willover our and achievements that can be attributed to the eventually understand and adopt centralized,competitors effective use of the BI strategy, they need to be data-centric strategies in time. When someone shared with everyone! As a critical best-practice, isn’t engaged or participating while everyone elsethat aren’t this principle remains consistent with Brack’s is talking about it and doing it, those hold-outsusing this recommendation of communicating openly and will start to feel like the odd men/women out. The often to the organization as a whole. evolution of the internal culture will help drivetype of additional adoption and buy-in. Be that as it may,information.” Ensure staff understands the business if softer prodding does not work, it’s up to the firm fundamentals to decide if this is a non-negotiable component of» Vicki Morton, “You may not have 100% buy-in when you start someone’s role. Information Systems certain initiatives based on business intelligence, Sometimes sitting down with those who Manager, Bonestroo but the solution really will work for you. There’s no are having trouble and finding out what they way anyone can escape the value it brings,” says are struggling with is all that is necessary. Once Brack. someone is able to see what they can get back in While that’s true, it also requires grasping the return—in addition to the fact that it is the basis for business fundamentals. “If you’re in management, which their performance is being measured—they you should be interested in these numbers are usually convinced! anyway,” notes Brack. This may be the case for the4 deltek.com
  5. 5. White Paper Decision Making at the Best Run AE Firms Put the results to use informs every core decision the firm makes. In today’s technology-centric world, firms have Research shows that decision making at more information available than ever before. the best run AE firms is both deliberate and But BI isn’t about data for data’s sake – it’s about methodical. Bonestroo and other high-performing improving the company’s success. organizations have made a strategic choice Keep the end in mind, as BI isn’t a one-time to move away from basing project, personnel initiative. Rather, it’s an ongoing, iterative process or other decisions on gut instinct. Instead, the encompassing three steps. Only when an premium is placed on decisions informed by data organization can: and data analysis. Deltek has looked at how AE firms can best 1. Distill its data into a format that is easy bring the benefits of BI to their organizations and to consume and relevant to its own firm offers these final three recommendations: structure; 2. Use it to achieve clearly defined goals; and • Top-down support and enforcement: Creating or evolving a culture of fact-based decision 3. Implement a feedback loop that puts its data making can only happen when it’s required and to use and fosters continuous improvement enforced by management. If that isn’t present, will it truly have a successful BI strategy. old habits will resurface throughout all levels of the firm. For example, when firms look at revenue • Set appropriate metrics: Don’t try to reinvent based on project types, they may realize they are the firm overnight. Instead, identify and focus on those key metrics appropriate to your inefficient at one type of project or client type, company, such as WIP or AR. Over time, with which in turn is dragging them down. Using BI as demonstrated successes and processes in- the foundation of your marketing and business place, you can add additional, more complex decisions can help in delivering a stronger “go” metrics. or ‘no” decision. This type of intelligence will in • Focus on project management: Project its essence show firms if they are doing things in profitability fuels firm growth – nothing else. the right way—including everything from pursuing So if profitability is slipping away at the project level, your bottom line isn’t as strong as it could projects, planning projects, hiring and training. or should be. To combat this challenge, create a true culture of project management by putting Success requires commitment solid managers in place with the tools they It’s important to keep in mind that the amount of need in an environment that foster continuous improvement. Not only does this address both effort to get end-users to comply with entering project profitability and efficiency, but it also information may not be insignificant. A culture develops your staff—i.e., the future leaders of of project management and proper training, your firm. coupled with both the commitment to improve and the knowledge that progress doesn’t happen These recommendations – coupled with diligence overnight, will get a firm through these challenges. and discipline – will allow AE firms to achieve the significant benefits and competitive advantage Conclusion that BI provides. Across every part of the firm, AE organizations have more information than ever. The opportunity therefore, is to transform that raw transactional data into insights and intelligence that in turn5 deltek.com
  6. 6. World Headquarters: Case Study: Bonestroo Though Bonestroo faced some initialUnited States Bonestroo (St. Paul Minn.,) is a 300-person, difficulties in getting everyone to comply, Morton13880 Dulles Corner Ln multi-disciplined engineering, planning and says that overall, “The response was quiteHerndon, VA 20171 environmental science firm. positive.”800.456.2009 Vicki Morton, Information Systems Manager, She adds that, most importantly, “The ability says that due to the economic changes and to compare historical information and predictWorldwide Locations: challenges facing the industry, Bonestroo future revenues gives Bonestroo an advantageAustralia needed the ability to make time-efficient over our competitors that aren’t using this type of+61 8 8112 1200 and effective decisions to react to market information.” conditions. Additionally, the firm was looking BI is also critical, in that executives are betterBelgium at too many metrics, too many reports and focused on where they need to be in order to+32 (0) 2 709 2191 had generally too much information that then drive the business. With this foundation in place, became overwhelming and disorganized to company leaders can quickly determine the areasDenmark its users. Collectively, these factors cluttered that need attention, enabling them to make more+45 35 27 79 00 management’s ability to interpret the data effective decisions. Additionally, team leaders effectively and/or use it in any actionable way. have easy access to real-time information thatThe Netherlands All of this meant that too much time was spent can assist them in managing both their staff and+31 (0)20 347 3080 dealing with problems and making decisions after the firm’s projects and clients. the fact, rather than being able to stop the issuesNorway before they occurred. In a highly competitive+47 22 01 38 00 market, Bonestroo was holding itself back. To combat these problems, Bonestroo began usingSweden Deltek Vision as part of a comprehensive BI+46 (0)8 587 077 00 strategy. The firm is particularly focused on metricsUnited Kingdom that include direct hours and revenue forecastingLondon (backlog and opportunities). Secondary metrics+44 (0)20 7518 5010 that hold critical value to Bonestroo range fromTwickenham net revenue, profit, effective multiplier, sales, AR,+44 (0)20 8843 7000 WIP, write-downs and write-offs to discretionary spending.deltek.cominfo@deltek.com Deltek (Nasdaq: PROJ) is the leading global provider of enterprise software and information solutions for professional services firms and government contractors. For decades, we have delivered actionable insight that empowers our customers to unlock their business potential. Over 14,500 organizations and 1.8 million users in approximately 80 countries around the world rely on Deltek to research and identify opportunities, win new business, optimize resources, streamline operations, and deliver more profitable projects. Deltek – Know more. Do more.® deltek.com © 2011 Deltek, Inc. All rights reserved. All referenced trademarks are the property of their respective owners.6 091410-v1

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