How to Leverage Data to Boost Your Firm’s Performance
December 3, 2020
By Geniene Scherer, CPA
Today’s businesses have access to more data than ever before. While many have found ways to use it to their advantage, some aren’t sure where to begin. If the latter describes your professional services firm, take heart: Leveraging your data may be easier than you think.
At Abdo, Eick & Meyers, we’ve helped hundreds of organizations, including professional services firms, use data to drive actionable insights and optimize performance. Here are a few tips for getting started.
The first step: Assess your business challenges.
At this moment there are many challenges impacting businesses, from increased operating costs to resource constraints to information gaps. What’s keeping you awake at night?
Identifying the challenges your firm is facing gives you areas of your business on which to focus—and this is your “starting point.” For example, typical areas of focus for professional services firms could include productivity, billing and realization, cash receipts, and profitability.
Identify key questions for each area of focus.
Now that you know where your challenges lie, you can identify the questions your data should answer. Your goal is to understand the critical metrics and drivers of each area of focus. The better the quality of your questions, the more valuable your data insights will be. For instance, using the areas of focus I mentioned above, key questions might include the following:
Productivity: What is staff utilization, by person, by department, and across the company for any given period, and how does this same period compare to the prior year? Are we increasing hours and production year over year?
Billing and realization: How many hours and dollars have we billed clients each month, and how does this compare to the same period last year? Which staff and departments have the most total billings, net billings, and adjustment to billings?
Cash receipts: How do cash receipts vary through the months in total? How do cash receipts by department and line of business compare to target, by month, and YTD?
Profitability: What clients, departments, projects, and types of work are most profitable?
Analyze your data.
Once you’ve gained an understanding of your business and established the questions your data should answer, the next step is to conduct a data analysis. When we do this for a client, we start by determining where the company’s data resides as well as how it’s structured. Next, we assess how the company is using the data. As a final step, we build a data model along with the reports and dashboards that give our client real-time access to data—i.e., answers to their key questions at any time and from anywhere.
What could real-time access to data do for your bottom line?
If you’re unsure of how to make the most of your firm’s data, we’re here to help. Our Strategic Data Analytics team can work with you to identify your firm’s areas of focus and key questions, so you can start on the right track. From facilitating your data strategy sessions to conducting a data analysis, we’ll deliver a solution that unlocks a wealth of meaningful, actionable insights for your business. Ready to get started or learn more? Contact us today.
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