Effective project management for financial system implementations

More often than not firms are using financial accounting packages that were installed 15-20 years ago and have only been updated on a sporadic basis. During the initial system implementation, most firms focused simply on the basics, hours and rates. There was little consideration given to the differences in practice groups, their unique individual business models or the possibility of office expansion. Given the constraints and limitations of many of these aging financial accounting systems, a sea of Excel spreadsheets was developed to provide and evaluate critical analytical data. Redwood Analytics, Hyperion, Oracle and other bolt-on business intelligence solutions were available to those who could afford the cost of installing and maintaining these applications. Much of the added analytical ability has now been built into the financial accounting packages of today.

As firms are considering the future of their financial accounting systems, it is important to understand that an effective project management process needs to be established for a successful system conversion and implementation. The project management function serves throughout the system implementation lifecycle, which includes three distinct phases:

1. Plan and evaluate
2. Build and test
3. Cutover

The following describes key activities of each phase in greater detail.

1. Plan and evaluate

The implementation of any new system presents an opportunity for adopting leading practices to leverage the software and improve a wide range of financial, project and operational processes and procedures. The initial project planning phase is critical and includes the confirmation of the project objectives, scope and approach. By focusing on the end product of your law firm’s activities you ensure that relevant system and data requirements are addressed.

Planning the conversion to a new system may not just be a matter of replicating the current landscape but can be prophetic in nature to harness the value of new systems, reflecting the firm’s best attempt at addressing the future needs of an ever changing strategic plan. What will be the future business needs of the law firm, how does the firm want to organize their business and the underlying databases?  What data will be clearly essential as the firm grows? 

The underlying databases have been historically set up to record and report on an individual attorney’s hours, rates and realization. Those basics are no longer adequate nor do they provide all the information law firms need to analyze the profitability of individual client matters, determine which practice groups are profitable, determine which practice groups are being subsidized and also be able to manage multiple office locations. To analyze profitability, what payroll and FTE/headcount information now needs to also be retained within the accounting software database? Only with this data can a firm effectively manage operations, competitively price their alternative fee arrangements and determine where to allocate firm resources.