Buckinghams LLC

Business Case for a Credit Control Dashboard

Presented by: A Student

Table of Contents
1. Introduction to Business Case ............................................................................................................. 3

2. Context: linking corporate strategy to the Proposal ............................................................................. 3

3. BI System Proposal .............................................................................................................................. 4

3.1 Overview ................................................................................................................................... 4

3.2. Strategy Alignment.................................................................................................................... 6

3.3. Existing Technical Infrastructure ............................................................................................... 6

3.4. Proposed BI System: Technical Architecture Issues ..................................................................... 7

3.5. Cost Benefit Analysis ................................................................................................................. 9

3.6. Risk Assessment ..................................................................................................................... 10

4. Summary .......................................................................................................................................... 12

Appendix 1: Company Overview

Appendix 2: MSS Assessment

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1. Introduction to Business Case

This document presents and justifies a proposal to implement a new performance

management dashboard for credit control within Buckinghams LLP which links into the
existing Balanced Scorecard.

The key deliverables of this proposal can be identified as follows:

▪ A Credit Control Dashboard itemising average debtor days by Practice Area, Client
and the respective value of debt
▪ Debtor Days KPI added to the Firm’s existing Balanced Scorecard
▪ A Credit Control data mart based on the existing Data Warehouse

The benefits of implementing the dashboard, as well as the costs and risks involved, are
highlighted as part of this proposal.

2. Context: linking corporate strategy to the Proposal

As described in Appendix 1, following the changes to the legal sector as a consequence of

the Legal Services Act 2007 and the introduction of Alternative Business Structures,
Buckinghams LLP has seen an influx of increased competition. Essentially, Alternative
Business Structures allow non-lawyers to own and invest in law firms and, as such, this has
resulted in new entrants into the market such as Co-Operative Legal Services and the
strengthening of existing competition through acquisitions and mergers via private equity
investment. Clients are also passing their own economic pressures onto law firms expecting
more competitive pricing structures and the replacement of costly hourly rates with fixed
fees.

To combat the changes in the legal sector, Buckingham’s Board of Directors introduced a
new corporate mission identifying a new Vision, set of Values, Strategy and Behaviours. This
is presented in Appendix 1 and summarised in Fig 1 below:

Buckingham’s Mission
Vision Strategy
 To provide the most authentic exceptional A leading law firm with superb client
client experience to every client, every time relationship management, profile in all our
key sectors and innovative technology.
Values Behaviours
 Team work and respect  Thought Leadership
 A commercial approach  Financial Hygiene
 Clear decision making  Client-focus
 Constant improvement  Market awareness
 Innovation

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Fig 1: Buckingham’s Mission

In an attempt to satisfy this mission, Springboard - a significant programme of projects - was

instigated utilising Lean Six Sigma methodologies in an attempt to remove waste processes
and thereby gain greater competitive advantage. Inherently one of the core benefits of Lean
Six Sigma is the financial savings that can be made by streamlining processes. This clearly fits
into the Financial Hygiene behaviour identified by the Board.

Financial hygiene is a critical factor in the success of any organisation, but in the recent
economic downturn numerous law firms have gone into administration due to poor
financial hygiene. Contributing factors to poor financial hygiene in law firms can be seen as
follows:
 Quarterly billing cycles increasing the lead time for cash receipts.
 An increase of bad debtors due to the economic situation: should a firm work for
people who cannot pay?
 Ownership of debt. Historically credit control functions are responsible for chasing
debt, but should all staff be responsible for recovering debt?

These challenges to Financial Hygiene have instigated an additional lean six sigma project
relating to Credit Control investigating obstacles to effective credit management. This
project identified that a lack of (1) appropriate management information, and (2) ownership
of debt from fee earners, was having a detrimental effect on credit management: this
proposal’s core function is to address these two issues.

3. BI System Proposal

3.1 Overview

It was identified in the aforementioned effective credit management project that Credit
Control did not feel like they had appropriate visibility of all debt at an appropriate level:
they could generally see which bills had been paid or were outstanding, but existing
management information targeted operational level support.

A brainstorming session was conducted with core members of credit control, including the
team manager and a credit controller along with the finance business manager (who is
responsible for finance management information reporting). This session quickly identified a
number of issues, which are depicted in Fig 2 below.

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Fig 2: Issues arising from the Credit Management Brainstorming sessions at Buckinghams
LLC.

This proposal is made specifically to address these issues: a new performance management
dashboard is needed that will pull together a predefined set of new and existing metrics
from the data warehouse. The use of the data warehouse as the source data feed avoids
report fragmentation (an identified existing problem) and brings about a ‘single source of
truth’ for credit management reporting. The metrics that the dashboard will include are as
follows:

Measures Target Recipient(s) of the Measure

% of debt/billed Directors

Average Debtor Days Head of Practice Areas

Amount of Debt Client Partners

Bill Receipts Fee Earners

Work in Progress Finance

WIP Days Finance

To ensure standardisation of reporting and a single source of truth for performance

management, the existing Balanced Scorecard will be extended to include the new Credit

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Control metric, along with a drill down ability into the new credit management dashboard
and associated metrics. An element of self service will also be available to intermediate
users via PowerPivot and Excel, and for power users via SQL Server Reporting Services.
Existing management and employees will have access via the standard dashboard report on
the intranet.

It is anticipated that the development work required for this implementation will take
approximately 2 weeks at an expected cost of £7,950, with potential bad debtor loss of
£50,000 (but the anticipated benefits of this proposal will be £132,000) over 12 months; in
other words, a net gain of £74,050 over 12 months (further details of the CBA calculation
can be found in Section 3.5 below).

3.2. Strategy Alignment

Numerous law firms in the recent economic downturn went out of business due to poor
cash flow, usually due to the inability to bill clients in a timely fashion compounded further
by the tardiness of bill receipts. This is one of the reasons why the Board of Directors made
financial hygiene a core behaviour in the mission statement. This proposal endeavours to
tackle this problem by giving management at numerous levels the appropriate information
to manage debt. By identifying clients that have large volumes of debt or are notoriously
late payers, conversations can be had to facilitate quicker payment of bills, thus improving
cash flow. Of course this strategy should be considered with due regard of the client focus
behaviour identified by the Board, but with the information displayed within this dashboard
management can decide whether appropriate allowances can be given to specific clients in
certain situations.

3.3. Existing Technical Infrastructure

The bulk of management information at Buckinghams LLP is currently developed via

federated architecture from numerous disparate source systems, all of which are on
separate databases on a multitude of SQL Server 2008 instances. To prevent any heavy
burden on source systems the data is immediately copied onto a single SQL Server 2008
instance via transactional replication. (An assessment of existing MSS at the Company can
be found in Appendix 2.)

The existing credit management reports are no exception to this, and have been built
utilising SQL Server Reporting Services pulling the data from the replicated source system
databases via direct SQL Stored Procedure calls. These reports have been built over a period
of perhaps 8 years, with some of these being rewrites of even older legacy Crystal reports.
There are approximately 15 current credit management reports in existence.

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This approach has led to a number of issues with the existing report mechanisms:

1. Nobody knows which of the reports to go to for the standard answers they require.
2. New reports have been added and existing reports have been amended, but not all
reports have been implemented utilising the correct logic.
3. Existing report procedures are overly complex and not constructed for quick
reporting analysis.
4. Reports have been built by different people over time, many of whom have left, and
report logic has been lost as it was not fully documented.

In conclusion this approach has not resulted in a single source of truth for reports, many of
which are out of date and inaccurate. Consequentially it is currently very difficult to manage
debt to satisfy the Board’s vision of financial hygiene.

3.4. Proposed BI System: Technical Architecture Issues

As part of the Springboard Project, a data warehouse utilising a form of ‘hub and spoke’
architecture is currently in implementation. The intention is for all management information
to be delivered via the new data warehouse to remove any fragmented and inaccurate
reports from existence, thereby achieving a single source of truth. As such it is entirely
appropriate for this proposal to utilise the data warehouse as opposed to utilising the
existing mechanisms.

The data warehouse has been built using Wherescape Red. The existing data flow is as
follows:
 The data is pulled from multiple SQL Server instances (incorporating Actuary,
CASEFED and HRCas data) onto a SQL Server 2012 where the information is
transformed in the staging area (according to the identified and agreed business
rules) and loaded into the Data Warehouse.
 Utilising SQL Server Analysis Services a number of OLAP cubes (data marts) have
been developed covering Financial, Balanced Scorecard (BSC), HR and Client
Reporting.
This proposal will see data fed directly into both the existing BSC and Finance data marts.

As aforementioned, the following metrics have been identified by the Credit Control team
as imperative for effective debt management:

Measures Views

% of debt/billed Directors

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Average Debtor Days Head of Practice Areas

Amount of Debt Client Partners

Bill Receipts Fee Earners

Work in Progress Finance

WIP Days Finance

Utilising these defined metrics to guide development, there will be three main deliverables.

1. A new Credit Control Data Mart

2. A new Credit Control Dashboard
3. Credit Control integration with the Balanced Scorecard.

More detail on these deliverables are as follows:

Credit Control Data Mart

This will utilise the metrics identified as well as appropriate dimensions to assist with the
multi-faceted report requirement by Credit Control. The dimensions will enable the
identified views and will consist of dimensions for client, time, matter header, bill header
and hierarchy history. The end result will see an OLAP cube that can be utilised for
deliverable number 2 and a data source for intermediate users via Excel and PowerPivot,
and power users via SQL Server Reporting Services.

Credit Control Dashboard

Utilising the Credit Control Data Mart a dashboard will be developed via Reporting Services
displaying at a top level the pre-described metrics. It will show appropriate trends of these
metrics over the current financial year and allocate RAG (Red-Amber-Green) colours
accordingly. It will have drilldown and filter functionality to show debt via Client or via Fee
Earner.

Integration with the Balanced Scorecard

The new metrics will be added to the existing Scorecard data mart (KPI Monthly Rollup). The
structure of this OLAP cube will not change and will keep its form as follows:

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The new metrics will be added to the Finance area of the Balanced Scorecard which
currently only has 3 metrics.

Although this proposal has identified three deliverables it is entirely possible for deliverables
1 & 2 to be developed exclusively and this will lead to reduction in development time. It is
anticipated that development work for all deliverables will be approximately 20 days for all
deliverables or 12.5 days for deliverables 1 and 2 alone.

3.5. Cost Benefit Analysis

Following an analysis of the appropriate stakeholders and the costs of this proposal, the
following Cost Benefit Analysis (CBA) has been conducted. As this proposal intends to utilise
existing infrastructure most of the tangible costs such as hardware are not applicable. The
analysis is over a 12 month period and, as shown below, the net savings are expected to be
in the region of £74,050.

Benefits

Tangible
Increased cash collections £10,000 per month x 12 = £120,000
Reduce bad write offs £1,000 per month = £12,000
Total = £132,000

Intangible
Reduced debtor days (by between 2 and 4 days) to assist with quicker payment of bills
including staff costs.

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Single source of truth
Standardised reporting removing ambiguity in reporting leading to efficiencies in credit
control
Improved performance of fee earners
Improved client relationships
Access to innovative architecture

Costs

Tangible
Business Analysis – 1 Day @ £200 a day = £200
Design and Test (BI Manager) – 3 days @ £350 = £1,050
Development time - 1 x Developer x 15 days @ £250 a day = £3,750
Test time – 1 x Credit Control Analyst x 4.5 days @ £100 a day = £450
UAT Credit Control Manager – 5 Days @£400 = £2,000
Training Costs – MDX training for OLAP querying - £500
Loss of bad debtor clients. Impact unknown but estimated £50,000 based on existing bad
debt.
Total =£57,950

Intangible
CASEFED data mart project slippage estimate of 2 Weeks
Impact on existing system performance

Total Net (Tangible) Benefit = £74,050 over 12 months

3.6. Risk Assessment

Based on Moss and Atre’s Risk Assessment Matrix, the following have been identified as the
major risks for this proposal:

Technology – Green

In reality the data warehouse server has been over provisioned with 8 Cores and 32GB of
ram and 5TB hard disk. Currently only 5% of the disk has been utilised and, as the server has
been virtualised, there is scope to increase the ram up to 64GB and the Cores to 12. It is
anticipated that there be a small increase in server traffic but this is expected to have no
detrimental impact.

Complexity - Green

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The complexity of this proposal is fairly simple as it already utilises much of the existing tried
and tested mechanisms. The solution is primarily a straightforward implementation of a
new data mart, dashboard and self-service model.

Integration – Amber

With the introduction of the new Practice Management System it is entirely possible that
integration with the new billing transactions could result in a moderate amount of changes
to the data marts once implemented. The new database schema is visible but this has not
been finalised. In general, integration with the Balanced Scorecard should be fairly
straightforward as the finance area is already pulling data from the main KPI data mart.

Organisation – Amber

Although it is expected that the defined metrics are adequate, the biggest organisational
risk relates to the lack of buy in from Fee Earners, who may feel the additional performance
metrics are a step too far, and a lack of management of the metrics from lower
management. Care needs to be taken to ensure that they are adhered too as this will impact
the potential for future project gains. To mitigate this risk the Board need to communicate
the importance of the new metrics.

Project Team – Green

It is anticipated that there are no major risks within the project team as this project can be
suitably resourced by the BI Team. As the technology is already in use there are no expected
training requirements.

Financial Investment – Green

The only major financial investment relates to the investment of time and, as stated in the
CBA above, this is anticipated to be no more than 20 days. It is anticipated that there will be
an instant return on investment largely from the Credit Control process efficiency gains and
as the costs are minimal these should easily offset the costs especially with the anticipated
reduction in debt write-offs.

Overall Proposal Risk – Green

Having identified the main risks to the successful implementation of this project it is
anticipated that the risk is very low. Although there are a number of amber risks, there is

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potential to mitigate these risks with effective communication from the Board and
additional evaluation of the new Practice Management System.

4. Summary

This document has presented and justified a proposal to implement a new performance
management dashboard for credit control within Buckinghams LLP which links into the
existing Balanced Scorecard. This involves:
▪ A Credit Control Dashboard which itemises average debtor days by Practice Area,
Client and the respective value of debt.
▪ Debtor Days KPI added to the Firm’s existing Balanced Scorecard.
▪ An underlying Credit Control data mart based on the existing Data Warehouse.

The benefits of implementing the dashboard, as well as the costs and risks involved, have
been assessed as part of this proposal. Overall, at least in terms of strategic objective
achievement, financial (and non-financial) return and risks, the project appears very
beneficial for Buckinghams LLC to implement.

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