Or, put another way, get ready for the “Gunfight at the OK Corral” in the core business systems space.
It’s no surprise that ERP (Enterprise Resource Planning) systems have a growing following within professional practice firms. Why? Well, an all-in-one box solution which embraces finance, CRM, business development, HR, resource management and project planning is surely of interest if it can be a viable solution for your firm. If it were indeed a “shrinkwrapped box” sat on a shelf there would also be a large sticker on the box proclaiming “used by most of your clients” too.
Look closer and you’ll see it offers “end to end processes” spanning multiple functional areas, meaning, for example, that your recruitment process links with your new starter process, which links with your financial system (your new recruit has a billable rate, say) and which links with your performance management system (as you appraise your employee) and could even link with your CRM system (since they may have worked with a targeted client in the past). Key the information in once and watch the system steer the process around your firm.
Top that off with strong reporting capabilities, self-service provision and a feature list that’s as long as the Oxford Dictionary and this isn’t a mere gunfight. This is the Terminator running around with a 12 barrel Gatling gun.
ERP isn’t necessarily a “no brainer”, however. In the legal sector the opposition are a host of best of breed applications, each of which have evolved and matured to meet specific requirements (finance, credit control, time recording, CRM). Integrations often exist and applications have broad user bases, versus the handful of legal ERP implementations currently out in the wild. Some vendors are also far from just sitting down too; witness Thomson Elite’s total rewrite with 3E, a product with a considerable focus upon workflow capabilities.
But step back a little and a few things strike you. The first is that firms often have no problem spending hundreds of thousands on their financial systems which, after all, manage many compliance areas and drive the billing of the whole firm. CRM is also often a candidate for heavy investment because it supports “sales” which in turn supports your turnover. The weak link, investment-wise, are HR systems, despite your people costs being potentially more than half your turnover in a professional services business.
It’s not uncommon for a law firm to spend half of the cost of a financial system on a CRM solution. It’s not uncommon for a firm to spend less than one tenth of the cost of a financial system on its HR system. You might not want to have such strength in depth across your business and, crucially, might fear the cost of putting that in place. You’re not a retail business looking to optimise its supply chain; you’ve no warehouses that you are planning to close. You may already have one or more good systems and don’t see having fully joined up end to end processes as a reason to move.
It’s not as simple as that, however. Many CRM systems should be marketed as “part of a sales and marketing system” because they don’t support the entire business development lifecycle. HR systems are arguably one of the most untapped areas within law firms, especially since a strong focus upon performance management within a business can have a very credible effect on the top and bottom line. Implementing ERP need not mean a multimillion pound project either, with the likes of SAP and Oracle offering preconfigured solutions to many industry sectors or the likes of Intalec offering its legal SAP solution which they claim is fully SAR compliant.
We’re therefore genuinely at a watershed right now; in five years’ time most firms could have ERP or be implementing it. Or perhaps only some of them. Perhaps none. Some firms may buy an ERP system but only use part of it initially and expand the use of the system where and when appropriate. That’s already happening and that approach may become dominant over the next few years.
So “Why ‘Ave ERP”?
Because it might be right for your firm and it might be the best solution for you. If the likes of SAP win enough critical mass in the legal marketplace, it could genuinely be game over for the other vendors. They won’t give in easily, of course, and are far from beaten yet.
How would you know if it is the best solution for you?
Well, being the boring consultant, by making sure you know what you need and what opportunities you are looking to exploit. There’s no substitute for the hard work in thrashing out needs and opportunities within your business and then looking at solutions in detail in light of that.
Yes, that’s potentially more work for you, could involve more change for your business and will demand some serious collaboration between Directors…but, well, it might cost less overall, prove more straightforward to implement and manage, have greater opportunities and benefits and give you strength and depth across your firm, arguably the right platform for a fast growing business. Food for thought.
For many firms then, it should be a contender. Whether it is the best solution though, only you can find out. One thing is for certain, however. This is a gunfight.
Damian