Topic 6 Case Studies on Decision Making

7/27/2019 Topic 6 Case Studies on Decision Making

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White Paper

Decision Makingat the Best RunAE FirmsCreating a Culture o Fact Versus Gut

Executive Summary

Historically, architecture and engineering (AE)

rms have been able to rely on the merits o

their work or success, growth and protability.

Accordingly, decision making used to be relatively

inormal, and was largely guided by gut instinct

and/or considering past perormance as a

barometer or uture perormance. While that is

still true in many organizations, the opportunity

or AE businesses is changing based on the

emergence o Business Intelligence (BI) as one otodays most popular business disciplines.

BI, also known as act-based decision making,

perormance management or analytics, is

signicant because o its ability to signicantly

impact growth and protability. Equally important,

Business Intelligence gives rms the ability to

oresee and proactively avoid problems that

could negatively impact perormance.

BI fips the historical decision making process

on its head: in the past, decisions were based

on intuition, without the benet o a concrete,data-driven oundation. Today, rms are instead

achieving a competitive advantage by creating

cultures where BI sits at the core. In this new AE

business dynamic, the premium is on decisions

inormed by data and data analysis.

Because o its many merits, BI has been widely

discussed and adopted in other industries

especially in nancial services and retail. Little

attention has been paid, however, to how AE

rms can harness the power o BI in their own

organizations. Given an AE rms singular ocus

on projects, this actor becomes increasinglysignicant: what works or a credit card

company will not have the intended eect or an

architecture or engineering rm.

To ll this void, Delteks experts worked with

leading consultants and Deltek Vision customers

to create this best practices whitepaper. By

providing an inside look at how the best run AE

rms are using business intelligence to improve

company-wide perormance, we are oering

specic, proven lessons that peer rms can learn

rom.

Contents

1 Executive Summary

2 Smarter Decisions,

Better Results

2 Setting Expectations:

Three Considerations

3 BI Best Practices

5 Conclusion

6 Case Study: Bonestroo


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White Paper Decision Making at the Best Run AE Firms

Its clear that

frms thatsystemizetheir BI oract-baseddecision-makingprocesseshave a strong

competitiveadvantageover thosethat dont.

Smarter Decisions, Better Results

Is your rm spending a lot o time and eort

managing problems ater negative eects have

already taken their toll? Are you struggling with

data accuracy? Spending more time nding data

than analyzing it? Or worse, basing business

decisions on sheer guess work? These are the

hallmarks o rms running their businesses on gut

versus act, and the prime candidates that could

benet rom a BI solution.

On the other hand, rms that already have

ormal BI strategies in place are taking a dierent

approach to decision making that is both

deliberate and methodical, resulting in a moreaccurate perspective o their business. Consider

having a historical, current and uture view o rm

perormance with which you can:

Spend more time analyzing data and making

decisions than running reports

Share perormance data across the rm in role-

appropriate ways

Use goals to drive the decision-making process

And perhaps most important: Predict the impact o decisions on rm

perormance

These are the distinct, and sometimes critical,

advantages that BI provides. When looking at

what BI oers, its clear that rms that systemize

their BI or act-based decision making processes

have a strong competitive advantage over those

that dont. The challenge then becomes where to

begin and/or how to best manage the existing BI

programs in place.

Setting Expectations: Three Considerations

AE rms have their own distinct processes

and cultures. In considering how to apply BI within

their organizations, its important to start with

three actors: A rms maturity level, dening and

measuring as specically as possible and creating

a clear bias towards action.

1. Consider Your Firms Maturity Level

Christine Brack, principal, business planning or

ZweigWhite, stresses the importance o assessing

a rms maturity level rst and oremost.

How committed are you to changing? This

actor is key, Brack says, noting A rm usingbusiness inormation to make decisions about

growth and using metrics to improve, has to have

a culture that is prepared or these initiatives and

expect change.

At the same time, strong communication

practices are an absolute must or BI to deliver

value. A rm that is run based on numbers

and metrics (all o which are shared across the

organization) is vastly dierent rom one that

simply collects reports that management doesnt

use (and certainly doesnt share). Accordingly,consider the cultural implications o inormation-

based business strategies, and how they can be

impacted by a lack o structured communication.

2. Be As Specifc As Possible

Once youve decided that BI has a role within your

rm, it is time to create specic initiatives. Ater

identiying what youll measure and improve, its

imperative to be laser ocused on ensuring the

data is easy to access, easy to read and relevantto the appropriate decision makers. Additionally,

it is essential that rms identiy goals or all o the

data that is being measured so that its clear what

success looks like. Without goals, measurement


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Bonestroo

has made

a strategic

choice to move

away rom

basing project,

personnel or

other decisions

on gut instinct.

Instead, the

premium is

placed on

decisions

inormed by

data and dataanalysis.

becomes irrelevant. Brack emphasizes this,

stating, Leaders and managers need to

concentrate on data that is actionable, rather than

inormational. In other words, get the right data

and do something with it.

By being as specic as possible, rms will have

a clear sense o the numbers it wants to change

and what its benchmarks are. With acceptable

ranges developed and decisions made as to

which direction the numbers need to go, AE

companies are putting themselves in a position to

be successul.

3.Take ActionFinally, once a rm has quantiable data it needs

to be able to apply it accurately. This means that

someone has to look at the numbers and be able

to decide i they can be changed in a avorable

manner. I it has been determined that proactive

action can be taken, the rm also has to decide

how much change it wants and be willing to make

the necessary changes to produce results. As

the last step, a eedback loop must be in place so

that the eect o a change can later be evaluated

(measurement is, ater all, BIs undamentalprinciple).

For successul optimization o BI, action is

critical. The business has to be ready to make

operational or strategic changes not an easy

eat, and one that doesnt happen by accident.

Change, thereore, requires many willing

participants across the rm, and must be led rom

the top-level o the organization down.

BI Best Practices

Once AE rms have committed to pursuinga BI strategy, Deltek suggests the ollowing best

practices:

Communicate openly and oten

Vicki Morton, Inormation Systems Manager

at Bonestroo, says that rms with the best BI

programs are those that champion openness and

transparency. Not only in sharing the numbers,

but in talking about how decisions were made

based on that inormation.

Christine Brack adds that communicating the

rms business drivers to all levels o the sta is

equally important. While not everyone needs to

be fuent in nance, a baseline understanding

and common vocabulary acilitates that

communication.

Leverage BI sotware

To be as eective as possible, Morton stresses

the importance o leveraging purpose-built BI

tools (like Vision Perormance Management).Though these are relatively simple to implement,

Morton reiterates their signicance, explaining

that these systems, Were designed specically

to do the heavy liting or you. Firms that attempt

to use multiple spreadsheets that require

manual calculations run the risk o negating the

very purpose o a BI strategy. Firms employing

a spreadsheet strategy, she adds, can end-

up creating silos o inormation within the

organization and/or generating data that isnt

reliable or consistent across the company.

Set realistic goals

With the changing business atmosphere, it

has become much more important to ocus

on the uture rather than looking at past rm

perormance. While this means setting immediate

goals to make improvements, it also rearms

that these goals should be realistic. Likewise, it is

crucial that rms are careul to not try to tackle

too much at once.

For this, Brack recommends to, Choosemetrics you want to ocus on, and start small.

As time goes on, you might be ready or more

advanced metrics. But start by getting managers

and leaders together to decide whats important

or the uture o your rm.

In conjunction with setting your goals,

establish what data you have and whittle it down


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The ability

to comparehistorical

inormation

and predict

uture

revenues gives

Bonestroo

an advantage

over our

competitors

that arent

using this

type o

inormation.

Vicki Morton,

Inormation SystemsManager, Bonestroo

to a more manageable size. Choose benchmarks

that are good indicators o the health o a project/

rm (such as utilization, WIP, backlog, eective

multiplier). And remember, each rm needs

to determine what is right or them, as these

benchmarks are individually dependent on the

rms culture, size, location and strategic plans.

In its case, Bonestroo looks at two primary

metrics: direct hours and revenue orecasting

(backlog and opportunities).

Show the value across the frm

Firms must also have a ocus on proving the

value o its BI program. Driving adoption,understanding and buy-in is a critical part o

managing expectations so dont underestimate

the need or some internal PR. Without actively

demonstrating to the entire rm why a business

intelligence system is being utilized in addition

to the the success its generating - the tools used

can quickly become seen as another piece o

extraneous technology or technologys sake. To

catalyze adoption o BI throughout all levels o

your organization, be sure to openly share credit

where its due: when there are improvementsand achievements that can be attributed to the

eective use o the BI strategy, they need to be

shared with everyone! As a critical best-practice,

this principle remains consistent with Bracks

recommendation o communicating openly and

oten to the organization as a whole.

Ensure sta understands the business

undamentals

You may not have 100% buy-in when you start

certain initiatives based on business intelligence,but the solution really will work or you. Theres no

way anyone can escape the value it brings, says

Brack.

While thats true, it also requires grasping the

business undamentals. I youre in management,

you should be interested in these numbers

anyway, notes Brack. This may be the case or the

rest o the rm. Because the reports generated by

a business intelligence system can seem daunting

at rst, anyone who looks at the data needs to

have at least an understanding o accounting

undamentals. Similarly, throughout the company

there needs to be a common language o terms

and metrics to keep everyone on the same page.

Training is absolutely key!

Morton adds that, ideally, project managers

should update a system continuously, however

that can certainly be a struggle. To overcome

this challenge, its good to start with a monthly

revenue orecast. Once people start to see the

inormation they could get rom putting more intothe system, they realize that updating requently

is a benecial idea. Subsequently, when those

same users understand that their perormance

will be measured rom that inormation, their

engagement with the system will continue to

increase.

Though BIs benets are undeniable, rms

shouldnt expect every person to participate right

away. However, even the hold-outs (those who

remain attached to old processes due to their

amiliarity, rather than their eectiveness) willeventually understand and adopt centralized,

data-centric strategies in time. When someone

isnt engaged or participating while everyone else

is talking about it and doing it, those hold-outs

will start to eel like the odd men/women out. The

evolution o the internal culture will help drive

additional adoption and buy-in. Be that as it may,

i soter prodding does not work, its up to the rm

to decide i this is a non-negotiable component o

someones role.

Sometimes sitting down with those whoare having trouble and nding out what they

are struggling with is all that is necessary. Once

someone is able to see what they can get back in

returnin addition to the act that it is the basis o

which their perormance is being measuredthey

are usually convinced!


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Put the results to use

In todays technology-centric world, rms have

more inormation available than ever beore.

But BI isnt about data or datas sake its about

improving the companys success.

Keep the end in mind, as BI isnt a one-time

initiative. Rather, its an ongoing, iterative process

encompassing three steps. Only when an

organization can:

1. Distill its data into a ormat that is easy

to consume and relevant to its own rm

structure;

2. Use it to achieve clearly dened goals; and3. Implement a eedback loop that puts its data

to use and osters continuous improvement

will it truly have a successul BI strategy.

For example, when rms look at revenue

based on project types, they may realize they are

inecient at one type o project or client type,

which in turn is dragging them down. Using BI as

the oundation o your marketing and business

decisions can help in delivering a stronger go

or no decision. This type o intelligence will inits essence show rms i they are doing things in

the right wayincluding everything rom pursuing

projects, planning projects, hiring and training.

Success requires commitment

Its important to keep in mind that the amount o

eort to get end-users to comply with entering

inormation may not be insignicant. A culture

o project management and proper training,

coupled with both the commitment to improve

and the knowledge that progress doesnt happenovernight, will get a rm through these challenges.

Conclusion

Across every part o the rm, AE organizations

have more inormation than ever. The opportunity

thereore, is to transorm that raw transactional

data into insights and intelligence that in turn

inorms every core decision the rm makes.

Research shows that decision making at

the best run AE rms is both deliberate and

methodical. Bonestroo and other high-perorming

organizations have made a strategic choice

to move away rom basing project, personnel

or other decisions on gut instinct. Instead, the

premium is placed on decisions inormed by data

and data analysis.

Deltek has looked at how AE rms can best

bring the benets o BI to their organizations and

oers these nal three recommendations:

Top-down support and enorcement: Creating

or evolving a culture o act-based decision

making can only happen when its required and

enorced by management. I that isnt present,

old habits will resurace throughout all levels o

the rm.

Set appropriate metrics: Dont try to reinvent

the rm overnight. Instead, identiy and ocus

on those key metrics appropriate to your

company, such as WIP or AR. Over time, with

demonstrated successes and processes in-

place, you can add additional, more complex

metrics.

Focus on project management: Projectprotability uels rm growth nothing else.

So i protability is slipping away at the project

level, your bottom line isnt as strong as it could

or should be. To combat this challenge, create a

true culture o project management by putting

solid managers in place with the tools they

need in an environment that oster continuous

improvement. Not only does this address both

project protability and eciency, but it also

develops your stai.e., the uture leaders o

your rm.

These recommendations coupled with diligenceand discipline will allow AE rms to achieve the

signicant benets and competitive advantage

that BI provides.


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Case Study: Bonestroo

Bonestroo (St. Paul Minn.,) is a 300-person,

multi-disciplined engineering, planning and

environmental science rm.

Vicki Morton, Inormation Systems Manager,

says that due to the economic changes and

challenges acing the industry, Bonestroo

needed the ability to make time-ecient

and eective decisions to react to market

conditions. Additionally, the rm was looking

at too many metrics, too many reports and

had generally too much inormation that then

became overwhelming and disorganized to

its users. Collectively, these actors clutteredmanagements ability to interpret the data

eectively and/or use it in any actionable way.

All o this meant that too much time was spent

dealing with problems and making decisions ater

the act, rather than being able to stop the issues

beore they occurred. In a highly competitive

market, Bonestroo was holding itsel back. To

combat these problems, Bonestroo began using

Deltek Vision as part o a comprehensive BI

strategy.

The rm is particularly ocused on metricsthat include direct hours and revenue orecasting

(backlog and opportunities). Secondary metrics

that hold critical value to Bonestroo range rom

net revenue, prot, eective multiplier, sales, AR,

WIP, write-downs and write-os to discretionary

spending.

Though Bonestroo aced some initial

diculties in getting everyone to comply, Morton

says that overall, The response was quite

positive.

She adds that, most importantly, The ability

to compare historical inormation and predict

uture revenues gives Bonestroo an advantage

over our competitors that arent using this type o

inormation.

BI is also critical, in that executives are better

ocused on where they need to be in order to

drive the business. With this oundation in place,

company leaders can quickly determine the areas

that need attention, enabling them to make moreeective decisions. Additionally, team leaders

have easy access to real-time inormation that

can assist them in managing both their sta and

the rms projects and clients.

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Topic 6 Case Studies on Decision Making