Analytics Stories: A Case Study from Grant Thornton
How can analytics transform the world of accounting?
As I have shared elsewhere within this series, businesses are increasingly using analytics to improve their internal and external facing business processes and to strengthen their “right to win” within the markets that they operate. To do this, many firms start with their enabling business capabilities. Clearly, “analytics can help transform just about any part of a business or organization. Many organizations start where they make money—in customer relationships” (Analytics at Work, Harvard Business Review Press, page 9).
The world of accounting is no different. However, in Grant Thornton’s case, it has determined that better customer data can actually help it improve its business capabilities system related to both back office and front office processes. For purposes of this discussion, “a capability is the ability to reliably and consistently deliver a distinctive outcome relevant to the business” (The Essential Advantage, Harvard Business Review Press, Page 14).
Relating Client profitability to quality of work performed
In terms of improving its back office processes, Grant Thornton wants to get a better understanding of client profitability as well as the quality of work that is actually being performed for each of its clients. These two measures are of course related over the longer haul. As Theodore Levitt indicated in Marketing Myopia, “the purpose of a business is to create and keep a customer”. And client profitability and life time value of a customer on a longer term basis is related to quality of work performed. To improve both, Grant Thornton is creating and providing access to a number of business critical metrics around staffing, quality of delivery, and profit versus cost of each customer engagement.
Accounting for the total customer relationship
At the same time, Grant Thornton has determined that they need to use their customer data in order to get to know their customers better. At Informatica, we like to call this the total customer relationship. Just like other service based businesses, Grant Thornton wants to improve its ability to cross sell and upsell. For example, if I am doing audit work, can I also do tax or other business services. To make this reality, they need like just about every other business a single view of customer.
Accounting from the numbers not gut feel
To make both of these a reality, Grant Thornton has started by getting its critical information out of its applications and into an operational data store—a database designed to integrate data from multiple sources. They are using a mix of traditional ETL tools and new cloud delivered solutions to pull data out of cloud based systems like Microsoft Dynamics. This is giving them truly a hybrid data collection environment. With all of their data in hand, they then have taken their data and stuck it into a data warehouse for reporting. From here they have an initiative to build analytical dashboards for business leaders and customers alike. Their goal is to move decision making from gut feel to data. According to Tom Davenport, “our research suggests that 40 percent of major decisions are based not on facts but on a managers gut”. (Analytics at Work, Harvard Business Review Press, page 1).
As I have discussed, firms are starting to use analytics to better manage their core business capabilities. For this reason, analytics are more and more foundational to a business’s right to win. Clearly, the ability to use analytics to keep existing customers by measuring and improving service quality and increase the degree of cross sell is core to Grant Thornton’s ability to retain and grow its existing business.
Download: Grant Thornton Case Study
Author Twitter: @MylesSuer