1. Implementing Budgeting Software - Is It Worth the Trouble ? Jarmila Pencikova LawNet 2004

2. Agenda Software Selection Process Software Selection Process What to look for What to look for Know what you want Know what you want Be aware Be aware My Firms Experience My Firms Experience Selection Process Selection Process 3 years of fun 3 years of fun August 26, 2004 Osler, Hoskin & Harcourt LLP

3. What Do You Want ? August 26, 2004 Osler, Hoskin & Harcourt LLP OR

4. Things to Consider Structure of the Software Structure of the Software SQL-based, Web, User Friendly, etc. SQL-based, Web, User Friendly, etc. Structure within the Software Structure within the Software Hierarchy of Units (Office, Department, Company) Hierarchy of Units (Office, Department, Company) Reporting Tools Reporting Tools Security Security Flexibility Flexibility Import/Export of Data to/from Other Systems Import/Export of Data to/from Other Systems August 26, 2004 Osler, Hoskin & Harcourt LLP

5. Different Types of Budgets People People FTE (Headcount) FTE (Headcount) FTE Dependent Expenses FTE Dependent Expenses Salary, Benefits, Professional Fees, E&O Insurance, Conference/Education Expenses, Business Development, etc. FTE Dependent Events FTE Dependent Events Hire & Termination Date, LOA, Pay Increase, Bonus, etc. August 26, 2004 Osler, Hoskin & Harcourt LLP

6. Different Types of Budgets Revenue Revenue Number of Hours Number of Hours Hourly Rates Hourly Rates People (FTE) People (FTE) August 26, 2004 Osler, Hoskin & Harcourt LLP

7. Different Types of Budgets Expenses Expenses Flexibility Flexibility Various Allocation Methods Various Allocation Methods Comments Comments Attachments Attachments Data Protection Data Protection August 26, 2004 Osler, Hoskin & Harcourt LLP

8. Different Types of Budgets Assets Assets Computers, Software, Furniture, etc. Computers, Software, Furniture, etc. Various Categories for Assets Various Categories for Assets Calculation of Depreciation Calculation of Depreciation Flexibility Flexibility August 26, 2004 Osler, Hoskin & Harcourt LLP

9. Different Types of Budgets Other Items Other Items Accounts Receivable Balances Accounts Receivable Balances WIP Balances WIP Balances Prepaid Expenses Prepaid Expenses Liabilities Liabilities Bank Loans Bank Loans August 26, 2004 Osler, Hoskin & Harcourt LLP

10. Be Aware Who is helping you with the implementation? Staff from the Software Company Staff from the Software Company Third Party Consultants Third Party Consultants Own Staff Own Staff Do you have enough resources? August 26, 2004 Osler, Hoskin & Harcourt LLP

11. Possible Conflicts Finance IT People People People People August 26, 2004 Osler, Hoskin & Harcourt LLP

12. Osler, Hoskin & Harcourt LLP 500+ Timekeepers plus 750+ Others 500+ Timekeepers plus 750+ Others 5 Offices 5 Offices 2 Companies 2 Companies CMS (Accounting) CMS (Accounting) Cyborg (HR) Cyborg (HR) August 26, 2004 Osler, Hoskin & Harcourt LLP

13. Our Old Process Spreadsheets, Spreadsheets, Spreadsheets Spreadsheets, Spreadsheets, Spreadsheets 20 Legal Departments = 120 Documents 20 Legal Departments = 120 Documents 32 Support Departments = 128 Documents 32 Support Departments = 128 Documents 60-70 Projects = 120-140 Documents 60-70 Projects = 120-140 Documents 15-20 Other Excel Documents 15-20 Other Excel Documents Total of 400+ Documents Total of 400+ Documents Multiple Versions of Many August 26, 2004 Osler, Hoskin & Harcourt LLP

14. Various Types of Documents Excel Documents Excel Documents Actual Budget Numbers Actual Budget Numbers Word Documents Word Documents Business Plans, Explanations Business Plans, Explanations FileMaker Pro Documents FileMaker Pro Documents FTE, Salaries FTE, Salaries August 26, 2004 Osler, Hoskin & Harcourt LLP

15. Budget Timing September to mid-December (15 weeks) September to mid-December (15 weeks) 3-4 weeks for preparation 3-4 weeks for preparation 2-3 weeks for input 2-3 weeks for input 3 weeks for budget meetings 3 weeks for budget meetings 3-4 weeks to finish 3-4 weeks to finish 2 weeks for final approval meetings 2 weeks for final approval meetings August 26, 2004 Osler, Hoskin & Harcourt LLP

16. Our Old Process Not completely broken but should be fixed Needs more flexibility and control Needed to make decision about the future August 26, 2004 Osler, Hoskin & Harcourt LLP

17. What Did We Want ? Budget Cycle that focuses Users on the Business Issues rather than Getting the Numbers Out Tool for Budgeting, Analysis, Reporting & Modeling Flexibility – What if Scenarios Online Reporting Tool Contribution Analysis Integration August 26, 2004 Osler, Hoskin & Harcourt LLP

18. Our Process Establish Key Requirements Match Firm Structure Match Firm Structure Integration with HR & Accounting System Integration with HR & Accounting System Comprehensive Security Comprehensive Security Ability to Calculate Cost Allocations Ability to Calculate Cost Allocations Must Have Flexible Financial Modeling Tools Must Have Flexible Financial Modeling Tools Can Import/Export Data Can Import/Export Data Workflow & Version Control Workflow & Version Control August 26, 2004 Osler, Hoskin & Harcourt LLP

19. Our Process Establish Vendor Selection & Implementation Team Chief Financial Officer Chief Financial Officer Manager, Financial Systems (Project Manager) Manager, Financial Systems (Project Manager) Manager, Accounting Manager, Accounting Manager, Application Support Manager, Application Support Manager, Project Office Manager, Project Office Senior Financial Analyst Senior Financial Analyst August 26, 2004 Osler, Hoskin & Harcourt LLP

20. Our Dilemma and Choice Software tailored to the legal world Software tailored to the legal world OR Software that can be used in any industry Software that can be used in any industry August 26, 2004 Osler, Hoskin & Harcourt LLP

21. Our Decision August 26, 2004 Osler, Hoskin & Harcourt LLP

22. Why ? Most Advanced Web Functionality Most Flexibility for Future Changes Not Restricted By Vendor Designed Law Firm Models High Satisfaction of Reference Sites Fit Firms IT Strategy and Profile for Hardware and Software Help of Third Party Consultants August 26, 2004 Osler, Hoskin & Harcourt LLP

23. 1 st Budget Year Fantasy Meets Reality Web version very different from WAN version Web version very different from WAN version Consultants did not understand our issues Consultants did not understand our issues Consultants team did not have much experience Consultants team did not have much experience No experience with HR system No experience with HR system Access issues Access issues System not stable – loss of data System not stable – loss of data Consolidation issues Consolidation issues No time for regular project/progress meetings No time for regular project/progress meetings August 26, 2004 Osler, Hoskin & Harcourt LLP

24. Result Beginning of November ABORT Cancel Budget Meetings Converted to the old process Got the job done Fired the Consultants Stepped back and made changes for the 2 nd Budget Year August 26, 2004 Osler, Hoskin & Harcourt LLP

25. 2 nd Budget Year New Release of the Web Version New Release of the Web Version More Time Spent on Development More Time Spent on Development In the middle of the development process In the middle of the development process Project Manager Leaves Project Manager Leaves DBA Leaves DBA Leaves Senior Financial Analyst Leaves Senior Financial Analyst Leaves Hired More People Hired More People Weekly Progress Meetings Weekly Progress Meetings August 26, 2004 Osler, Hoskin & Harcourt LLP

26. Result Some success Some success Our own staff experts in development Our own staff experts in development Still needs improvements Still needs improvements FTE Dependent Events FTE Dependent Events FTE Dependent Expenses FTE Dependent Expenses August 26, 2004 Osler, Hoskin & Harcourt LLP

27. 3 rd Budget Year Changes Done Changes Done FTE Dependent Events FTE Dependent Events FTE Dependent Expenses FTE Dependent Expenses Reports Reports Simplified Input Screens Simplified Input Screens August 26, 2004 Osler, Hoskin & Harcourt LLP

28. Result Major Success Global Events Global Events Various Scenarios Various Scenarios High Satisfaction of All Users High Satisfaction of All Users Lawyers Entered Budget Data !!! Lawyers Entered Budget Data !!! No Consolidation Issues No Consolidation Issues Reduced Budget Cycle from 15 to 11 weeks Reduced Budget Cycle from 15 to 11 weeks August 26, 2004 Osler, Hoskin & Harcourt LLP

29. Today FTE Dependent Events & Expenses FTE Dependent Events & Expenses % Pay Increases applied globally % Pay Increases applied globally % Bonuses applied globally % Bonuses applied globally What if scenarios What if scenarios $ for each Person applied globally $ for each Person applied globally Conference/CLE Conference/CLE E&O Insurance E&O Insurance Business Development Business Development Professional Fees/Memberships Professional Fees/Memberships August 26, 2004 Osler, Hoskin & Harcourt LLP

30. Today Revenue Targeted Hours per Person Targeted Hours per Person Hourly Rates Hourly Rates FTE/Headcount FTE/Headcount Automatic Revenue Calculation Automatic Revenue Calculation What if Scenarios What if Scenarios August 26, 2004 Osler, Hoskin & Harcourt LLP

31. Today Expenses Details attached to numbers Details attached to numbers Data / Cell Protection Data / Cell Protection Accounts are colour-coded Accounts are colour-coded Asset Purchases Each Project treated as Department Each Project treated as Department Various Expense and Asset Categories Various Expense and Asset Categories August 26, 2004 Osler, Hoskin & Harcourt LLP

32. Whats Missing Depreciation Calculations Depreciation Calculations Quarterly Forecasts Quarterly Forecasts Use the Software as Reporting Tool Use the Software as Reporting Tool Workflow Workflow August 26, 2004 Osler, Hoskin & Harcourt LLP

33. So – Was It Worth It ? After 1 st Year August 26, 2004 Osler, Hoskin & Harcourt LLP After 2 nd Year After 2 nd Year MAYBE MAYBE After 3 rd Year After 3 rd Year

34. Contact Information Jarmila Pencikova Manager, Accounting jpencikova@osler.com 416.862.5891 Osler, Hoskin & Harcourt LLP P.O. Box 50, First Canadian Place Toronto, Ontario, M5X 1B8 Canada

35. Questions ?