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Enterprise Reporting Fiction and Fact
The past few years have vividly shown why organizations need to take enterprise reporting and financial reporting more seriously. Though many executives complain about compliance regulations, millions of employees and investors have been detrimentally affected by those who did not feel accountable for implementing airtight enterprise systems for financial management and reporting. Had information been accurate, available and reached a wider audience, offenders would have been caught much earlier.
The Sarbanes-Oxley Act requires that CFOs and CEOs certify personally that they have reviewed quarterly and annual reports that "fairly represent" the company's financial position. The act also requires an internal controls report and procedures certified by external auditors. But whether the goal is compliance, improving corporate performance or both, financial reports must provide on demand, current, accurate data to top-level executives, line managers, and staff in a personalized manner.
Availability of information on demand is the main concept of Information Democracy, and can be accomplished through effective enterprise reporting. Success is possible only when 100 percent of decision makers use business-critical information in their daily activities. Enterprise reporting is more than identifying performance indictors or providing a handful of power users with the ability to query data or generate reports. Enterprise reporting is an organization's ability to manage corporate performance by enabling the enterprise to access and deliver relevant information in a timely manner, empowering the employees to make effective and informed decisions.
There are misconceptions or outright fictions regarding enterprise reporting, including the type and quantity of information people should receive, who should get it, and when and how it should be provided. Here are some of those fictions and corollary facts.
Fiction 1. One Size Fits All. Since users have very similar needs for information, and reports can be built for access at many levels.
Fact. A wide variety of business users have different needs when it comes to reporting. To be accountable, each user needs the right set of reporting and analysis tools. Financial analysts require sophisticated ad hoc query and analytical tools; executives need a dashboard of all key performance indicators; departmental staffs need easy-to-use reports from which they can take action.
Fiction 2. Users will gladly give up their spreadsheets if IT provides them with the tools and information they need.
Fact. Not in a million years will users give up spreadsheets! Users feel empowered by spreadsheets, but maintaining data in a hodgepodge of documents makes it impossible to maintain one version of the truth. Since most reports are created manually, automation of control processes such as data integration, report creation and distribution within a centralized server environment will reduce the number of manual reports and versions and enhance fraud detection. Without automation, highly paid analysts are performing clerical tasks of manual entry, cutting and pasting, or querying a data warehouse. Since users are not going to give up spreadsheets, the enterprise reporting environment must be seamlessly integrated with user spreadsheets.
Fiction 3. A data warehouse can be accessed by users without help from IT and it is sufficient to provide self-service tools for end user reporting.
Fact. For effective use of a data warehouse, IT assistance is mandatory. It takes years to build an organization-wide data warehouse and most organizations are not building one huge source of data. Functional units called data marts, built for specific business purposes often double in data size for each of the first five years and users are not keen to learn the complex tools for query and data manipulation that they need. If the tools are not used properly, the same query run by separate users might well give inconsistent results. It is advisable that IT developers build applications for the most important and frequently used queries and reports and make them available to users.
Fiction 4. Less visibility to enterprise reporting information is better since security is of paramount importance. It is better to provide information only to very few top level executives.
Fact. Greater visibility to enterprise reporting delivers a higher level of trust. By extending real-time information through all parts of the business the organization can distribute accountability directly to those employees who are in charge. More visibility to information provides greater transparency into operations and performance. Cost center managers can detect budget overruns and inefficiencies before they occur and align resources behind the most profitable activities. Organizations with consistently available and accurate enterprise reporting infrastructures are better positioned to comply with disclosure regulations, earn market trust, and effectively manage more aspects of their organization. Appropriate levels of security should be the norm but the goal should be to provide the right information to the right people at the right time.
Fiction 5. Information from enterprise reporting should be used internally and we should be very careful about disclosing any of our information to outsiders.
Fact. Restricting access to information in enterprise reporting to internal sources harms more than it helps. Performance indicators should be made available selectively to external users such as partners, suppliers, customers and investors. More and more organizations are sharing the "crown jewels" of enterprise information with these parties to inform and allow them to be proactive rather than reactive to the needs of the organization. Investors gain more visibility into the company thereby reducing risk. The use of extranets is spreading to extend access to enterprise reporting technologies such as scorecards and performance indicators and projection reports. Wal-Mart uses supplier extranets to manage visibility and lead time, preventing stockouts and customer dissatisfaction. Being privy to the appropriate information, customers will have more trust and faith in continuing to do business with the organization.
Shaku Atre is president of Atre Group, Inc., a business intelligence and data warehousing corporation. She is an internationally renowned expert who lectures on business intelligence, data warehousing, data mining, customer relationship management (CRM) and database technology. Atre is also author of six highly regarded books, Data Base: Structured Techniques for Design, Performance and Management, John Wiley & Sons, Business Intelligence Roadmap: The Complete Project Lifecycle for Decision-Support Applications, Addison Wesley; among others on these topics. Formerly, she was a partner at PricewaterhouseCoopers and held a variety of technical and management positions at IBM.She has published hundreds of articles and is a frequent speaker on these topics. Atre can be reached at shaku@atre.com.
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